Merge Webinar: Optimizing your startup team during a downturn

Just a few days ago, our CEO Pavel Tseluyko hosted a webinar on what we think is one of the most critical topics in today’s realities - how to still make your business come out on top as a startup owner or a leader (an executive role) even in such distressing times as downturn or recession.

The following is a brief overview of what was discussed during the webinar. And we, of course, invite you to watch the full recording - you'll find it incredibly insightful, we promise:

On-demand Webinar

Optimizing your startup team during a downturn: come out on top by taking action today

Are we now in a recession, and what does it mean for startups?

For the last nine months, since the beginning of the russia-inflicted war in our homeland, Ukraine, a real economic downturn has been happening everywhere in all sorts of business environments. Unfortunately, the global recession disrupted the supply chains in and between nearly all countries, leading to even more crippling inflation.

The recession is pretty much palpable if we look at the numerous major economic and market data like GTP, CPI, or the state of the Stock Market. Overall, now are indeed challenging times for different types of startups, even those with more substantial funding.

The negatives include obvious difficulties when it comes to raising more money and establishing new deals. This is understandable - people are just being cautious, given the current market conditions. Also, uncertainty is probably the biggest anxiety-inducing factor in this case.

But it is not a sign to give up. We must ask ourselves - what can we do to mitigate the crisis and even come out on top? Let’s look at the positives now. You learn how to be more frugal and practical, figure out how to negotiate better, hire better talents, and overall look for new possibilities.

What to focus on during a downturn

Believe it or not, downturns are quite natural. We have survived a few of them already during only the Internet era. There’s more to come, so we better be prepared.

Your primary focus during downturns will mainly revolve around action, optimization, and, most importantly, your greatest asset - your team. Let’s look more closely at what specific crisis-mitigating and company-growing measures you should prioritize right now.

Keep doing stuff

To keep your business running as smoothly as possible, you must have realistic plans for all sorts of situations. Have a clear set of actions for whenever something happens either inside your company or in the outside world, be that a positive event or a negative one.

In fact, planning something fairly neutral, like your spending or team structure, might be a better option since you can’t really foresee all the events, especially those that, in the stock market, are called a black swan event - an unpredictable crash with severe consequences.

Focus on staying afloat and do not quit no matter what happens, even though sometimes the temptation to do that can be very prominent in your business’ everyday struggles.

Why being a people-first will save your ass

Focusing on your own team first and foremost will help you get the best results possible in a precarious situation without spending much. Before focusing only on yourself, remember that hard times affect everyone - your team, before all else. You might notice a downgrade in creativity and efficiency.

How to manage your team during the downturn:

  • Use an output-oriented approach to extend ownership in the team.
  • Back each other up in your crew.
  • Give everyone direction and check up on status.
  • Prove your words with actions. Celebrate small wins. Move with baby steps.
  • Motivate every team member to operate at their personal best.

Optimize things!

In startups, internal processes and how you operate can often be overlooked because of how much we usually focus on growth. First, measure spending efficiency and calculate the Return on Investment (ROI) of every dollar you spend.
The following optimization focus must be your company’s internal processes, along with cooperation. Automate as much as possible.

And finally, you should optimize communication between your teams. Being more in sync will help you successfully overcome blockers and might free up additional hours that you can spend on your product. Do a regular check-up of your priorities and make them line up.

Design Culture and Design Thinking

Design thinking is a framework that helps the team push past the normal business boundaries and think of unique ways to approach a problem. It allows non-designers to hop on and understand the designer’s user-specific goals. It goes like this: Empathise -> Define -> Ideate -> Prototype -> Test.

Design thinking approach
Design thinking approach

Design-driven approach is the core of Design culture - a unique work environment deeply rooted in design thinking principles with a high priority placed on the user experience. An organization with a strong design culture focuses on creating experiences that add value to their users’ lives and improve the product.

Overheads and how they impact your team costs

Another thing you should bear in mind during the scaling of your team is overheads - the costs related to the everyday running of your startup.

Hiring an employee will also result in additional costs such as hiring, equipment, salary, bonuses, etc., while the contractor costs usually stay the same.

How to calculate team costs

Get access to the team cost calculator in our completely free Notion framework.

 Team cost calculator as a part How to scale your design team framework
Team cost calculator as a part How to scale your design team framework

Which actions do other startups take with fundraising?

Speaking of the actual experience of founders this year and their feelings about 2023, the opinions and actions are quite polarising. Fundraising is met with a significantly lower valuation than it was last year. Cost efficiency is now a must for Series A/B/C startups.

Ones who didn’t find a product market fit and fired their whole product team have kept only their core team. We must say though that this is not the best choice for the product. Others are shutting down their business and looking for jobs as well.

On the contrary, sturdy businesses that entered the downturn in good shape are using it as an opportunity to grow and prove themselves even more on the market. Moreover, some startups are struggling with black swans in their domains – crypto, for example, is the most obvious in this domain.

Why you might want to work with an agency instead of scaling your design team

In some cases, to increase efficiency and alleviate some of the struggles that come with scaling on your own, it might be better to work with an agency.

The benefits include, but are not limited to:

  • A more straightforward process of finding suitable candidates;
  • Needed expertise at the palm of your hand;
  • Less expensive compared to managing your own internal team;
  • Product audit.

For more tips on scaling during a downturn, you should watch the whole webinar - there are many more exciting insights for you there. This is just an overview. And for an even fuller picture, we can also offer you a freebie - a super helpful framework in Notion we mentioned earlier that will assist you even more with the scaling of your own design team.

Serhii Hyliuk

Head of Growth

Head of Growth and Customer Success. I'm interested in design, new tech, fashion, exploring new places and languages. My mission is to make our clients happy.

Head of Growth and Customer Success. I'm interested in design, new tech, fashion, exploring new places and languages. My mission is to make our clients happy.

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