I think the majority People would agree that 2023 was a challenging time to be a startup. There were many layoffs as companies struggled to transition from growth to profitability. Meanwhile, sales cycles were longer and many startups were struggling to grow at a decent pace.
As we begin to see the economic signs improve a little with inflation decreasinghe cost of money falling and most currency headwinds easing, you would think that 2024 could be shaping up to be a better year.
Not necessarily.
We are in a new era, where money will not flow as freely and, according to the experts we spoke to, we will not see a recovery again anytime soon. This means that startups that are not well capitalized right now could still struggle in 2024, and the change in calendar is not going to change that.
What does all this mean for startups entering 2024? It means they have to prove themselves more than ever. It means they need enough cash to handle long sales cycles. It means they have to fight for their share of corporate budgets and 2024 could possibly look a lot like 2023.
The budget outlook
A good starting point for budget discussions is what the proposed budget looks like. Analyst firms such as IDC and Gartner predict IT spending each year, although they typically adjust throughout the year as reality becomes clear.
IDC predicts growth of 6.8%, up from 5% last year. This figure looks at hardware, software and services, but excludes any telecommunications spending. Meanwhile, Gartner predicts a little more, 8.2%.
The overall upward trend has to be good news for startups, who are looking for enterprise buyers to boost their businesses. But John-David Lovelock, a Gartner analyst who analyzes IT budgets, says that while 2023 was a year of increased efficiency, that doesn't mean it ends with the new year.