How will you adapt your startup to what is coming? The Pandemic tested many businesses, some failing but others surviving and some even thriving. But now, even they may need to consider a business model or strategy change to reflect the new investment world today. You may need to make bold, uncomfortable decisions in doing things differently. Rather than thinking about how to be a unicorn, you should read on to see if being a camel applies to you.
The 2010s was the golden age of venture investing in early-stage technology startups. Buoyed by the success of Facebook’s IPO and the extraordinary funding rounds of Uber, Airbnb and others, hundreds of billions of dollars were spent searching for companies that could be turbo-charged into world domination. The focus was on relentless, high-cash burn growth, and then the Pandemic happened. Whilst venture funding reached record highs in 2021, it came crashing down as high inflation, recession, and war became the defining aspects of the 2020s. According to Dealroom, Q1 2023 was the lowest quarter for venture capital investment in three years. Venture capitalists changed their tune. Instead of Unicorns with exorbitant burn rates, they prioritised something else now: profitability. Enter the camel.
Camels must survive freezing cold desert nights and blistering hot days, being able to walk up to a hundred desert miles without water. They can survive in hostile environments because they are incredibly efficient at conserving food and energy through their humps; they lose very little water to sweating and have thick top fur for shade and thin lower fur for heat loss. They have adapted to a hostile environment where resources are rare and far between, precisely the world many startups are entering now. With cash sparse and recessions looming, founders should start working on adapting to their hostile environment. Will you focus on a smaller market and find a niche? Will you focus on launching one product rather than three simultaneously? How will you tailor your messaging to be ultra-resonant with your target audience and maximise your marketing spend? By focusing on these, you will prove your unit economics, the resilience of your business and the path to profitability more quickly, providing a message that investors can get behind. The 2010s were the years of the Unicorn; the 2020s will be the years of the Camel.
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