For many startups, 2023 was a difficult year. With the high-interest environment continuing into the new year, funding opportunities may continue to be challenging for many and while there is hope for a change in the rate regime in the coming months, belt-tightening remains top of mind for most founders.
But that might not be that bad after all. The current climate is weaning startups off pursuits such as vanity metrics and the obsession to quickly become a unicorn, one VC recently remarked. That typically leads to a lack of focus on the longer-term perspective and may lead to compromised standards.
Founders must get the basics right at the beginning and build the foundations for sustainable growth. Now might be a good time to sort that out.
Here are some thoughts on how to get the process started:
- Focus on the Value Proposition: Clearly articulate your value proposition. Make sure that the product or service addresses a genuine need or pain point in the market. This will help you stand out in a crowded space. Define what makes your startup unique.
- Build a Strong Team: Assemble a team with diverse skills and experiences. A capable team can handle the current pressures more effectively and adapt to changing circumstances. Since there have been many redundancies at top firms, many well-versed experts have suddenly become available in the job market.
- Execution is Key: The ability to execute a business plan efficiently is crucial. Showcasing tangible results and milestones will attract and retain the interest of investors and customers. But make sure that you are also agile and adaptable. The business landscape can change rapidly, and successful startups are often those that can pivot when necessary and capitalize on emerging opportunities.
- Strategic Partnerships: When times are tough, reach out for help. Strategic partnerships with established companies or other startups can provide access to new markets, resources, and expertise. You don’t have to go it alone!
- Financial Discipline: Most importantly: Maintain financial discipline and manage resources wisely. A sound financial strategy is crucial for survival, especially when there’s intense competition for funding. It makes you more credible among investors.
Many successful firms have been established during economic downturns. Facebook (now Meta) was created shortly after the dot-com bust. Uber and Airbnb were founded during the 2008 recession. Economic downturns present a unique opportunity for founders to take a closer and more critical look at the foundational building blocks of their businesses which can help to enhance their overall standing and position them for long-term success.
About the author:
Thanit Apipatana is a Bangkok-based entrepreneur, investor, and advisor with a keen interest in venture building, real estate, F&B, education, sports, and philanthropy. Thanit Apipatana has advised companies in the region including Singapore-based proptech company Mogul.sg and Thai-based Life Below, a project that is looking to catapult the Thai beer market to a new level with liquid yeast.
