Outcalt & Johnson: Retail Strategists, LLC
  • Home
  • Perspectives (Blog)
  • Thought Leaders
    • Retailers Hold the High Cards Now
    • Coming Soon: Impending Blight
    • Amazon's Relentless Disruptiveness
    • 3 Levels of Retail Accountability
    • 9 Steps to a Retail Growth Plan
    • Turnaround Case Study
    • Follow on Twitter
  • Innovative Team
  • When to Call Them
  • What They Do, and How
    • Strategic Retailing
    • Sell My Store, Please!
    • Retail Turnaround Experts
  • Projects by Client Type, Size, Location, etc
    • Crisis/Turnaround
    • Assessments/Action Plans
    • Owner Issues/Organizational Development
    • Growth Management/Target Marketing & Merchandising
    • Financial/Restructuring
  • Links to Recent Clients
  • About
    • Bios/Credentials >
      • What People Say About Them
    • Co-Founders, The Retail Owners Institute®
    • Retail STRATA:G® Online Resources
    • Get to Know Them: Online Webinars
    • Retail Speakers
    • Custom Webinars
  • Contact

Business Reality for High Tech Startups...And You?

5/31/2022

 
Picture
Have you seen what the Silicon Valley venture capital firms are saying to the  startup firms they've invested in?

​While it may be tempting to smile and nod approvingly at this dose of business reality, there's a ripple effect to be aware of.

As reported in the May 31 edition of the Wall Street Journal*, "Their advice includes cutting costs, preserving cash, and jettisoning hopes that hedge funds or other investors will swoop in with big checks."  
  • "The cost of capital has changed materially, and if you think things are like they were, then you are headed off a cliff like Thelma and Louise," wrote Bill Gurley, a partner at Benchmark Capital. 

  • Sequoia Capital "advised companies to cut expenses quickly and preserve cash. Companies need to control spending, focus on quality and lower risk."

  • "The boom times of the last decade are 'unambiguously over,'"asserted Lightspeed Venture Partners. 

  •  Y Combinator "is urging founders to cut staff, reduce ad spending and raise prices."

Quite a wake up call for some of these firms. But one that could have a major ripple effect for your business.

Why? 

Because many of these firms are likely ones that you have begun using, whether to source product (online wholesalers), host your e-commerce operation, provide delivery services, provide your payment processing, or POS services, or payroll services, or do your bookkeeping, etcetera.
  • What actions will they likely take to please their investors?

  • What might their scramble mode to focus on profitability look like?
    ​
Meanwhile, controlling expenses, focusing on profitability, and most importantly, managing inventory turns are all proven techniques very familiar to today's retail owners. Add to that a sharp focus on your most profitable customer, and you are well-prepared to ride out theses economic times. 

Today's announcement about venture capital money's warnings to tech startups may seem a distant issue. But we see it as a major "heads up." Better to be advised than blind-sided!

----
* "Startups Get Tips on How to Stay Afloat," Meghan Borrowsky and Vital Monga, The Wall Street Journal, May 31, 2022.
©Copyright, Outcalt & Johnson: Retail Strategists, LLC and The Retail Owners Institute®

Comments are closed.

    Tips, Tactics & Insights  from Retail Strategists

    All
    Culture
    Financial Strength
    General
    Inventory Management
    Leadership
    Owner's Responsibilities
    Pandemic
    Perspective
    Retail Growth
    Retail Projections
    Strategic Opportunities
    The Economy

Services
Perspectives
Thought Leaders
Contact

About
Outcalt & Johnson: Retail Strategists, LLC • A Consulting Team for the Retail Industry