Bankrupt on startup will be coming.
Five macro-economic statuses that you should watch
- Geo-political conflict will keep going
- High Fed interest rate will be steady
- A strong Dollar will be dominating the finance market
- AI hype will create a bubble someday
- Overpaid Salaries in the AI industry create a high burning rate for startup
I think the money game already started in the AI Industry. The winner will take all the profit in the AI market. Invisible war is already going on all over the world. The key thing for startups is that the cost of running a company will keep rising over a longer period under situations of high Fed interest rates and higher inflation due to geo-political conflicts. The current AI industry is supported by Government Subsidy, which comes from US Treasury Bonds. The US Gov will keep printing them to support the future geo-political assets such as AI, Semiconductor, and EV energy transition.
Nothing but Burning Rate and profit...
As you are a startup CEO, you should start to monitor the "Burning Rate" for your startup's future runway. Without a near-term profitable business model, your company will financially be broken shortly. This means there will be a lots of bankrupt in the startup realm such as EV startups are already struggle to survive. Only one who can be profitable will survive in the jungle of inflation war. We are in the middle of a war with many aspects. Startup is warfare. From this period, the Startup CEO should be creative to make your company profitable with a creative mind without relying on VC investments. VC investments are not your savior for your company. It is debt to pay back to them by growing company valuation. Without making a startup profitable, your valuation of a startup will not grow over the period. I already see the news that startup is already bankrupt in some regional area. This can be your startup. who knows? right? Only solution to be survived in the jungle of startup war is to make it profitable in your business model and then keep growing.
