Product & Startup Builder

Recession warning! Have the "End times" arrived?

Added on by Chris Saad.

Every 5-7 years or so, Silicon Valley and related tech hubs love to declare, "The End Times Have Arrived."

In the last couple of months, similar rumblings have been bubbling to the surface. With talk of rampant inflation, crashing stock market and crypto values, and increasingly nervous investors, startups are wondering what will happen next - and how to organize themselves to survive.

Here are some things to consider...

1. Recessions can be bad for traditional companies but can often be good for tech companies that represent greater efficiencies.

2. Some of the most important tech companies in recent memory were born during recessions - in particular, AirBnB and Uber come to mind. These companies offered customers a cheaper way to navigate the world while offering entrepreneurs another way to make some money on the side.

3. This effect can be seen in pretty much all sectors of the tech world, including medicine, commerce, logistics, healthcare etc. This is because, in lean times, companies can no longer afford to tolerate operating waste. Tech is usually the first, best answer to this challenge. In this scenario, tech products often move from being "nice to have" to representing an urgent solution to a pressing problem.

4. Making smarter, more effective decisions is key to surviving lean times and coming out the other side stronger and better than ever. This should be your internal mantra AND your pitch to customers.

5. You may need to shed staff and trim valuations in order to deal with tightening investor sentiment. However, this should NOT mean slashing your best or most essential people who help you make smarter, more efficient decisions.

6. Take this opportunity to invest in polish, scalability, efficiency of decision making, and high-quality execution to come out the other side with better products and more momentum than your competition.

Finally, I'd like to say that, despite doom and gloom prognostications from investors, these situations tend to be massively overblown. They tend to blow over in 6-12 months once everyone remembers that tech is well placed to benefit from downturns and that the sky, is in fact, not falling.

Stay focused, execute well, and deliver value, and you'll do fine.