During the Carta Equity Summit, several founders and CEOs spoke about managing your business during uncertain times. Here are some great takeaways from the panel:
Building a company is difficult in the best of times - now add an economic pullback, a focus on belt-tightening, and shrinking fundraising options. The shifting economy requires founders to be more thoughtful about the bets that you take, in particular knowing that capital is no longer a commodity. There's a need to really focus on the things that you think are going to drive disproportionate value in your business. Being hyper-focused on the core drivers of your business is key.
So what does that mean in practice? Many would say to focus on two things- the core product, and sales. And that's it. Nothing else. Dial down on startup perks and experiments that aren't core to the business. And look for strategic growth opportunities through partnerships and acquisitions. (In tough times, you might find some willing targets.)
Companies should reinvest everything back into their own customers and into their product, Joe said. Many of the businesses built during the bull market of the last decade were built on "low-calorie" growth-an over-reliance on channels such as paid social media. You build a product and then in theory, you optimize a few Instagram ads and then you're growing. In reality, that's not sustainable because it's an inflationary channel.
Most founders are looking to reduce headcount now, especially those who "overhired" during the last two years of surging growth, Brian said. But do it strategically, he added. If you cut, try not to make cuts to the product.
And make sure you address team morale by remaining transparent and communicative: Gossip can take on a life of its own, he said, and key employees are more apt to take calls from recruiters if they are not hearing regularly from their leaders in all-hands meetings and other forums.
What strategies are you implementing as we continue to see uncertain times? What advice do you have to share with your peers? Check out the entire panel discussion and more below.
CES Recap 2022: Start-up Growth in a Shifting Economy | Carta
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Brent Devey
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