(Webinar Recap) Navigating your Startup to Success during a Market Downturn

Think of this period as a return to the correct way of doing things

According to Thomas, we need to look at this period from a strategic perspective if we are to balance the negative aspects with the consequent opportunities it presents. Over the past several years, founders have experienced a fairly easy capital environment, making valuations go beyond where they needed to be. In their attempt to meet these valuations, the growth of these organizations resultedly exceeded the solidity of business fundamentals. 

Thomas emphasized that founders need to view this downturn as a way to build muscle by finding and validating strategies that build successful businesses for the long term. This can look like a renewed focus on your customer’s experience or creating products that are in highest demand. Businesses should leverage this opportunity to adjust their strategic direction by doing something practical and actionable. 

Get creative with cost-savings 

In order to extend your fundraising runway, start by modelling out where your primary costs are. While the customary approach may be to hit hiring, marketing, or sales first, Amit encourages startups to think outside of the box to cut costs. For example, founders can also consider taking advantage of tax incentives or government grants wherever they may be applicable. Furthermore, Amit reiterated the power of building a strong network of advocates or partners – including other startups – to help ride through these turbulent times. 

Startups may also face the conflict of wanting both control and responsibility over expenditures, but also retaining the speed and agility they had at a cultural and process level. Instead of defaulting to traditional, permissions-based finance tactics, founders can still empower their employees by equipping them with the right tech tools. By issuing budgets and corporate cards through easy-to-use software like Aspire, employees are empowered to have a sense of control over their own piece of the puzzle. 

Link your hiring strategy to the broader company strategy

Businesses frequently treat hiring as a process that runs separate to other more commercially driven processes. According to Thomas, this is simply overlooking the highly strategic nature of hiring. A key factor for founders to consider is how they can tie their hiring strategy to the overall company strategy – especially in this economic climate. Both Thomas and Amit weighed in how important it is to be aligned internally on what capabilities already exist within your team and what is needed. 

And this starts from the top – founders need to be nimble and agile in setting the tone of the corporate culture. Founders should communicate clearly and confidently with all existing stakeholders on where the company is going and what should be achieved. Not doing so causes uncertainty and kills morale – resulting in a ripple effect which could be felt by the organisation for years to come. 

To learn more about how your startup can thrive during this market downturn, check out the recording below.

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More Resources:

Everything Business Owners Need To Know About Startup Costs

How to Budget for Fast-Growing Startups

Business Expense Management: Everything You Need to Know