I Started 2 Companies During Recessions: Here Are 4 Tips For Scaling Your Startup During a Downturn
Successful startups are product-led, customer-focused, scrappy and super-competitive. Nothing gets you there faster than building in a downturn. I've done it
By | Jyoti Bansal | www.entrepreneur.com
The message was written on a tombstone: “RIP Good Times.”
I launched my first company during the Great Recession. AppDynamics had ten employees and a product implementation problem with Netflix, our second customer, when Sequoia Capital released its now famous RIP memo in October 2008. Many early-stage companies around us died off while funding disappeared. I watched as our runway dwindled to just a few months. I was building at a time of mourning.
Fast-forward to 2022, and here we are again — with grave warnings from investors. Call it a “startup recession” or a VC funding drought, but inflation is up and the market is down. However, this doesn’t have to signal demise for the next generation of entrepreneurs. Downturns force founders into fight-or-flight mode. Survivors can emerge even stronger.
AppDynamics thrived and went on to a $3.7 billion acquisition. That was not my only experience with building in a downturn. In July 2020, while the pandemic frightened off institutional and retail investors alike, I launched my cybersecurity company, Traceable.
Doom-and-gloom headlines exaggerate market changes, but history proves success is possible. With that in mind, here are four tips for startup survival: