Startup leaders has always been tested in their ability to make good decisions and “predict the unpredictable future.” The current situation of numerous famous startups in Indonesia has risen the notion that there has been a startup bubble in Indonesia and that it has burst. What is interesting is that how can these very competent leaders end up in situations where the causes for many of it cases are related to fundamental principles in growing a business? In the 65th episode, SBM ITB Talks will dive into the concept of startup bubble bursts, the problem with high reliance to funding, the concept of product market fit, and how startup leaders approach the unpredictable climate of fundings and demands.
A Perspective on the Current “Startup Bubble Burst”
Grahadea informs that Startup Bandung, the community, and he himself never really notice the current situation as a bursting bubble as startups have always come and go. The main issue related to many startups doing big layoffs is due to funding. The funding issue often comes from startups investing in growth strategies before the product-market fit was in certain. One of the major principles in growing a startup is to confirm whether the solution or technology was needed by the current market. The issue is not due to leaders unaware of this principle, but due to the climate of developing a new technology or solution that requires rapid adjustments and testings to confirm the ever-changing demands. When startups invest large funds in the market acquisition and growth strategies without the certainty of the product-market fit, they will face difficulties when funds decline in the next period.
The “Proper” Approach to Maximizing Growth and Cutting Cost
Grahadea reminds the concept of “history repeating itself” to inform us that startup leaders need to be aware of the many past cases where chasing growth and aiming for sustainability must be done with respect to the unpredictable climate of funds and demands. When implementing growth strategies, leaders must be aware of the probability that funds may decline. When aiming for sustainability, leaders must explore the possibilities of new opportunities for growth.
Bubbles Can Burst, but There Will Always Be Another
Even though startups have always been exposed to uncertainties, history often repeats itself. Out of the millions of startups that exit their market, there will always be a small group of winners. Many major corporations we see today have come from taking risks and gone through the “startup journey” filled with uncertainties. “Big losses” has always been the risk taken by many great startups that attempted to be the market leader. Be aware of new opportunities and the possibility for loss.