According to a report from Sifted.eu, 94% of VC-backed start-ups will survive the next six months – despite challenges from the Covid-19 pandemic. Reassuring news from one of the most exciting corners of the tech industry, a study of this nature should help persuade would-be investors to continue funding the most promising businesses out there, giving the industries best talent more places to shine.
With over 1,000 companies surveyed across Europe – including the UK and Germany – another promising figure was that less than 6% of start-ups indicated any likelihood of closure within the next six months as a result of the pandemic, which further underlines the health of the sector. Given the relative struggles of other industries and sectors during this difficult stretch, how and why have start-ups continued to prosper?
1 – Launching new offers
Diversifying offerings has been one adjustment that has allowed many start-ups to continue doing business during the pandemic. As customer requirements have drastically changed, bringing their product in line with new demands and expectations has given businesses that may have struggled for relevancy a foothold in the current climate.
2 – Major product changes
For those start-ups still yet to launch, making major changes to their product so that the features being offered are more accurately pitched than they may have been previously, they’re using their market and customer knowledge to give themselves a better chance of success when trying to engage potential new investors and users. Pivoting a product doesn’t show a lack of faith in your original idea, but a willingness and ability to adapt when required – which is a strength.
3 – Amending pricing strategy
Not just a feature within the start-up world but something that’s occurring across the board – changing how users and customers are charged (or will be) can greatly increase adoption rates and interest in the business. Being understanding of both personal and business users likely lack of cash flow and working around that to secure customers whilst limiting their initial adoption costs is a long-term strategy many companies have adopted.
Amsource work closely with both start-ups and VCs to help manage and drive growth and scaling at critical points. Building bespoke teams and offering expert advisory to help guide businesses toward achieving their potential.