In times of crisis, fintech startups should take the long view instead of sleeping • TechCrunch

The fintech industry Not to mention the war in Ukraine, many macroeconomic problems are currently facing the global economy, including inflation, the cost of living, companies downsizing, and a possible recession on the horizon, not to mention the war in Ukraine. All these factors caused fintech M&A exits to decline 30% in Q2 2022, the lowest point since Q3 2020.

This is not the first time the economic climate has deteriorated rapidly. But when we look at the overall performance of the industry, the current decline is not that different compared to previous years. What can founders do to help their companies thrive during this time?

Hiring high performing talent

The worsening financial climate is causing fintech companies to freeze hiring or reduce their workforce to avoid higher costs. The industry saw 1,619 job cuts in May, compared to 440 in the first four months of the year.

Labor losses have also affected Ukraine’s startup ecosystem. More than one in ten startup workers in the country have had to leave their companies since the start of the Russian invasion, and since then the number of enterprises with up to five team members has increased, while companies with large teams are shrinking.

Almost all founders agree that layoffs are a difficult but important decision because payroll costs can be leveraged to grow or maintain a runway. But if you take the long view and get past the current setback, your startup may have a better chance of survival if you hire exceptional talent. And sometimes hiring a new employee brings a fresh perspective that can help you identify problems in your organization.

Ukraine has great talent and thousands of specialists are looking for an interesting project to join. So, when you’re faced with this problem, instead of hitting the nail on the head, consider it an opportunity to strengthen your company with dispersed, high-performing talent.

Build and ensure the quality of your product

Crises are times of opportunity – you need to look carefully to spot the golden egg. Crises give founders an opportunity to focus on building strong products because moments like these often highlight problems that need viable and sustainable solutions, and startups can go downhill in construction instead of focusing on continuous growth.

The brutal truth is that strong markets clear hundreds of startups without a strong product disrupting the market. This gives top companies the opportunity to develop a broader set of products and services.

Develop a strong strategy

To run a business sustainably, founders must manage business development and manage risk well. This is why startups that focus on developing strong business strategies and products in times of crisis often fail to win the market.

I know it’s hard to focus on developing a strategy when there are so many external factors affecting your company. The reality is that companies that focus on strengthening their business plans and strategy are more likely to emerge stronger than those that are dormant.

Individuals and businesses thrive in the face of crises by managing their resources, analyzing their situation, and recognizing potential opportunities regardless of the noise and chaos around them.

Difficult times allow teams with big goals to recharge and see things from a different perspective. For example, you can ask yourself: What is the unique idea of ​​the product? What can we do to make the most of the current market? What can we do to further exploit our product when the market recovers?

Despite all the obstacles, founders can excel in business by following three rules in times of crisis: strengthen your employees, develop a better product, and strengthen your business strategy. While these are not rules or solutions to problems, I have found them to be very effective during difficult times.