Can your startup survive the economic downturn? • TechCrunch

Can your startup survive the economic downturn? • TechCrunch

Can your startup survive the economic downturn? • TechCrunch

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All startups have to navigate the turbulent economic climate of 2023. But the survival of your business depends on many factors, including the viability and originality of your idea and the amount of cash you have in the bank.


There are ways to just survive, of course, to hunker down and get through the bad economic cycle. Businesses with a long track can ride out market fluctuations, but you need to have an idea that solves a real business problem to really grow and thrive.

At the start of the pandemic in 2020, many VCs extolled the virtues of “just putting your head down and building a product.” If you’re at this stage, that’s not a bad way to look at this moment. Try to ride out the development storm, and by the time you have a product ready to hit the market, things will have improved.

But if you’re trying to sell or maintain your position within a customer base, that’s another story. Although several CIOs have said they’ll likely keep company spending the same — or increase it — in 2023, that doesn’t automatically mean good news for startups. You still need to convince key decision makers that your product is worth keeping in the mix at a time when every element of the technology budget is under intense scrutiny.

Two trends in the business start-up space have emerged from this environment: There are a slew of niche startups – with venture capital funding in hand – targeting specific problems facing businesses. And there are existing companies that are growing to be more like platforms than single-problem solutions.

So does that mean 2023 will be a great year for startups that have expanding product suites and locked-in long-term contracts? Will one-round startups struggle — or even fail? As expected, it depends, in this case, on the part of the business stack in which a business operates.

But there are perhaps more important questions: how crucial or unique is your product? What sets it apart? And will you survive the cut? We spoke to several startup investors about the types of startups that are in good shape despite the downturn and which could take a beating in 2023.

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