Startup Survival Guide: Navigating Growth vs. Cost-Cutting in a Downturn
• Survival mode of slashing costs to extend runway has drawbacks; timing the market rebound and still having resources to ramp back up is risky
• Growth mode by boosting sales, marketing, shipping new products can conquer your market when competitors retreat; attractive for raising funds
• Bootstrapping mode by focusing on efficient, profitable operations rather than hypergrowth can be less risky than survival mode; question is staying competitive
• Each path has risks and upsides contingent on cash reserves, competitor actions, profitability prospects, etc.
• Founders have options beyond cutting costs; wise to consider growth or bootstrapping alternatives