RazorpayX has always been at the forefront of innovation & meaningful collaboration with startups.
A productive alliance is only possible when we learn from each other & build a community of like-minded individuals who share the same vision. The first step towards creating this engaged community came in the form of RazorpayX RTX where we invited a couple of founders who are united under the same cause of growth and are dealing with similar issues.
With RTX, RazorpayX aims to bring founders together for meaningful conversations. to the founders themselves.
When funding winter is mentioned in business circles, the narrative oscillates between two extremes: there is talk about how bad the funding winter is, but also about “what funding winter?”
We invited founders of successful businesses like betterhalf.ai, ShopFlo, Paycrunch, and ChangeJar to speak with Anand Krishna, a seasoned start-up founder & CEO of Inkle. This power-packed panel discussed the impact of funding winter on the larger business community & strategies that they have employed to counter this impact.
What did these founders learn from the funding winter, and what can we learn from them?
What Founders Learnt From the Funding Winter
Renewed Focus on Financials
It’s important to build a business that lasts. To do this, a razor-sharp eye on business fundamentals in the form of your P&L and contribution margin will be key to keeping your growth plans on track. on running your business mathematically, keeping a sharp eye on your P&L and contribution margin.
The contribution margin is the amount of revenue left after variable costs have been deducted from total sales. A very low contribution margin might make your business seem less attractive to investors because it shows that your expenses are eating into your profits.
One of the best ways to improve your contribution margin is to cut down expenses and make your current expenses more efficient.
The focus has to be on building your business to last – make sure that by default, your business stays alive. Take those extraordinary measures in the initial stages to create a default state of
A User-First Approach
The key is to create very sticky products that are user-centric. Once you understand your industry and target audience, founders develop confidence and conviction around their products.
Without conviction, it is difficult to stay true to one path – founders without confidence tend to pivot the product or change their approach, which both confuses and causes mistrust among customers and investors.
It is also vital to know exactly what your business needs and when it is needed – some businesses like ChangeJar need patience capital, and this knowledge only comes with a deep understanding of your product, the business, and the market.
The Best of the Best
Talent is important. It could be the single most important dimension of your business, and it’s up to you to make sure that the people that make up your business are the absolute best.
This is most important for startups since young businesses have smaller teams. Taking a product from zero to market requires bright minds and even brighter attitudes.
To build a solid work culture and foster creativity, innovation, and the best ideas, choose a high-quality, solid team.
Flexible Solution-Centric Strategy
Most new-age businesses are today delving into realms never touched before – neobanking, NFTs, and cryptocurrencies. Most of these industries are so new that there is no regulation or policy around them.
As policy catches up to these new-age business models, compliance issues may arise that founders will have to accommodate.
Keeping your business model flexible enough to accommodate external factors like policy changes, and macroeconomic instability like the funding winter and focusing your strategy on sustainable growth is something we can all learn from this recent fund crash.
Every founder at the RTX table had an interesting story to tell – from financing to hiring talent. Trends say that we are at the end of this funding winter, but if you know economic cycles, you know this won’t be the last.
Hopefully, the tips from these successful founders and our handy guide will help you navigate the choppy waters of the next funding winters to come.