3 ways startups can improve survival odds in a tough economic landscape

The entrepreneurial journey is rockier than ever in today’s economic landscape. Limited access to funding has forced many founders to scale back hiring plans and curb spending in areas like marketing and expansion. According to the Wall Street Journal, venture capital activity was down nearly 40% in Q1 2023 from a high of $94.8 billion in Q4 2021.

In today’s climate, the old startup playbook of scaling as fast as possible based on market potential isn’t sustainable for long-term success. It’s about making data-driven decisions to support stable growth. Leaders need a new blueprint focused on efficiency, collaboration, and incremental progress.

The “move fast and break things” approach is too risky for today’s economic climate in which investors are increasingly selective with their investments. According to the PitchBook-NVCA Venture Monitor, deal counts and values have decreased substantially since the second quarter of last year. Companies can no longer afford sizable teams focused on isolated projects that don’t directly contribute to strategic goals. The name of the game now is agility, cross-functional collaboration, and driving consistent business outcomes. Startups must find ways to do more with less.

The most successful startups today focus on incremental enhancements that create real value, not just rapid, unsustainable growth. Their competitive advantage stems from a unified digital ecosystem where business and technical teams work seamlessly. And they rely on data and analytics to inform smart decisions at every turn.

This incremental methodology provides today’s resource-constrained startups with a blueprint for scaling efficiently amid greater scrutiny of value creation. Companies that embrace it will gain resiliency, accelerate innovation, and maximize their prospects for the future — those clinging to the past risk being left behind.

Let’s dig deeper into how these startups can be more agile from their conception.

Adopt an outcome-driven mindset

To thrive in today’s landscape, startups must take an agile, outcome-driven approach to product development and growth. This means delivering tangible business value in small, rapid increments rather than getting bogged down in complex, long-term projects.

The most successful startups today focus on incremental enhancements that create real value, not just rapid, unsustainable growth.

Startups may aspire to larger initiatives that drive value, but today’s digital business is about working in smaller chunks, with dynamic prioritization based on changing business needs regardless of company size.

For instance, one specialty chocolate manufacturer (though not a startup) saw great success by applying this approach to improve its supply chain operations. The company increased agility and accelerated results by breaking the initiative into sprints aimed at specific problems like enhancing inventory visibility or improving the availability of fast-moving SKUs.

The chocolatier reduced obsolete inventory by 80%, eliminated the use of Excel spreadsheets, and trajectory of revenue uplift tracked toward 5%. By taking an incremental, agile approach, startups can maximize their agility and responsiveness. Adopting this mindset allows them to get the most value as they scale in a capital-constrained world.


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