All startups have to navigate the volatile economic environment of 2023. But whether your company can survive depends on many factors, including the feasibility and originality of the idea as well as the amount of cash you have in the bank.
Of course, there are ways to survive simply by cowering in and getting through a bad business cycle. Companies with long runways can weather market fluctuations, but you have to have a real business problem-solving idea to truly grow and prosper.
At the start of the 2020 pandemic, many VCs praised the virtue of “just bowing and building a product”. If you’re at that stage, it’s not a bad way to look at this point. Try to weather the storm during development, and when you have a product ready to hit the market, things will improve.
But if you’re trying to sell or maintain your position in the customer base, that’s a different story. Although there are many CIOs speak that they will likely keep corporate spending the same — or increase — in 2023, which doesn’t automatically mean good news for startups. You still need to convince key decision-makers that your product is worth keeping at a time when every line item in the tech budget is scrutinized.
Two trends in the corporate startup space have emerged from this environment: There are plenty of niche startups — with venture capital in hand — that target specific problems companies face Right. And there are companies now expanding to look more like platforms than single solutions.
So does that mean that 2023 will be a great year for enterprise startups with expansive product suites and locked-in long-term contracts? Will one-trick startups struggle — or even fail? As expected, in this case it depends on which part of the business a company operates in.
But perhaps there are more important questions: How important or unique is your product — what makes it stand out? And will you survive the cut? We talked to some early-stage investors about what types of startups are doing well despite the downturn, and what types of companies may struggle in 2023.
Carefully consider spending
