Edition 20: How to prepare for 2024; State of European Tech in 2023; How to get your first customers;
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READS
The 100 Best Bits of Advice from 10 Years of First Round Review (First-Round Capital)
Ignore outward measures of success â capital raised, press, social media followers â in favor of a more meaningful signal: customer behavior. If you focus on all those other things, youâre not fueling your company. Youâre just gliding on tailwinds supplied by other sources. Youâre reliant on energy that youâre not creating. Payal Kadakia Pujji on finding product-market fit for ClassPass.
State of the Market 2024 (Forum Ventures)
Key findings from the survey include:
Majority of companies invested in were from NYC (19.6%) and the Bay Area (24%)
Popular industries invested in include Fintech (13.2%), Gen AI (12%), and Future of Work (10%)
Strong founders (deep domain experience plus grit) were the main reason investors said "yes" to an investment, followed by traction
Pre-seed market shows signs of recovery, but later stages are still facing downturn
75% of respondents confirmed valuations have decreased since 2022, citing an increased number of companies competing for a smaller pool of capital
The probability of a Seed company raising a Series A has fallen dramatically, so early-stage investors are taking on additional risk
To sustain their operations for the next 6-12 months, founders must secure early customers and generate revenue, but also recognize that revenue is no longer a supplement; it's an absolute prerequisite for securing futuren funding
OPINION: How to Prepare for 2024
đŽâđ¨ What a year has it been. In 2023, a heightened emphasis on profitability has resulted in the emergence of more robust and streamlined start-ups, positioning them for sustainable growth in 2024. Several IPOs, backed by venture capital, such as Instacart, Klaviyo, and Arm, indicate a gradual opening of the IPO window. There is potential for a resurgence in venture funding as well. Global venture investments totalled $73 billion in Q3 2022, showing an increase from Q2 but still reflecting a 15% decline compared to the previous year.
However, economic uncertainties persist. Concerns about a potential recession have resurfaced, with ongoing debates among economists regarding the likelihood of a soft or hard landing. The global geopolitical landscape, marked by events like the Israel-Hamas conflict, the war in Ukraine, tensions between China and Taiwan, and the upcoming US presidential election, contribute to additional uncertainties.
How to prepare?
As we step into 2024, founders must navigate a delicate balance between ambition and caution. Startups armed with a proven PMF and solid unit economics should actively pursue capturing market share. However, it's crucial to be ready to pump the brakes if economic conditions take a downturn.
Here are three key pieces of advice for founders as they approach 2024:
Adopt a Short-Term, Pragmatic Planning Approach:
Instead of mapping out the entire year, concentrate efforts on the first half of 2024. Exercise caution with projections but take immediate action to set plans in motion.
Implement zero-based budgeting to scrutinize all expenses. Continuously trim costs and assess the profitability of customer segments and geographies. For instance, evaluate the profitability of supporting SMB customers and consider pruning underperforming marketing channels.
Reinvest savings and cautiously increase investment in initiatives that promise measurable improvements in revenues or gross margins within the next six months. Think creatively about sales compensation in H1, such as boosting incentives for overachievement to motivate representatives.
Prioritize Proven Customer Segments and Regions:
While expanding the TAM is a long-term goal, focus on market segments with strong PMF and favourable unit economics. Consider adding experienced Account Executives (AEs) in core verticals.
Ensure that there are sufficient demand-generation resources to support AEs in building and maintaining a robust pipeline.
Invest in Tools and Training for Sales and Marketing Efficiency:
Emphasize productivity across the GTM organization. Prioritize sales training and consider parting ways with representatives who do not meet performance standards.
Explore generative AI tools to enhance sales workflows, automate outreach campaigns, streamline repetitive tasks, and automate support and customer success functions.
Check out tools like Oliv.ai for sales process automation, Regie for sales content automation, and Docket.ai for GTM technical automation in the portfolio for assistance in these areas.
Founders, armed with lessons from the challenges and successes of recent years, should now apply these insights. Stay vigilant about cash runway, concentrate resources on proven strengths, and optimize GTM efforts. Despite uncertainties, 2024 presents ample opportunities for startups that can embrace efficiency without sacrificing ambition.
ATTEND
5 December
đşđ¸ Her Workplace - Female Founder & Investor Event in NYC
Step into a networking event with a twist, aimed at generating actionable results. We envision a platform where every female founder walks away with something substantialâbe it a connection with a potential investor, a fresh business insight, or a lead on a new business partner or client to help push their ventures ahead.
âHere's how it will unfold: Each female founder gets a 2-minute window to pitch their current needsâwhether thatâs fundraising, finding a co-founder, PR, or hiring the right talent.
đŹđ§ 7 December
Building Thriving Communities in Tech
ââToday, it's clear that building and leveraging communities has become a cornerstone of successful tech marketing. These communities not only shape brand identity but also influence consumer behaviour, fostering innovation and driving progress toward a brighter future.
đť 13 December
Reset your routine: How do startup founders (actually) get stuff done?
âItâs no secret that building a startup is intense â but there is growing candour around the mental toll that comes with it. What productivity and well-being hacks do founders and investors swear by? In the spirit of making new year's resolutions, weâll discuss strategies for getting shit done and handling the pressures.
LEARN
đ We are watching by Y Combinator
YC Partner & Former Head of Growth at Airbnb, Gustaf AlstrĂśmer, gives tactical advice to answer the question: how do I get my first customers? Gustaf will cover this topic for all kinds of companies - whether you're B2B or B2C.
đ And reading the State of European Tech 2023 by Atomico
The State of European Tech 2023 offers the broadest and most incisive insights into the forces shaping the ecosystem along with the steps that must be taken to fully realise the opportunity ahead.
Please note that any charts, data, or projections discussed are subject to change without notice, may differ from opinions expressed by others, and are for informational purposes only. They should not be relied upon when making any investment decision. The content speaks only as of the date indicated; Pretiosum Ventures has not independently verified third-party links or sources, nor makes representations about the enduring accuracy of such information.