How startups can survive and thrive in a downturn

Don’t hesitate to cut spending

Alan Patricof: These kinds of times give you an opportunity for a halo or shadow over your head to say, “Listen, we have to cut.” And it’s a good opportunity to cut — as GE used to do, remember, every year they cut the lowest 10%. I always thought that was a terrible policy, but that’s how they kept on upgrading, they got rid of the lowest 10%. If there are people you’ve been thinking about getting rid of, you can do it under the halo or the shadow of a tough economy and getting tighter for it.

This is the best time to recruit

Jess Lee: I think we’ve been in this crazy talent war for so long, where you’re competing with FAANG, with crazy offers, everyone is recruiting everyone. And now suddenly, we’re entering this time where I think you’ll finally be able to get a high concentration of really great talent, and folks who are more missionaries than mercenaries.

Focus on your customers

Jess Lee: I also think you have pay very close attention to the mindset of your customers. If you’re a consumer company, all your customers suddenly feel poorer, we’re going through what looks like it might be a recession. And then on the enterprise side, budgets are getting cut, your friends are being laid off.

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Eniac Ventures

We lead seed rounds in bold founders who use code to create transformational companies.