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Wed 15 May 2024
Why Was 2023 So Hard for Start-Ups? How To Make 2024 Better?
The year 2023 was characterized by a challenging economic and business climate, influenced by the lingering effects of global events...



The year 2023 was characterized by a challenging economic and business climate, influenced by the lingering effects of global events, geopolitical unrest, supply chain issues and inflationary pressures. Amidst this backdrop, start-ups faced an array of unique challenges that tested their resilience and adaptability. Despite these hurdles, the outlook for 2024 holds potential for growth and recovery. As global inflation rates are expected to moderate, with projections indicating a decline from 8.7% in 2022 to 6.9% in 2023 and a continued decrease into 2024, start-ups have an opportunity to leverage strategic adjustments for a stronger year ahead. This article will explore the adversities encountered by start-ups in 2023 and propose actionable strategies to harness opportunities in 2024, highlighting that, with adaptability and strategic planning, start-ups can navigate through economic uncertainties and thrive in the evolving business landscape.


Challenges Faced by Start-ups in 2023


The economic terrain of 2023 posed significant hurdles for start-ups, with global and local downturns leading the charge. The ripple effects of inflation and subsequent interest rate hikes severely impacted start-up operations and their access to vital funding. The venture capital and angel investment spheres saw a notable contraction, with venture capital investment dropping to its lowest level in five years. This sharp decline, amounting to a 38% drop from $462 billion in 2022 to $285 billion, reflected a cautious and selective approach from investors. Early-stage funding suffered a reduction of over 40%, late-stage funding dipped by 37% and seed funding saw a decrease of just over 30%.


Amidst this tightened funding landscape, Jude Pereira, Managing Director at Nanjgel Group, UK, offered insights during a recent Global Investment Leaders Club (G.I.L.C.) gathering that captured the essence of the year’s challenges. In his words, “2023 emerged as a year of unexpected disruptions. Our anticipation and strategies for the year were quickly overshadowed by unforeseen global events. While it’s easy to attribute these shifts to singular events, such as geopolitical tensions, they underscore the importance of flexibility in planning. The year taught us the value of having a contingency plan, emphasizing that strategic foresight must account for the unpredictable nature of global markets.


The increase in the number of start-ups, coupled with this financial crunch, intensified competition and made it increasingly difficult to stand out in saturated markets. Founders faced the dual challenge of securing funding in a cautious investment climate while also differentiating their products and services. This backdrop of economic strain and competitive pressure highlighted the need for start-ups to adapt swiftly and innovate continuously to navigate these complexities successfully.


Lessons Learned from 2023


The experiences from last year have been instructive for start-ups, highlighting the paramount importance of financial resilience and savvy management. It became clear that adaptability in business models and strategies is crucial in the face of economic volatility. Additionally, possessing a strong, unique value proposition has proven essential in standing out within a competitive market.


Jon Bennion Pedley, CEO of Investment Owl in Uganda, shared insights from the year’s setbacks during a discussion at a recent G.I.L.C. Forum: “Straying from proven strategies led to losses, teaching us the value of adherence to our core principles. While 2024 might challenge our balance sheets, the foundations we’re establishing promise a brighter future,” he remarked. This reflection emphasizes the balance between managing current financial challenges and investing in future growth.


The Financial Health Network’s 2023 report highlighted the critical need for financial resilience, notably the lack of emergency savings among many Americans. Start-ups like Alice, a fintech company that helps employees increase their take-home pay through pre-tax spending automation for commuting, embody innovative responses to such challenges. These initiatives not only offer immediate financial benefits but also contribute to broader financial stability. These lessons, emphasizing financial prudence, flexibility and distinct value, serve as guiding principles for start-ups navigating future uncertainties. They underscore the need for a balanced approach that addresses immediate financial pressures while laying the groundwork for sustainable growth and differentiation in the market.


Strategies for a Better 2024


As we turn the page from the challenges of 2023, it’s crucial for start-ups to strategize for a more prosperous year ahead. Learning from the past year’s hurdles, 2024 presents an opportunity for start-ups to refine their approaches, emphasizing resilience, innovation and strategic foresight. Central to this endeavor is the adoption of key strategies that can steer start-ups towards stability and growth. This section delves into these strategies, drawing insights from seasoned investors on how to navigate the evolving business landscape effectively.


  1. Embracing Financial Prudence


In the quest for a more prosperous 2024, financial prudence emerges as a critical strategy for start-ups. This approach focuses on the meticulous management of cash flow and the exploration of diverse funding avenues, transcending the traditional reliance on venture capital. Anthony Jarrin, CEO of The Cannaregio Group in the US, emphasizes the importance of foundational business elements—product development and team composition—over the frantic race for funding rounds. Speaking at a Global Investment Leaders Club (G.I.L.C) gathering, Anthony shared, “In their rush to scale, many start-ups prematurely dilute their equity, overlooking the crucial steps of company building and team assembly. This misstep can stunt long-term growth and devalue the essence of the start-up’s mission.


This highlights the necessity for start-ups to balance the urgency of growth with the discipline of strategic planning. Effective cash flow management, prioritized by finance teams as a top focus in 2023, is indispensable for maintaining operational stability and fostering growth potential. Additionally, diversifying funding sources introduces start-ups to a broader spectrum of financial opportunities, mitigating the risks associated with over-reliance on a single funding type. By embedding financial prudence into their operational DNA, start-ups can avoid the pitfalls of rapid dilution while building a resilient business model. This approach not only ensures a solid foundation of product excellence and team synergy but also positions start-ups for sustainable development and expansion. 


  1. Focusing on Core Competencies and Innovation


The year 2024 is poised to continue presenting challenges for start-ups, making it imperative to focus on core competencies and innovation to stand out and gain a competitive advantage. John Bennion Pedley, CEO of Investment Owl in Uganda, shares a perspective that finds promise in these challenges. He states, “While 2024 presents its own set of challenges, it also opens the door to unique opportunities. It’s a time when we can expect to encounter exciting companies emerging with realistic valuations, signaling a ripe environment for innovation-driven start-ups.”


This optimistic outlook highlights the potential for start-ups to differentiate themselves through a strong emphasis on their unique value proposition and by investing in research and development (R&D). According to Bain & Company, R&D investment is projected to grow at a 10% compound annual growth rate through 2026, particularly in digital engineering. This trend underscores the critical role of innovation in securing and expanding a company’s position in the marketplace.


For start-ups, the path forward involves a deep dive into their inherent strengths, leveraging these to develop unique solutions that address market needs. Allocating resources towards R&D is essential, not just for staying abreast of current trends but for setting the pace for future industry directions. By doing so, start-ups position themselves for substantial growth, underpinned by a commitment to innovation and a profound grasp of their distinctive value to the market.


  1. Expanding Market Reach Strategically


Strategic market expansion is essential for start-ups aiming to capitalize on new opportunities and drive growth in 2024Martin Fritsch, Group Chief Financial Officer at VFS Global in the UAE, expresses confidence in the year ahead: “My outlook for 2024 is decidedly positive. I believe that with the anticipated easing of interest rates, we’re poised for a significant upturn.” This sentiment underscores the potential benefits that more favorable economic conditions could offer for start-ups ready to strategically broaden their market presence.


The pivot to digital marketing and social media stands out as a vital strategy for identifying and engaging with new markets and niches. These platforms have become indispensable tools for start-ups, offering cost-effective means to reach and interact with a global audience, tailor marketing efforts with precision and gain valuable insights through advanced analytics. The agility and efficiency provided by digital channels enable start-ups to swiftly explore new markets, adapt their strategies based on real-time feedback and optimize their outreach for maximum impact. Leveraging digital marketing and social media, start-ups can significantly enhance their visibility, engage more deeply with customers worldwide and build robust brand loyalty—all while managing marketing expenses judiciously. This strategic approach to market expansion not only opens new avenues for growth but also solidifies the start-up’s position in a competitive and ever-evolving business environment.




The year 2023 presented a myriad of challenges for start-ups, from economic downturns and funding difficulties to intense market competition. However, the lessons learned and strategies outlined for 2024—emphasizing financial prudence, core competencies, innovation, and strategic market expansion—offer a blueprint for overcoming these hurdles. Start-ups are encouraged to remain resilient, continue innovating, and stay adaptable in the face of adversity. As we look ahead, the potential for start-ups to not only survive but also thrive in 2024 is significant. By adhering to these strategic insights and maintaining a focus on flexibility, creativity, and strategic growth, start-ups can navigate the complexities of the business landscape and seize the opportunities that lie ahead. For those seeking to amplify their journey, engaging in fundraising opportunities and investor meetings at the Global Investment Leaders Club becomes pivotal, where networking with seasoned investors and presenting innovative ideas at our secure gatherings can unlock new fundraising opportunities and boost your project’s growth.

Participants mentioned in the article
Jude Pereira
Managing Director
Nanjgel Group
G.I.L.C. Monthly Chronicles
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