How do you Navigate Uncertainty?

The Startup Help Desk

In this episode we answer questions about navigating uncertainty! The market and funding environment are changing every day, and managing those ups and downs is hard. We are here to help! In this episode we answer questions including:

• How do I know what metrics I need to raise money in 12 months?
• How do I know if I should spend more to grow faster or cut costs?
• How do we handle re-orgs at our big customers?

All of these questions were submitted by listeners just like you. You can submit questions for us to answer on our website https://www.thestartuphelpdesk.com/ or on Twitter @thestartuphd - we'd love to hear from you!
Reminder: this is not legal advice or investment advice.
Q1: I need to raise more funding in 2024, but I don’t know what the market will be like then. How do I know what targets to aim for to be able to raise money?
With the potential stampede of startups planing to fundraise in the first half of 2024, it may be hard to stand out amongst the crowd.

Instead of pinning your hopes on a future fundraise, consider growing the business and making money. If you can become sustainable by 2024, you won't need to rely on fundraising. Better yet, you will be more marketable to potential investors when the time comes.
In terms of targets:

• If you previously raised with zero or minimal traction, now you need to show accelerating traction, such as major customers and a healthy pipeline of new opportunities.
• 2x YoY growth should prove that you are on the right track and get prospective investors' attention.
• 4-10x YoY growth is better.

Q2: My business is growing but not fast. I could cut costs but that would reduce our growth further. How do I know if I should spend more to grow faster or cut costs to preserve money?
This is a hard question for everyone. You need to make a bet on the future:

• If your path is growth: can you grow fast enough?
• If your path is survival: can you survive long enough?

Put another way, what's your risk/reward ratio?

• Are you OK with moderate long growth and the business surviving, provided limited payouts in future?
• Or do you want to risk it all for a shot at a big outcome, remembering that there’s a good chance you could blow it all up and get zero?

Generally, you control your future by cutting costs, but this requires closing some doors.
Q3: Our biggest customer just had a big re-org and we’re not sure what that means for our contract. Their renewal is in 6 months but we’re not even sure who the buyer will be. How do we navigate this?
Re-orgs happen! A lot! They are a big form of risk and uncertainty. You need to build lots of relationships with a customer, not just with your users. Map the new org and figure out whose budget you are in ASAP.

Do not assume that your contract will just naturally transition and renew with the customer's new buyer. Instead, treat this like a new sale.

• Ask your current champion (the original buyer) to give you a glowing warm intro.
• Set up a call with the champion and the new buyer early in the process.
• Demonstrate that you understand the problem that the new buyer wants to solve and how you solve it.
• Communicate with the new buyer very often!

With the right process, you can transition your contract to the new buyer successfully.