Why Recession May Isolate Recession-Tolerant Startups From ‘Hacking’

good news? A well-run company can still thrive.

unavoidable physics Economics is up to us. What goes up must come down. And we seem to be heading down the equation.

But not everything is lost. Venmo, Instagram, Uber and WhatsApp if you need a notification All released during the Great Depression 2008.

When you think of a recession, you remember what an electrician said while working from home when the dot-com exploded. I asked him if he was worried about the economy affecting his job, and he looked at me and said as he drilled another hole for the wiring. “ah. A bad economy eliminates hacking.”

If your company lacks basic business fundamentals and you’re short on cash, you’ll probably have to do some math. But again, you’ve probably always been. But with a solid foundation and a solid foundation built on good ideas, any storm can come.

The question is this. Are you building what is essential to the core of your customer business, which Mallun Yen, founder and CEO of Operator Collective calls painkillers? Or are you making less essential things she calls vitamins?

Painkillers vs Vitamins

“Companies that build analgesics over vitamins, particularly those that build solutions that are technically difficult or difficult to develop, or that anticipate changes that are fundamental but still mainstream in an industry, are particularly well positioned to navigate macro conditions beyond their control. . Painkillers include products that increase revenue or significantly lower costs in a tangible way,” said Yen.

She said these startups could fit into any category as long as they help businesses work smarter. This is even more important in an uncertain economy.

“For example, we have a company that is investing in enabling our customers to do things in ways they have never done before, which can significantly boost our sales. Another is to substantially lower cloud infrastructure spending. As more data is stored in the cloud and those queries and other analytics have to be run, it’s going to be a headache for businesses overall.”

CapitalG’s general partner Derek Zanutto said that while many businesses may experience short-term problems due to market fluctuations, his firm still expects many to grow and thrive over the next few years.

“Some of the great companies have been founded or emerged stronger than ever in weakened market conditions. I am especially optimistic about startups helping businesses harness the power of data. Good use of data can help businesses contain costs and generate more revenue, making it a business sector that is resilient to recessions in the long run,” said Zanutto.

Soma Somasegar, managing director at Madrona Ventures, added that his company has been investing in intelligent applications and is sticking to the plan no matter what is happening in the macro environment.

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