While funds for 2023 are being raised and startups are coming up against financial stress and pressure, now’s the time for teams to take a look at getting the competitive edge. Leveraging technical infrastructure can help support growth, taking the pressure off and helping startups to weather the financial winter.
We took a look with Scaleway as they launch The Next 100 Startups Programme to help teams scale. The programme aims to support startups to scale with long-term sustainable growth in mind by covering up to 80% of their cloud costs over the next two years. Check out the programme and apply here today.
After a healthy fundraising boost, you might have some cash on hand to get you through the coming winter, but what happens when we get into 2023? And what happens if the financial outlook gets more pessimistic? According to Scaleway, startups efficiently leveraging their technical infrastructure can benefit from savings as well as an enhanced value proposition, which will pick up investor attention.
Chasing the funding market
Right now, funds are being raised for 2023 and VCs are continuing to look for promising startups to back. There’s money available, but the stakes are high, competition is strong, and startups are becoming financially stressed.
Inflation and rising costs are contributing to this stress, and startups and their clients are both feeling the pinch. As a result, everyone in the value chain is looking for the best ways to stay financially stable, and this often includes cuts. All the while, the next fundraising round is approaching, and startups need to prepare now to get a good valuation that signals their continued growth and future success.
Flipping the dynamic
One of the best ones to improve fundraising prospects is for startups to flip the supply-demand dynamic by having multiple offers on the table. It’s the dream of many startups, to have multiple VCs chasing them, but it’s a pretty rare thing to happen and something no startup should expect or count on.
To prepare for the next round of funding, startups instead need to be working on proving and demonstrating how the team is ready to step up to the next level – showing potential for growth and continued profitability.
To do this, mature startups tend to focus on three business development areas: sales, marketing and product.
But, given today’s unique and challenging economic and geopolitical context – is this traditional approach enough?
Startups need to increase their value proposition
Given the reality of today’s context, startups need to work harder than ever to prove and increase their value proposition. Successfully doing so means they can raise prices, increase margins, incentivise client retention and encourage new customers to onboard.
It brings up some questions though: How can a startup boost the value of its product and services, while maintaining a significant runway, navigating increased prices, and tightening belts to survive? Where can they find the money necessary to not only maintain their business but re-invest in it to scale?
Using the cloud to save
Startups built on the cloud might just have a secret weapon they can use – their technical infrastructure.
For startups scaling with cloud service providers, the technical infrastructure is a matter of operating costs—costs that will grow along with the business, as the startup consumes more resources. Young businesses must find the balance between a robust infrastructure that ensures good product performance for their clients, and optimized costs.
The good news? The cloud sector has already recognized the need for cost optimization, and
offers multiple solutions to help.
For example, for optimal cloud flexibility, Kubernetes autoscaling will not only handle sudden influxes of traffic but will also automatically offload resources when fewer clients are online, thereby saving money. HashiCorp Terraform, an infrastructure-as-code solution which automatizes infrastructure management, takes away manual tasks from the to-do list and notably ensures resources are properly distributed across your production, development, and testing environments.
Now is the time to check your metrics and see what needs to be adjusted.
Another way startups can better position themselves to attract funding in 2023 is to check their storage, as it can be a guilty culprit when it comes to unnecessary costs. Moving storage to a less expensive space and keeping data lifecycles optimized are key cost-savers to explore.
Look to the ecosystem for support
Beyond architecture optimizations, startups should look to their ecosystem for support. International cloud service providers famously offer startups cloud credits to host their infrastructure on them, but when cost isn’t an issue, optimization isn’t either.
Though this is not an issue when cloud credits make up for the inconvenience, this approach does not necessarily provide a long-term path to success and care should be taken to make sure that when the cloud credits dry up you’re not left with an unoptimized and costly architecture.
How can cloud infrastructure providers best support startups’ growth?
Innovative programs are emerging today that select startups and provide them with technical and financial support. The objective? Empowering startups to reinvest in their business, improve their value proposition, and thus gain a competitive edge. This is the sort of meaningful support needed in the startup ecosystem during this difficult financial winter.
Scaleway’s programme, The Next 100 Startups Shaping Europe’s Future, is aiming to do just that – support startups to scale with long-term sustainable growth in mind by covering up to 80% of their cloud costs over the next two years. Check out the programme and apply here today.