I think more People will agree that 2023 was a tough time for a startup. There were a lot of layoffs as companies struggled to transition from growth to profitability. At the same time, sales cycles were longer and many startups were struggling to grow at a suitable pace.
When we start to see the economic signals improve a little bit Inflation calms downthe Cost of money With most currency headwinds subsiding, you might think that 2024 might be a better year.
not necessarily.
We’re in a new era, one in which money won’t flow very freely and, according to the experts we spoke to, we won’t see a rebound again any time soon. This means that startups that are not well-capitalized right now could continue to struggle in 2024, and flipping the calendar won’t change that.
What does this mean for startups entering 2024? This means they have to prove their worth more than ever. This means they need enough cash to get through long sales cycles. This means they will have to fight for a portion of their institutional budgets, and 2024 will likely look a lot like 2023.
Budget forecasts
A good starting point for discussing a budget is what the proposed budget looks like. Analysts like IDC and Gartner forecast IT spending each year, though they generally adjust throughout the year as reality becomes clearer.
IDC expects growth of 6.8%, which is up from 5% last year. This number addresses hardware, software, and services but does not include any telecommunications spending. Meanwhile, Gartner expects a slight increase at 8.2%.
The overall upward trend should be good news for startups, who are looking to institutional buyers to scale up their businesses. But John David Lovelock, a Gartner analyst who looks at IT budgets, says that although 2023 has been a year for increased efficiency, that doesn’t mean that will end with the new year.