No matter what headwinds the economy faced in 2022, it’s still a good investment to reach out to a digital product agency to boost your business by making it easier for customers to connect.
It was a challenging year for established businesses, and that goes double for leaders of startups trying to guide their ventures toward profitability.
According to Forbes, some of those difficulties were beyond anyone’s control, so they just had to be endured:
- Inflation—High energy costs and pent-up demand for products put intense pressure on prices.
- Labor shortage—The hard-charging economy created plenty of jobs. The problem was finding people to fill them.
- Cash flow management—Delayed payments from customers put stress on entrepreneurs’ ability to pay bills, workers, and rent.
Leaders of startups also faced perennial challenges, including
- Time management—Time is a precious resource, but many entrepreneurs have difficulty prioritizing and delegating tasks.
- Funding—Generating funds is always an issue for startups, but economic pressures on potential angel investors and venture capitalists combined to make funding harder to secure.
No matter the potential speed bumps in front of your business, the only choice is to keep moving forward. That means perfecting your product or service, hiring the right people, connecting with a company for digital product design for startups, and a thousand other priorities.
If crystal balls exist, they’re probably cost-prohibitive. For most of us, the future is cloudy and will only reveal its true self in time.
However, all successful businesses have ridden out difficult climates, so there is a way forward for leaders driven to make the best out of whatever situations they face.
Creating the Right Team
People are vitally important to startups. It’s impossible to tell if every potential new employee will work out, but there’s a process for finding the people you need:
- Evaluate which positions need to be filled.
- Write the job description.
- Post your job opening.
- Sift through the applicants.
- Interview the qualified candidates.
- Follow up with the interviewees.
- Extend the job offer.
- Conduct a background check.
If you’re having difficulty finding qualified candidates to hire or even interview, you have options, especially if you’re willing to look outside your company and outside the country.
Outsourcing and offshoring are ways of hiring skilled people for short-term projects. They won’t fill your staff for the long term, but they handle things like digital product design for startups while you focus on your core business.
Countering the Funding Crunch
Interest rates have gone up, and money has become harder to get. As a result, venture capitalists are looking to invest in companies that already have a sales record with existing customers and strong revenue retention.
Websites and mobile apps are important tools when it comes to boosting sales, building a customer base, and impressing venture capitalists in the digital age.
However, when money’s tight, don’t let the great be the enemy of the good. Partner with a company that does digital product design for startups that provides quick turnarounds, functionality for now, and the capacity to scale up over time.
Market valuations are dropping throughout the business world, and that’s certainly impacting startups. Founders of new ventures are offering new investors deals that let them get their money back before anyone else or make higher returns whenever they exit.
Some startups are resorting to bootstrapping, which involves reinvesting the company’s revenue into operations. This gives founders the chance to
- streamline operations
- resolve pain points,
- improve the customer experience
- further develop offerings
Some experts see the tech startup crunch lasting for another 18 months. Expect Big Tech companies to be on the hunt for startups that are developing next-level technology but have run out of cash.
Getting swallowed by a larger company at this stage might not be your entrepreneurial dream, but you might be able to cash in your chips and be ready to play again when the business climate is more in your favor.
Preparing for a Recession
In November, stocks were down 20 percent, and many economists are predicting a recession. Some think the nation might already be in one.
We get the business climate we get, not the one we’d wish for. The Harvard Business Review suggests five steps to help startups prepare for a downturn:
- Take steps to extend your “cash out date.” Now is not the time to indulge in “nice to have” expenses.
- Embrace your best customers. CEOs need to reach out to customers and even hit the road with the sales force.
- Stay close to your venture investors. Communicate often to make sure they see your long-term potential.
- Embrace your best employees. Spend time with them to understand their mindsets, and consider offering additional stock options.
- Celebrate your unique culture. A unique culture motivates your entire team to fight through adversity.
Potentially Beneficial Trends
In order to get the most out of 2023, focus on generating positive cash flow rather than just aiming for profits. Steps include
- invoicing promptly
- seeking out short-term funding
- keeping a close eye on your outgoings
This is also the time to secure your supply chain. No one wants a repeat of the disruptions that occurred during the COVID-19 pandemic. Review contracts, look for ways to diversify your supplier base, and build up your stock levels.
If you already have a website or mobile app, this could be the right time to expand features. Hiring a company that specializes in digital product design for startups could enhance the customer experience and result in increased sales.
As consumers become more focused on the environment, you can gain attention and sales by showcasing your company’s sustainability efforts. Paying lip service could backfire, but consumers are ready to pay more money for sustainable products.
It’s also a good time to review your processes. While the agile methodology has been widely embraced by the tech sector, some see it as causing stress and tension. Looking at ways to remove friction can increase employee satisfaction and reduce costs.
You also might want to evaluate your products and services to find ways to make them easier for customers to buy and/or use. Convenience is king, and you can come out of difficult times with a product or service that’s much more attractive to potential customers.
These suggestions won’t work for every company. Pick and choose what you think will work for you and your customers.
Know Your Market
Market research is about digging into business data to learn how to improve.
Qualitative research involves conducting focus groups or polling a small number of people to get their impressions.
Quantitative research could include online and phone surveys of 400 people to get a representative sample of data.
Market research for startups can provide help with:
- concept development
- marketing insights
- profiling your target customer
- picking the right market
- choosing the right price
- loan acquisition
- risk elimination
Intuitio Labs has helped companies navigate good and bad economic times for nearly 20 years. In addition to providing digital product design for startups, we consult with companies about economic shifts, hiring, and more. This has allowed us to grow even during contracting economies.
If you need to add talent to power your continued growth without increasing costs, now is the time to connect with an experienced product development partner that knows how to leverage the power of global talent.
We’re mindful of our clients’ budgets. We also know what investors are looking for when making decisions about a startup’s long-term prospects. Intuitio Labs can give your company a leg up when you’re seeking funding.
Visit intuitiolabs.com to learn about our consulting services as well as digital product design for startups.