How Cockroach Startups To Become The Most-sought After Startup Species In 2023
When nothing else, perhaps the chronology must tell us a bit of what order for most of the startups should be. Not as surprising though that ‘cockroach startups’ are back in catalogue in public discourses and social media crunches, especially in-between the not calculated slowdown in 2022, which looks like continuing far most into 2023.
While far as startup dreams are concerned, everyone wants to become a mythological creature of some description. From centaurs to unicorns, dragons to decacorns, each representing a higher valuation and new levels of success.
As the ability to scale, grow and eventually exit into Newt Scamander’s suitcase underpins all startup dreams, most businesses never get to that stage.
Staying with a global recession coming our way and venture capital (VC) funding drying up during times of uncertainty, the concept of unicorns might have to take a back seat.
So that all, the more immediate problem for businesses during lean times is survival, and here is no better way for startups to navigate a challenging environment than to become a cockroach.
Cockroaches are not the most delightful creatures. The term does represent the never say die attitude, right down to their genetic makeup. Not only can they go a month without food, but they can also survive without a head for an entire week.
A cockroach startup is, henceforth, one that persists during times of adversity and overcomes difficult economic conditions thanks to its unique business model that makes financial sustainability its primary goal from day one.
That means spending less on fixed assets like a prime location office for a small team or burning through cash to sell a product below cost to monopolise the market share.
Many startups are operating within this model and put the monetisation of their product on the backbench. As a matter fact, one could easily rattle off startups that have remained non-profitable despite their high valuation and popularity.
Not with this as a problem during boom times, a dry spell in funding could hit operations hard. And this, is where the cockroach will emerge triumphant against the unicorn.
In informatics, startups can be assured of surviving on very little funding and opt on which ever cash they have on books are investor favourites. These are the very startups that do not need funding to achieve some ‘statuses. As a cockroach startup is sought after by investors, but the startup itself may not make itself available to these investors.
When investors can celebrate cockroach startups, there are also guts that they are missing out on them. That’s not to say that all cockroach startups are bootstrapped in nature. Most of them do raise funds, it’s how they use them that sets them apart.
Reduction Of Expenditure On Fixed Assets: Development of a startup gets money which one needs to avoid. For sample talks, initially, a startup can get a co-working space instead of owning an office and instead of buying laptops for each employee, they can ask employees to bring their laptop to the office.
Business Economics: Most startups that begin well tending to fail at the cost of launching and manufacturing a product, customer acquisition costs, delivery costs, etc. The business needs to get its unit economics right since there is no point in starting a venture without knowing the novelty of the service, product, or availability of funds. A high-funded grocery delivery startup called PepperTap started operation on a negative margin per delivery, where the profits looked inefficient.
Profit Focused: A cockroach startup is not able to hurry for becoming popular in the market by wasting money but increasing focus on revenues and profits.
Best Products Helping In Survival: Cockroach are well established as they are able surviving in toughest conditions by acquiring a real product and service. In usual terms, when a business starts selecting the right direction, founders are forgetting about the product or service and starting to focus on getting funds. While the cockroach startup acquires energy and money which are always spent on the improvement of the product and service.
Most of the cockroaches are existing for decades and these are incredibly well-suited for survival through internal cash accruals, frugal in operations, and promotes micro-management. The VCs are not investing in such profitable businesses and can survive almost in any market condition. It’s all in the heart of business, there is just the need of the soul for the search.