Technology is a cyclical industry. When our customers are going through tough times, so do we. Technology budgets are often first to get chopped. This makes it tougher for us to make sales and grow our businesses. Couple that with the current VC funding environment and you have a difficult situation on your hands as you grow your startup.
Still, amidst all this doom and gloom there are some positives. So, let's look on the bright side:
Realistic expectations: When times and capital are plentiful, VCs often push portfolio companies to grow fast, no matter what. This leads them to take on risks that a "normal" business wouldn't do. They hire fast. Market quickly, approach big partners before they're ready and release products that might not be truly ready.
I see an opportunity these days to align the expectations of all stakeholders around realistic and sane objectives: ship a stable product, make sure current customers are really happy. Slowly add new customers taking the time to ensure each new one is a happy one.
This approach ensures you're building something solid. And given the current exit environment, you need to be building for the long term.
Less competition: Darwinian rules apply. Expect some of your competitors to drop out as they run out of funding. Take the steps now to ensure you don't drop out as well.
Keep your employees: In places like the Valley, employee turnover is high (like 30% a year). That's going to go down. Expect that your employees are going to stay put. Don't take that for granted. Make sure you pay attention. Still, overall, this should be one less worry for you.
Smaller management teams: In good times, startups somehow end up with big management teams. Each time you add someone senior, you take a big risk. Sure, they bring deep experience and contacts, but they can have a big impact on culture and internal dynamics. Plus, they come with their own preferred people and ways of doing things.
You have to choose new management team members very carefully. In the current environment, you will have more time to do this and more candidates to choose from. You may also decide you can go further than you thought with your current team.
You will grow: No matter what happens to your company, you will grow as an entrepreneur and a manager. When times are good anyone can make a go of it. Now is the real test. Fighting to make sales, making tough calls like layoffs to extend runway, keeping the lights on so you can fight another day. These experiences will make you better.
So, look on the bright side. And in the words of Bobby Mcferrin - don't worry, be happy...
