Entrepreneurship Tip #4: Growth During Slowdowns
The US economy is facing a slowdown across all sectors. For early-stage tech companies, this poses a particularly unique challenge – how to grow while facing headwinds. Below are four key areas entrepreneurs should pay particular attention to during a slowing economy:
Talent
At early-stage companies, tech hiring has been challenging for both entry-level and experienced leadership talent. Established firms are cutting the size of their workforce across the board. This presents an excellent opportunity for young companies to attract top talent. Crowdz has open positions across its organization and is actively hiring to enable growth.
Customer Engagement and Success
Your customers will also experience a slow down so it is important to understand their issues and provide targeted solutions to retain and expand existing customers and win new customers. ConverSight is redesigning customer engagement while fueling growth and clamping down on customer churn.
Managing Cash Burn
Early-stage startups must spend to attract talent, gain customers, and take market share. It is important to refocus expenditures to those activities that add true value and help customer engagement. Fresh off an new round of financing, Perennial has refined its customer acquisition strategy for more tactical growth.
Follow On Financings
Valuation multiples will ebb and flow through economic cycles. Companies that demonstrate traction, velocity, and stickiness of their product will find investor interest and get funded at higher valuations. Most of our portfolio companies have inbound interest from new investors as they look raise additional capital in the fourth quarter or early 2023.
To reference more research on growth during downturns, please reference these great pieces by the Harvard Business Review, Bain, BCG, and McKinsey.
In the News
IDEAL, a global leader in electrical infrastructure, and lighting supplies, publicly announced it will serve as the exclusive electrical partner for Rivet. This partnership, already in place for over a year, will provide Rivet significant sales and marketing resources to expand.