Can your startup survive the economic downturn? — Business d’Or

 

Every startup will have to navigate the turbulent economic environment of 2023. However, whether or not a company can survive depends on many factors, including the viability and originality of the idea and the amount of money in the bank.

Of course, there are ways to survive a bad economic cycle. Companies with a long runway can survive market fluctuations, but to really grow and prosper, they need ideas that can solve real business problems.

Early in the 2020 pandemic, many venture capitalists extolled the virtue of “keep your head down and build a product.”

“At this stage, it is not bad to look at the present moment. Try to weather the storm during development, and by the time your product is ready to hit the market, things will be better.

But if you want to sell or retain your position in the customer base, it’s a different story. While several CIOs say companies’ costs are likely to remain flat or increase in 2023, that doesn’t automatically mean good news for startups.

While all technology budget items are scrutinized, key decision makers need to be convinced that the product is worth participating in.

In this environment, two trends have emerged in the enterprise startup space. There are many niche startups with venture capital funding on hand and targeting specific problems facing businesses. And there are established companies that are expanding to be more of a platform than a solution to a single problem.

Does this mean that 2023 will be a good year for enterprise startups expanding product lines and long-term contracts? Will startups started with one hand struggle or even fail?

As expected, this case depends on which part of the enterprise stack the company operates on.

But perhaps there are more important questions. How important or unique is your product? What makes your product stand out? And will you survive the cut? We spoke with several early-stage investors about which startups are doing well despite the economic downturn and which ones might struggle in 2023.

Originally published at https://businessdor.com on February 11, 2023.