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Illustration: Aïda Amer/Axios

When the pandemic forced cities to shut down, millions of businesses moved their operations online — a shift that is having lasting impacts on hiring, real estate and the way we buy goods and services.

Why it matters: Small businesses are the engines of the economy. While many did not survive the last 15 months, new businesses have popped up and found ways to find customers in the new, all-online-all-the-time environment.

Data: Axios research; Chart: Axios Visuals

By the numbers: Tech giants say they saw massive growth in online adoption by small businesses during the pandemic.

  • Stripe CEO Patrick Collison tweeted Thursday that "more businesses launched on Stripe since the start of 2020 than did in the rest of Stripe's history before then." For reference, Stripe launched in 2009.
  • Facebook CEO Mark Zuckerberg said in April that the company now has more than 200 million businesses that use its free services — more than double since 2019 — and that more than 1 million businesses have set up shops on its platform.
  • Etsy: The number of active sellers on Etsy soared from 2.7 million in 2019 to 4.4 million in 2020, the company said in May.
  • GoDaddy: The world's largest internet domain registrar, GoDaddy said last year it added 1.4 million net customers — nearly double the amount it added in 2019.
  • Other firms, including Snapchat, say ad revenues have increased dramatically thanks to more small businesses buying self-serve ads.

Be smart: While most people think of the pandemic's digital revolution in terms of e-commerce, the services sector has perhaps experienced the most fundamental changes during COVID.

  • New products and tools from tech platforms have made it much easier for people to obtain services online, like doctor's visits or fitness classes.
  • "We can see in our dataset that services businesses are doing the best right now (digitally) and stores are starting to open," GoDaddy CEO Aman Bhutani told Fox Business last month.

The big picture: The digital small business boom has been a great opportunity for tech giants to prove their value to society while facing record regulatory scrutiny.

  • Google, Facebook and others have spent millions on advertising touting ways they've helped small businesses survive during the pandemic — and helping the overall economy to recover.

Between the lines: The digitization of small businesses wasn't all positive. As companies moved their presence online, many closed up their brick-and-mortar shops, leaving empty storefronts in shopping centers and main streets.

  • The workforce needed for all-digital companies is different than what's needed for an office or in-person retail store.
  • A recent Facebook survey of more than 30,000 small businesses showed that nearly a third of small- and medium-sized businesses have had to lay off workers as a result of COVID-19. Half say they don't plan to rehire employees in the next six months.

The bottom line: "Overall rate of migration to the internet economy is hard to overstate," Collison noted.

Go deeper

Updated Sep 14, 2021 - Axios Events

Watch: A conversation on post-pandemic recovery for Black-businesses

On Tuesday, September 14, Axios markets reporter Courtenay Brown and business reporter Hope King discussed the economic recovery of Black-owned small businesses, featuring Congressional Black Caucus Chair Rep. Joyce Beatty (D-Ohio) and U.S. Black Chambers President & CEO Ron Busby. 

Rep. Joyce Beatty addressed how the Congressional Black Caucus and Congress are working together to help Black-owned businesses in a post-pandemic era, the primary challenges that the Black-owned business community endured during the pandemic, and how unemployment rates among Black communities vary across the nation. 

  • On government efforts to provide financial relief to small businesses: “When we think about the value of the Congressional Black Caucus and how we had to work with them, many of us small business owners, I know firsthand as a former small business owner how hard it is to make payroll in a normal time. Here’s the good news: 95% of the Biden-approved PPP loans went to small businesses with 20 or less employees, and that was very helpful.” 
  • On consistently disparate unemployment rates in Black communities: “When we hear, 'Oh, unemployment has gone down and people are working,' well, those numbers were never the same for minority-owned businesses, especially Black-owned businesses. The numbers were always double, and we’re still dealing with that.” 

Ron Busby illustrated the progress of Black small businesses in post-pandemic recovery, how efforts from Federal entities and the private sector have assisted in that recovery, and what types of aid he believes are most essential in helping Black-owned small businesses thrive. 

  • On the current state of recovery for Black-owned businesses: “Businesses that are owned by African-Americans and Black people across the country are starting to feel extremely optimistic about the future, but the challenges still exist. The number one challenge for Black-owned businesses is obviously access to capital.” 
  • On adjusting government-run initiatives to better serve Black communities: “We had to go back and make sure that we adjusted those packages, those stimulus opportunities, to make sure that our Black businesses could participate. As you see new programs being rolled out, you’ll see that the US Black Chamber is there to make sure that small, diverse, and primarily Black firms are included in the conversation, as well as being included in the stimulus packages.”  

Axios SVP of Events & Creative Strategy Kristin Burkhalter hosted a View from the Top Segment with Facebook’s Vice President of Business Engineering and Partner Solutions, Alvin Bowles, who discussed how Facebook is supporting Black-owned businesses through various digital exposure initiatives. 

  • “It’s just important to note that individuals are trying to leverage the digital economy to be able to actually decrease that distance between innovation and execution, and trying to figure out the best way to be able to leverage opportunities to have individuals discover their businesses. We feel like there’s an enormous responsibility that we have. As we head into this holiday season, it’s now more important than ever to really focus on the discovery economy and that every good idea deserves to be found.”  

Thank you Facebook for sponsoring this event. 

Businesses grapple with vax mandates and COVID policies

Illustration: Sarah Grillo/Axios

A growing number of U.S. companies have mandated COVID-19 vaccinations for employees. But in the absence of a federal mandate there's a wide variance in what’s happening — mandates for all, some, or none — with employee demands being put front and center thanks to the Great Resignation.

Why it matters: How companies answer questions about vaccines and return-to-work policies has wide ranging impacts — on the health of their employees, on where people live, and on the strategic direction of their businesses.

Tech founders have left the building

Illustration: Aïda Amer/Axios

Most of today's tech giants are no longer run by their founders, but by a new breed of successor CEOs tasked with holding true to a corporate mission while continuing to pump up growth.

The big picture: Silicon Valley has long embraced a "founders know best" philosophy. But eventually, most successful founders get old and tired and rich — and lose interest in the meetings, the management messes, and the sheer hard work of running a company.