'Just break even' may be the worst possible advice for startups in turbulent times - TechCrunch

‘Just break even’ may be the worst possible advice for startups in turbulent times – TechCrunch

economic turmoil of the last two years has forced startups to seek new survival strategies. Today’s startups generally fall into two camps: a minority that can afford to continue doing business as usual because they have a strong market position and a powerful financial base, and a majority that are forced to adapt to changing conditions. constant change.

Among the latter, there are two types:

  1. Those who are having a bad time.
  2. Those that could rise but could plummet just as easily.

The venture market is not about achieving consistent growth, and when a startup favors profit over ambition, the point of its existence is debatable.

In these turbulent times, only a miracle could help the first guy succeed. The second type, however, has every chance of not only surviving but thriving. This makes it critical for them to make the right strategic decisions now.

At this crucial juncture, the opinions of venture capital market leaders, mentors and experts carry greater weight, and many of them have publicly and unequivocally advised founders to lengthen the track of their project and push it into the black. A significant number of businesses have enthusiastically embraced this idea, but the sad truth is that this is probably the worst advice possible for most startups right now.

One of the most interesting companies in our portfolio almost fell victim to this advice. A mentor advised the founder to make his catwalk as long as possible. We looked at how they would have achieved this and found that the proposed cost-saving measures would have virtually destroyed growth. At that time, the project would not have been of interest to anyone. Why?

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