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  • Writer's pictureMatthew Lerner

How to survive a "VC Winter"

How to Survive the Coming Downturn in Startup Funding


“It’s starting to feel like a VC winter.”

That’s according to this week’s Economist, reporting that venture funding has fallen by 1/3 in the past year. (You already knew that, right?) But there’s an upshot…

History shows startups who survive downturns tend to thrive in the recovery. (Uber, Stripe, Slack, Mixpanel, and AirBnB were all founded in 2008-2010, in the wake of the global financial crisis.)

So how do you survive, and even thrive, when cash is tight? You prioritise really really well.

Figuring out what to prioritise

First, remember, startups are not a “game of inches.” Almost every great startup, initially, found a single big growth lever and prioritised it above everything.

Now the question is, have you found yours? You’re either looking for your big lever or pulling it. And until you find it, nothing else matters.

If you’re not sure whether you’ve found your big growth lever, you probably haven’t. (If your “lever” is a bunch of things, then it’s not a lever.)

How do you find your big growth lever?

The clue is in the verb, “find.” It’s an ongoing search, and your entire organisation has to constantly observe and apply learnings from what works and doesn’t work. Everything you do should make you a little smarter.

Throughout this process, your KPI will become your rate of learning. How many times per week are you learning something new about your customers’ needs, wants, worries, and expectations? Did you find new patterns in your data? How many times did you hear something that surprised you?

Here’s a template “Experiment Doc” we use with teams in our coching programme, it’s a list of questions to help them draw lessons from every project, even the failures.

Simple next step

Have an honest conversation with your leadership team – are you looking for your big lever or are you pulling it? Are you running the playbook or figuring it out?

And, if you’re “figuring it out,” here’s some questions to make it more concrete:

  • If you’re buying ads that are barely paying for themselves, are you experimenting and optimising the whole funnel? Do you know why they’re not working? (video: how to debug a failed campaign)

  • If your salespeople are behind quota, are they trying new approaches and sharing what they learned? The best salespeople are great listeners, and can be a valuable source of insight.

  • If nobody’s clicking on your posts and your SEO isn’t ranking, are you rethinking your content and approach? Are you studying content that your audience likes?

So, if you want to survive the VC winter, focus on big things and focus on learning. Remember, the goal is to find your big levers, not just pull the small ones harder.

I hope this helps!

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