Every startup in the emerging market is facing the reality, currency instability and rising rates caused funding to dry up, valuation to go down and operational challenges to increase exponentially, which led to much higher potential failure rate, but there are some tips that could help you avoid failure.
– You have some Family & Friends money to help your startup in the beginning, but not having that source of funding in the beginning of your journey could make the failure rate chances go much higher.
– Make sure your product has a customer who is willing to pay for it, please do not fall for the illusion of giving the product for free and the customer will pay later as they will find your product amazing. The tactics that work in boom times do not work in bad times. You do not have the right market product fit, if there is no customer willing to pay now for the product/service your startup is offering.
– Do not fall for the trap of heavy marketing to attract customers, it is time to think creatively, how can you with minimum marketing budget makes the greatest possible impact, in tough times if you spent your money on advertising you may not be able to raise capital if you failed to reach large enough paying customers, we are in an inflationary times and customers are more conscious of their spending, so better think very creatively on how to spend less for max impact, do not spend big on marketing unless you are 100% sure of your coming funding round.
– High salaries could kill you, so unfortunately you have to hone your management and project management skills to work more with part timer, people who can do the job without having a fixed salary, may I suggest better have more than one founder, one of them dedicated for the startup, but others have full time job somewhere else with secured fixed salary, but they help build the startup against founding equity not fixed salary.
– Stop the illusion about high valuation and skyrocketing sales, be very realistic. It is important for your own emotional health and very critical for your potential investors. Anyone who lives in the illusion mode of 2021 when everything used to be great will have a tough time even keeping his own team. Be realistic to avoid disappointment.
– Gather information and be master of details and micro management, fancy story is no longer enough, it is time to dig for tiny details, you cannot hire many people to take care of the details you do not know, you have to know it yourself and likely it will means working long hours, there is very limited funding opportunity for fancy story that is not supported by founder who knows all details to the bones, being the master of details gives needed assurance to the potential investors who are worried to make a mistake in such tough times.
In a nutshell, when the going gets tough, the tough get going.
Malek Sultan: Co-Founder of Disruptech VC
