Growth Tips & Recession Readiness Stats from 200+ Boston Startups

Earlier in May, Venture Lane partnered with Underscore VC, Bostinno, Techstars Boston, and First Republic Bank to survey the early-stage (seed to series A) startup community in Boston regarding their recession readiness.

Results were fascinating. We chatted about growth tips & metrics for surviving a downturn & reclaiming growth with three Boston-based experts: Clement Cazalot, Sarah Hodges, and Jay Batson.

Demographics about the Participating Startups

Before we share a sneak peak of the recession readiness results, let’s chat about demographics. Overall, we heard from 216 Boston-based startups between the seed and series A stage. 100% of the startups have software-powered solutions and 68% operate in the B2B sphere. Additionally, 71% of the startups have a subscription-based revenue model. Because of this, we whittled down the data insights based on the above subset which ended up totaling 106 startups.

The Expert Interpretation

• Clement: If you have under 12+ months of runway, consider looking into ways of preserving runway health besides raising money. Examples: consulting, changing the structure of deals and contracts with clients, and more. Making sure your startup has at least 12 months of runway should be a top priority and may involve creative solutions.
• Jay: Back in 2001, Jay had to make the tough call to cut half of his workforce. It’s important to know when it’s time to pull off the bandaid and make deep cuts in order to preserve runway. Keep in mind that you can always hire back in a handful of months if the situation has improved.
• Sarah: Even if Q1 and Q2 MRR looked postive for the startups surveyed, Q3 and Q4 will likely take a hit across the entire startup ecosystem. It’ll take a while to see the impact and there will likely be a delay before your clients start to feel the pressure to reduce. MRR will start to slope downwards after this.
• Clement: With enterprise SASS subscription startups, there may be a bias in the data regarding changes to MRR. Right now, there’s a strong focus on implementing B2B software and digital tools that increase efficiently and navigate the new landscape.

A Sneak Peak at the Results

• 68% of Boston Startups forecast a return to pre-crisis growth rates in the next 6 months.
• 68% of Boston Startups created 1-3 months of additional runway through cost reduction.
• Only 7% of startups surveyed raised bridge funding within the last 60 days that they had not previously planned on raising.
• Boston Startups identify introducing new product features and providing industry thought leadership as key strategies for retaining current customers through the downturn.

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