At the start of March, MakuSafe of West Des Moines was prepared to see four years of work launch its wearable employee safety devices into a global market. Around 8,000 of the two-piece armbands were earmarked for initial U.S. manufacturing clients, who would use the armbands to collect environmental data surrounding industrial employees — using indicators such as location and speed to identify workplace risk factors on a busy warehouse or factory floor. 

Then the week that MakuSafe received its first large-scale shipment of armbands, the entire nation shut down to cripple the COVID-19 pandemic, CEO Gabriel Glynn said. Travel to promote the company and raise funds shut down indefinitely; manufacturing clients banned vendors from their premises to protect their own employees. 

“We’ve been moving so fast for four years, and building things so fast … it was our first pause to go, ‘Let’s do some self-evaluation of the technology,’” Glynn said.  

The MakuSafe team realized their customers were seeking new protocols to help reopen workplaces to industrial employees without risking the spread of a COVID-19 infection. They turned to the location data that MakuSafe armbands collect in routine operation, which they realized could tell safety managers exactly how close employees were working together in real time on the manufacturing floor. 

Iowa startups like MakuSafe have had to quickly evaluate their own products in real time to survive an extraordinary business environment and recession during the pandemic, while creatively rising to the challenge. It’s hard to have a full picture of how startups are currently faring, but in past recessions, the total annual drops in global venture capital investments were between 21.6% (2001-2002) and 26.3% (2008-2009), an April 1, 2020, report by Startup Genome noted. Following both recessions, technology IPOs in the U.S. dropped by 90%. In a survey released on April 21 by Startup Genome, 74% of U.S. startups reported revenue declines. 

“Part of it has less to do with pivoting their business models and more to do with resilience,” said Kerty Levy, managing director of the Techstars Iowa startup accelerator, which launched in October. 

“The great founders are figuring out, ‘Who is my customer and with the resources I have, what value can I add to that customer today?’ They’re thinking out of the box and they’re thinking about providing something to that customer that really leverages what they have,” she added.   

TURN ON A DIME
When a major league sports facility contacted Rantizo, an Iowa City-based agtech startup providing drone spraying for fields, CEO and co-founder Michael Ott hadn’t yet considered how his company could provide COVID-19-related services. But spraying down a large venue with sanitizing agents, instead of agricultural agents, seemed to match perfectly. 

“I hadn’t really thought through it, but knowing what the drone can do … I think that would work very well,” Ott recalled saying. “Looking into it, that’s a pretty nice business opportunity that takes what we’ve done in agriculture and applies it to a different sector.” 

For the last few years, Rantizo has made a business connecting agricultural producers with contracted drone operators for herbicide delivery to fields. Rantizo sells the drones and provides training and chemicals to contracted operators nationally; when customers call, Rantizo sends the nearest operator out and handles the billing process. 

During spraying, the drone flies at a constant height several feet above the target region, adjusting for incline to provide an even spread. Rantizo introduced new sanitizing chemical options for potential clients, including a traditional chemical and organic chemical option that Ott says targets coronavirus and other viruses and bacteria. 

“Everything was pretty similar. The regulatory environment, which we had mostly solved for agriculture, was pretty similar for this, and the billing. We can charge per square foot or per thousand seats,” Ott said. “It took some thinking and customer discovery and a little bit of math and figuring, but we had the bare bones of it pretty much from what we had already created for agriculture.” 

Some startups will have the wind at their backs, and some will dig deep to find their fit as consumer needs evolve. Now is not the time for emerging startups to try to negotiate higher prices with potential clients, but to frame new services as a pilot partnership, Levy said. 

As Levy recruits potential cohort members for Techstars Iowa’s fall program, she has seen interest grow nationally in edtech startups that were able to leverage an immediate demand in school-from-home by offering new pilot packages to school districts or higher education institutions. Startups in the digital health space, especially mental health service providers, have seen an increase in interest from both individual customers and employers or schools concerned about their people, she said. 

“The world is going to need that much more support in that area,” Levy said. 

Many event software startups that catered to live events have pivoted toward virtual conferences, offering virtual breakout rooms with icebreakers to attendees looking to meet others, or hosting a “main stage” for keynote speakers. Startups in travel and hospitality fields can expect a slower rebound, as some personal travel is beginning but business travelers remain cautious, she added. 

Techstars Iowa still hasn’t launched its first cohort yet, but the accelerator had time to adjust its own operations as Levy recruited startups to apply. Recruiting events and the Techstars Summit went virtual in mid-March. The inaugural class begins on Sept. 8, and Techstars is expecting to be flexible on when startups can visit Des Moines, depending on public health guidance and the founders’ ability to travel.

“If we can get people together even just for the very beginning in September so we can have some class bonding in person, I would love to do that,” Levy said. 

MakuSafe quickly realized its signature armband that industrial employees wear didn’t need to be modified to become valuable to industrial clients who were reopening operations. When employees using MakuSafe armbands arrive at work, each employee is assigned an armband that connects to a unique identifier in MakuSafe’s employer portal, MakuSmart. No personal identifying information is stored on the MakuSafe server, but that identifier tracks the employee’s location data on the worksite each day, creating a map of where the employee goes on-site and who else they come into contact with, said Chief Technology Officer Mark Frederick. 

Now, safety managers using MakuSmart who learn an individual employee may have been exposed to a contagious disease can use the portal to identify who the worker has spent time with in a determined time frame — whether that’s two days or the last week, Frederick said.

The company will soon be releasing a feature offering employers worker density maps — resembling heat maps — allowing managers to see where on the worksite they have the highest concentration of individuals and may need more social distancing protocols. 

“We had the data. We were sitting on it. We just hadn’t applied it in that way before, and so we’re very fortunate because that’s usually the more difficult problem to overcome,” Frederick said. 

KEYS TO STARTUP SUCCESS REMAIN THE SAME
Founders who are most successful in uncertain environments will be the people who have checks in place to start problem-solving — whether that is a co-founder, an internal set of guidelines, a business coach or something else that pushes them into action, Levy said. 

“Resilient founders are those founders who are problem-solvers. They also can check themselves when they’re spiraling,” Levy said. “Everyone spirals; when something comes at you, it’s tough … [but] it’s those founders who, if the slightest challenge comes up and it just gets really hard, they wring their hands and they’re looking for someone else to help them. They’re going to have a hard time.”  

Rantizo quickly found a way to shift the training of their drone operators online. The company oversees a network of 20 contracted operators nationally and is adding to that network in the next few months.

“We’ve designed our system to solve for labor, and when labor is not available … we actually saw a lot of enthusiasm and uptick in interest, and some sales picked up,” Ott said. “There were lots of challenges that the pandemic caused, such as supply chain issues, permitting issues.”

Yet it only took them about three weeks to settle new legal contracts, decide on chemicals for sanitizing and complete test flights in stadiums. 

“People that want to get back to work and want a sanitized location for them to be able to return to. That could be a stadium, it could be a state fair or any other fairgrounds for that matter,” Ott said. “We’re looking into warehouses, and we’ve got a lot of enthusiasm there. We’re making sure we can fly around and spray there as needed. … A lot of arenas have multiple basketball games or hockey 

games, and then they also have shows and concerts and other things. So we have the ability to fly in between those, so we can sanitize for different events.” 

Ott isn’t sure how long drone sanitizing services will be requested. For now, Rantizo is planning on an 18-month time span, with the flexibility to continue as long as needed. 

“It’s certainly a nice business for our company to be in, and I’m happy to provide the service. I’d like it if I didn’t have to do it,” Ott said. “We’re scaling up. We’re seeing tremendous enthusiasm. We have people from different cities that want to buy drones and come get trained.” 

In mid-May, MakuSafe finally began revisiting its 2020 product launch schedule. New potential clients have reached out about MakuSafe’s availability to help their business open safely, Glynn said. 

“It’s accelerated some conversations, to the point where we’re having to talk with organizations about our capacity, and ability to scale our organization to a level that maybe we were thinking was going to be a couple of years down the road,” Glynn said. 

“What’s been nice about the world that we’re in is [I don’t think] worker safety has ever been a more hot topic, even in the four years that we’ve been doing this,” he added. “People are so focused now on their workforce and making sure that their workforce is safe, and happy, and feels comfortable coming back to work.” 

For startups uncertain about the times, the fundamentals of good business stay the same regardless of a pandemic, Levy said. 

“You have to have a good product-market fit. That’s where these early startups are really coming in and trying to establish,” Levy said. “Even if they’ve established early traction in one area, that doesn’t mean that they’ve fully found product-market fit to really blow up and become huge in that area. 

“If a startup is enabling customers right now to be that much more productive, engaged, entertained at home, then they’re going to do really well. It really depends on the industry,” she said. “If these startups are providing value, they’re going to get funding.”