In part one of this blog series, we discussed how a startup can survive in the current climate by optimizing their sales strategies. In part two, we will delve deeper into what founders should do to ensure they can thrive beyond 2023.
How Founders Should Think About 2023 and Beyond
As we look to the future, there are several steps that startups need to take to secure their long-term success. These include:
Get Deliberate On Your Cash Burn
In today’s climate, VCs are rewarding lower burn rates, and it’s harder to raise capital. Startups need to be strategic about their spending to ensure they can make their investments count. Rather than steadily burning through their cash, founders should consider a quick burn at the start to give their investments time to have an impact and ultimately allow for a softer landing. This strategy requires a clear roadmap of how the company plans to become profitable and stick to a relatively short payback period.
Find Repeatable, Scalable, and Profitable Go-To-Market Channels
Startups need to demonstrate that they have a clear and profitable GTM strategy. Showing profitability today or having a clear roadmap to profitability is vital. Companies need to be able to stick to a relatively short payback period, and there’s less tolerance for those that don’t have repeatable, scalable, and profitable GTM motions.
Focus Your Fundraising Efforts On Likely Investors
In a difficult fundraising environment, startups need to be more selective about which investors they approach. Founders need to research investors and identify which ones are relevant for their company’s stage, type of business, geography, and industry. The worst thing for a startup is to have a founder who is completely distracted by a fundraising process that takes them away from the business, from selling, and from cost management.
Increase Focus On What Is Working
Founders need to reduce distractions and focus on the core business and its growth. In today’s environment, where capital is less abundant, companies just don’t have the margin of error that used to be available for founders to try out different avenues. Founders need to focus on what is working and double down on it to increase growth.
Practical Steps That Startups Can Take To Secure Customers
Startups need to secure customers to ensure their long-term success. Some practical steps that they can take include:
Founders need to leverage their networks to secure customers. Building a program in which the founder reaches out and sets up the first conversation with the companies in their network can be effective. The founder should be involved in the sales process for as long as possible to ensure that they can leverage their network effectively.
Referrals are an effective way to drive business. Startups need to create an active referral pipeline and plot out the process to ensure that they can leverage referrals effectively.
Branding is essential for startups to get their products in front of potential buyers. Founders need to understand where their buyers spend their time and how to get their brand front and center in that space. Understanding what makes the buyer tick is important for positioning the brand and ultimately signing on more clients.
Startups need to identify the key verticals, locations, and customer types that are working really well and then double down on them. Investors need to see that the startup has clarity on who their key buyers are and that they have nailed their vertical.
Partnerships and resellers
Partnering with industry experts and resellers can be a game-changer for startups. By leveraging these relationships, you can get in front of key players in your industry and gain valuable exposure to potential customers. Unfortunately, many founders leave partnerships and reselling as a last resort, only considering them when they have exhausted all other options. But this approach overlooks the immense value that partnerships and reselling can provide from the very beginning.
For instance, you can compensate your partners for every referral, which incentivizes them to help you find new customers. This strategy may not be for everyone, but it’s an effective path to explore in the right scenario.
What We’ve Seen In the Past with GTM Efforts vs. What We See Now
The GTM (go-to-market) landscape has evolved significantly in recent years. In the past, startups could get in the door based solely on their product being something new, which was enough to spark a VC’s interest. But now, buyers are less concerned with new technology and more focused on solutions that can solve their problems more effectively, cheaper, or quicker, or that can generate revenue for their businesses.
To succeed in this environment, startups need to shift their focus from innovation to cost and time savings. They need to identify their target customers’ pain points and offer solutions that solve them quickly and efficiently. Startups also need to be strategic in their approach, focusing on repeatable, scalable, and profitable GTM motions to build long-term success.
The startup landscape in 2023 is highly competitive, and startups need to be strategic in their approach to not only survive but thrive, too. For more on how to survive as a startup, read here.