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How to recession proof your startup in 5 steps (so you don’t hit a bankruptcy brick wall)

How to recession proof your startup in 5 steps (so you don’t hit a bankruptcy brick wall)
Chris Hladczuk
Oct 07, 2022
2 minute read
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1. Find your Wedge

Wedge = a product that clearly beats the competition

Wedges make you feel like you’re not “selling” something.

Customers respond with…

“How have I not found this before?”

Wedges siphon off customers from your competitors.

Ask: “What’s a feature that only needs a 30 second explainer until a customer sees the no brainer”?

If you don’t have one, obsess to find it.

Once you find it, focus 1,000% on your wedge.

Wartime building begins by compounding focus on profitable wedges.

2. Raise “Too Much Money”

At Meow, we have over $25 million in the bank.

This is well over 10 years of runway.

Are we “overcapitalized”?

Maybe.

But the worst time to fundraise is when you need to fundraise.

Get ahead to secure dollars today to avoid desperation tomorrow.

3. Lean and Mean

You know that phrase “low man wins”?

In sports, the lower you are to the ground, the more leverage you have over opponents.

In times of turmoil, low startups win.

Low startups are nimble and lean.

Low startups move quickly.

They pivot quickly.

They adapt to crazy markets quickly.

Your goal?

Get leaner and meaner on your hiring needs.

Ruthlessly focus on the highest leverage hires and forget about the rest.

4. Fix your Finances.

Recession proof startups kill fancy trips and wasteful events.

They cancel unused software subscriptions.

Better yet, audit your finances.

One idea:

Pay one person on your team 10% of all dollars saved in unnecessary costs.

Trust me they’ll find creative ways to save you money.

5. Diversify Growth

Crazy stat:

50% of all venture capital dollars were spent on Facebook and Google ads.

Startups spent a decade dumping money into Google and Facebook.

But algorithms change all the time.

And “good” ad spend today can bankrupt you tomorrow.

So what’s your solution?

In personal finance, you diversify your portfolio.

In startups, you recession proof by diversifying customer acquisition.

But the real secret sauce?

Building an epic product.

The quickest way to fail is burn marketing dollars chasing a crappy product.

Written by
Chris Hladczuk
Chris HladczukOct 07, 2022
@chrishlad
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Written by
Chris Hladczuk
Chris HladczukOct 07, 2022
@chrishlad
Subscribe to our blog
Share this article
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*Meow is a financial technologies company, not a bank. The information provided is illustrative or for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy, sell or hold any security. The information is as of the date indicated and may change at any time without notice. Forecasts or projections of investment outcomes are estimates only and as such they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future investment results. Meow is not an investment adviser however we’ve partnered with Helium Advisors LLC (“Helium”), an SEC-registered investment adviser, to bring you certain investing features. All investment advisory services are provided by Helium. We are not affiliated with Helium however we receive compensation as a percentage of assets managed by Helium for promoting Helium’s investment advisory services. Our partnership with Helium gives us an incentive to refer you to Helium instead of another investment adviser that is not a partner of ours. This conflict of interest affects our ability to provide you with unbiased, objective information about the services of Helium. This could mean that the services of another investment adviser with whom we are not partnered may be more appropriate for you than those of Helium. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time. Helium accounts are not bank guaranteed or FDIC insured. 0.10% is sourced from treasury.gov's December 2020 52 week coupon equivalent yield. 4.6% is sourced from treasury.gov December 2022 52 week coupon equivalent rate yield. $460,000 calculated assuming treasury.gov's December 2022 52 week coupon equivalent yield based upon a $10 million deposit and held to maturity. Projected and/or hypothetical performance is intended to show only an expected range of possible investment outcomes based on historical average returns and standard deviation of each investment type contained in the investment mix recommended by Helium, but does not take into consideration the effect of taxes, changing risk profiles, or future investment decisions. Projected and/or hypothetical performance does not represent actual client accounts or actual trades and may not reflect the effect of material economic and market factors.
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