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> Are you excited and prepared to run this company for the next two years? > startups that merely survive won’t be judged merely against their peers that also
by rgbrgb 7y ago
> Are you excited and prepared to run this company for the next two years?
> startups that merely survive won’t be judged merely against their peers that also survived; they will also compete with brand-new startups for capital and companies that didn’t need to hunker down during lean times.
Interesting perspective here. It definitely cuts both ways.
The converse is that if you're able to find product market fit in a down market, you'll have a lean and focused operation for the upswing to accelerate. For most companies that will mean a product people really want, and in the surviving case, probably profit and optionality.
- hef19898 7y agoWhich raises the question for the surviving start-up, with a lean operation, customers and profits, why this company would need and want VC money. Unless, of course, the only measure of success is VC investments.
- simonh 7y agoThe classic answer is in order to scale up rapidly before a competitor springs up, out-grows them and dominates the market. That's not necessarily a concern for all companies though I suppose, depending on the market they are addressing. Every company will be in a different situation. For some it might make perfect sense to tough it out, but for others that might not make sense. If you're burning cash, why do that for 2 years when it's pretty clear you're not going to be able to make any progress over that time? You'd come out of the down turn with a stack of debts any possible competitors won't have. In a few years time if the business case still make sense, you might even be in a position to try again.