“How to diversify risks and develop young companies in a period of instability?”, — write: epravda.com.ua
In 2022, the largest war in modern history began, followed by a financial crisis. All this once again radically changed the lives of millions of people, affected the economy, society and business. And although the world of startups has always been full of risks, economic crises and wars have multiplied them many times over. In such times, the usual rules fail – investors cut back on support, infrastructure degrades, and uncertainty becomes a part of everyday life. However, it is instability that increases the demand for innovation: it forces us to review old conditions and use new technologies to the maximum. How can startups develop in such conditions? How does business respond to the crisis? How crises and wars affect the development of startups The younger the startup, the more it is affected by any crises. First of all, this applies to four main aspects – investment, demand, costs, personnel. Advertisement: Read also: How to effectively work out a communication crisis Reduction of investments: as risks increase, investors reduce the amount of funding. Owners of capital either move it towards more stable companies (startups at later stages of development) or withdraw it to other regions, avoiding countries with a high level of uncertainty. Decrease in demand: during the period of war and economic crisis, the purchasing power of the population is reduced – more priority is given to essential goods, reducing the demand for innovations, new products and services. Increase in costs: accompanying inflation and rising prices for production and logistics force budget cuts and “optimization” of operational activities. This is especially critical for startups without excess capital. The outflow of qualified personnel: specialists with experience in unstable conditions may decide to immigrate. After the 2020 pandemic, this aspect is the least influential, as there is the possibility of remote work. However, in some cases, war or economic crisis can lead to the growth of certain areas. For example, after 2014, the development of the segment of IT technologies and cryptocurrency startups accelerated in Ukraine. In the USA, after the financial collapse of 2008, alternatives to old, inefficient technologies began to actively develop – WhatsApp closed the niche of cheap messages instead of expensive SMS, such projects as Airbnb and Uber simplified and automated the rental of housing and transportation. Is this always the case or is this the exception to the rule? And what does a startup need to grow? Advertisement: How startups survive in war and crisis Survival of startups in war requires adaptability, point control of resources and the ability to find opportunities. For example, reorientation to foreign markets – creation of decentralized teams and development of export directions. Finding new markets: it is important to study the changing needs of the domestic market – to assess the demand for practical solutions that a startup can offer. It is also worth exploring the possibilities of international markets – finding new audiences, launching the export of your product with the help of online marketing. Forming a remote team: to diversify risks, it is important to use the opportunities of global digitalization to your advantage and create a decentralized team that provides flexibility and reduces office costs. New forms of raising capital: consider ways to find funds that have proven their reliability in the last few years. For example, services for crowdfunding, the launch of cryptocurrency tokens in the ICO format – since 2017, they have enabled startups to attract investments from anywhere in the world. Simplification and optimization: use all the tools for automating processes available today – online payment and logistics solutions, AI-based chatbots, voice assistants, site builders. And Airbnb, and Uber, and the PayPal service in 2008, and Zoom after the coronavirus pandemic offered one thing – a cheap and practical solution that turned out to be in demand against the background of expensive analogues. Against the background of other rules of survival, this is one of the main ones. Another rule for reducing the impact of any shocks is to focus on solutions that can be quickly implemented and tested. For example, online marketing. Where to look for solutions for startup development Startups that have decided to focus not only on domestic but also on foreign markets, use available technologies, are able to maintain themselves and develop. It often happens that during a crisis, projects slow down or completely disable important elements of promotion, for example, advertising. However, such saving does not contribute to the preservation of funds, but deprives the opportunity to receive them in the future. But this does not mean that there is no need to cut costs – it is important to allocate them correctly. Such a solution for startups today is to go online – if the project is not presented online in 2025, then it is actually invisible to customers and investors. To avoid this, it is important to develop a presence on the network – to “become visible”. Access to the global network is a solution that can achieve the above goals: find new markets and new investors, focus on exports, automate and optimize internal processes, reducing costs. At the same time, the achievement of all these tasks does not require large resources – only a few marketing tools adapted to a new audience. They include the project website, social profiles, advertising. Global presence in the network is also important – information about the startup and its ideas on specialized aggregator sites, partnership with related companies and speakers, opinion leaders. Each tool must be adapted to the audience. Global and expensive research is not needed for this today – analysis using AI based on open sources is enough. For this, for example, the same ChatGPT has special assembly modules. An advanced designer is enough to launch your own business card site or online store, one-page landing sites for targeted calls to action by users from specific audience segments. Modern versions of this tool also use AI, which, based on a database of templates and a text request from the client, is able to create and deploy a website within hours. Despite the war and economic instability not only in the country, but throughout the world, startups in Ukraine continue to launch and develop. It is not easy, but possible – by being flexible (connecting to foreign markets, creating a remote team) and ready to use modern solutions (online tools, AI-neural networks). Economic crises and wars inevitably bring chaos to the usual way of life, but for startups it is also a time to look for opportunities. Those companies that are able to adapt, optimize processes and offer in-demand solutions will not only survive, but also develop and probably become new market leaders. And while risks are inevitable, the rewards for determination can exceed all expectations.