The Covid-19 pandemic and its impact on the global economy has forced startups to rethink their growth strategies. While the Silicon Valley model has traditionally favored unicorns, startups valued at over a billion dollars, through rapid growth, the current market conditions demand a more sustainable approach. In this article, we explore how startups can adopt the "camel" mindset and learn valuable lessons from their ability to survive in harsh conditions.
Balanced Growth Strategies: Startups must master the art of balanced growth, which is essential to survive and thrive in adverse conditions. Instead of blitzscaling, which prioritizes speed over efficiency, startups must adopt a more balanced approach. This involves right-pricing from the start by targeting long-term customers and charging a fair value for the fair value for services from the start. Startups should also manage costs throughout the life cycle of their companies to align with a longer-term growth curve. This means making calculated decisions about investments to limit downside potential while keep the door open for significant growth when the investment is successful.
Changing the Trajectory: Managing burn throughout the life cycle of a company is critical to surviving tough conditions over a sustained period. While many Silicon Valley startups have a cash trajectory with a deep "valley of death" before profitability is achieved, startups must now take a different approach. They may grow in controlled spurts and choose to invest only when required by the opportunity at hand. After such a spurt, sustainability (and often profitability) is within reach again if necessary. This approach allows camels to maintain the option to adapt their growth trajectory to the macroeconomic hand they are dealt.
Long-term Vision: Founders must understand that building a company is not a short-term endeavor. Survival is often the primary strategy, allowing time to build a business model that resonates with the market and develop an operation that can scale. Competition exists, but the race is about who will survive the longest, not about who goes to market first. This means building a business model that is attractive to potential customers and addresses their painpoints rather than focusing on investor satisfaction. Taking a long-term outlook requires patience, but it can pay off in the end.
In conclusion, startups must think like camels and learn from their ability to survive and thrive in harsh conditions. Balanced growth strategies, managing burn, and taking a long-term outlook are critical to building a sustainable business. While the unicorn mindset has worked well in favorable market conditions, the camel mindset offers valuable lessons on how to weather tough times and come out on top.