8 Ways Entrepreneurs Can Achieve Massive Growth During a Downturn For entrepreneurs who are willing to take advantage of opportunities, recessions can really be a time of growth. Here are 8 strategies for profiting from a downturn.
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A recession can be difficult for business, but it can also help with learning and consolidation in many areas of running a startup. The most prosperous businesses thrive in this period, find their niches, and rise to prominence. Furthermore, now is the time to strengthen key policies and procedures, close any loopholes, and streamline operations to make them more efficient, motivated, and leaner.
These are recession-proof ideals for growing a startup successfully in any macroeconomic downturn.
Pay attention to the fundamentals
Aditi Avasthi, the Founder and CEO of the Reliance Industries-backed edtech Embibe, advised startups to focus on the fundamentals and execute. Entrepreneurs may overcome any challenges they encounter by creating a superior product that genuinely adds value to people and provides outstanding service, all while keeping a close watch on unit economics.
"One must own their narrative and keep all their key stakeholders - employees, investors and customers - informed so they stay invested in the company's vision. Especially the people that work with you as they write the future of the company," she noted.
Build a brand that will withstand tough times
Manas Ranjan Hota, Co-founder and COO of Sequoia and Omidyar-backed DrinkPrime, an IoT-enabled customisable water purifier on subscription, guided entrepreneurs to think about strategies to expand their businesses during hard times before the recession hits. Build products/services and a brand that your customers love and trust. Make a program that will help them and promote you at the same time.
High retention rates and growth, he said, "will help you immensely during difficult times."
"DrinkPrime's NPS (net promoter score) of 53 is an example of the trust our customers have in us," continued Ranjan. "The power of word-of-mouth marketing in today's society is demonstrated by the fact that our referral programme accounts for 50% of the growth in our monthly subscriber base."
Be cautious yet confident
Resilience, according to Richa Telang, Founder and CEO of the employer branding firm TrueBlue Advisory, is crucial for creators to succeed. A leader must ensure that the team is confident and believes there will always be a wave in these difficult times. "We must balance caution with confidence. If you want to retain the best staff members, you should reduce and manage discretionary spending without making compromises. Try to become an expert at using the pivot as an opportunity to learn something new," she suggested.
Explore new markets or diversify your offerings
In times of economic depression, Prateek Toshniwal, an angel investor, emphasised the value of diversifying the products or services offered. By doing this, a business can access new revenue sources while lowering the risks associated with economic downturns. Consider the possibility of utilising the core capabilities in associated markets or industries. Diversification can help you achieve stability and untapped development possibilities.
Concentrate on growth while monetising
The definition of growth is changing in the present recession, claimed Soham Thacker, the Founder of the GVFL and Unicorn India Ventures-backed esports startup Gamerji. The core of business, which is growth with monetization, should be the emphasis of entrepreneurs instead of vanity metrics.
Thacker advised using marketing budgets strategically and concentrating on acquiring paying customers rather than users. Focusing on customer demands and offering appropriate solutions is now more important than using forced marketing, which is not only costly but also not long-term sustainable. "Massive growth can be achieved by focusing on core business strategies such as customer service, good product, and proper price points," he added.
Strategic partnerships are essential for accomplishing shared objectives and successfully overcoming obstacles in business, especially in the startup ecosystem. Numerous advantages come from these partnerships, including improved branding and reputation, increased market reach, risk mitigation through cost sharing, knowledge sharing, and competitive advantage. However, it is crucial to deal with issues like successfully managing conflicts and harmonising organisational cultures.
"By leveraging the power of strategic partnerships, organizations can drive synergy and collaboration, ultimately achieving their strategic objectives more effectively. Consider the collaboration between Axis and Vistara to provide the target market with improved proposals. Or Uber and Spotify working together to provide clients with a better transit experience," said Aryaman Vir, CEO, Aurum WiseX, a neo-realty investment platform.
During recessions, you must set yourself apart from the competitors because there may be more of them. Focus on innovation and explore ways to differentiate your goods. "Spend money on R&D to create new products, improve existing ones, or develop original solutions to customer problems. Differentiation can assist you in attracting clients even when business is slow," said Prateek Ruhail, Co-founder and CEO of Agility Ventures-backed Vanity Wagon, a clean beauty marketplace.
"By identifying new opportunities, exploring emerging trends, and innovating our products or services, we can effectively meet the evolving demands of our customers," stated Kapil Jain, Founder of Piro Space Metaverse. "By remaining agile and responsive, we not only gain a competitive edge but also seize the opportunity to capture significant market share."
Unleash the power of client retention and engagement
Unlocking the potential of customer engagement and retention is the key to attaining growth and creating a sustainable business in the present macroeconomic environment. Startups that put a high priority on knowing their consumers, investing in effective customer retention methods, and producing lasting value for their stakeholders are better positioned for long-term success.
"Entrepreneurs that take cognisance of the fact that customer retention is a critical growth metric, can build businesses that can weather unpredictable economic conditions, create lasting impact, and stand the test of time in the ever-evolving startup ecosystem. It is the ability to retain and nurture existing customers that truly makes it an Enduring Business," highlighted Avlesh Singh, CEO and Co-founder, WebEngage, a full-stack marketing automation platform.