Letters: Startup survival of the fittest
[Re: Founders have hard choices to make to keep our startups in pole position in the future, 5 Dec]
With a recession looming, struggling startups must rely on solving problems rather than burning VC cash for unlimited growth.
Agile startups can relieve pain points faster than big businesses – so long as they can survive the sprint. A customer-oriented business model will be just as important as strong leadership in the coming months to provide that cushion.
In the software space particularly, startups can act as go-betweens. In effect, they sit in the centre and add unique value while building integrations to existing applications. This quickly makes them irreplaceable to their future customers. As Big Data evolves, and companies produce ever-increasing quantities of mission-critical data, the market needs founders with vision and an eye for opportunity.
At OpenOcean, what we’ve seen from fellow VCs is not so much a reluctance to invest as a preparation to pounce. The capital is there, and investors will always want to be the first ones in thedoor. There is just a doubling down now in the industry on investment fundamentals: VCs want to back companies on a solid trajectory for growth and profitability – not on a long road to an uncertain destination.
For years, many startups have relied on abundant VC investment to chase growth at all costs — now, they need to take a step back and look at who it is that they are selling to.
Patrik Backman
OpenOcean