How to get culture right from the outset - An interview with Hotbed

What are startups facing in 2023? 

Margaret Anne Coyle and Perdie Alder are co-founders of Hotbed, an online platform that educates, connects and advances startups globally using data, content and community. Coyle shares her thoughts on the current state of startup culture, including what many are looking for advice on and the challenges 2023 is presenting.

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What are startups looking for help and guidance with most right now?

We survey our founders on this weekly and see challenges around closing funding rounds, hiring, closing clients with long sales cycles, and time management. For seed-stage startups with B2B enterprise products, long sales cycles in particular are a massive challenge at the moment as many companies are having their budgets slashed, which slows the sales cycle down. This can make the fundraising process even more challenging. 

We focus so heavily on community because chances are, whatever challenge a startup is facing, another startup has encountered a similar situation and can share how they managed it. Founders are inherently resilient people!

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What unique challenges are startups facing in 2023?

We’re seeing founders who need to raise their Series A facing more challenges than those raising a pre-seed round. The competition and expectations at that stage are dramatically different than they were 12 months ago.

Valuations are certainly lower at Series A than they were in 2021. For pre-seed founders, they're still selling investors on ‘the big vision’ as opposed to revenue, which means they aren’t as heavily impacted by the slower sales cycles. 

While pre-seed rounds tend to depend on angel investors, we’re still seeing lots of activity in these rounds thanks to SEIS/EIS tax benefits, which is great! It may take longer to close the rounds, but capital is still out there for founders.

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What should founders consider in the early days to ensure their culture is maintained as the business grows?

At the start, founders are laser-focused on early traction, fundraising, and finding their first hires so the culture at this stage is determined by the founders’ values, work ethic and their personalities. Culture at this stage is usually an afterthought – as they scale, it quickly becomes apparent if this is going to be an asset or a potential liability for the company. We always hear from exited founders that they wish they’d have focused on intentionally creating culture earlier.

It’s incredibly important that founders are able to sell an inspiring vision to the employees so everyone feels they're on a mission together. It’s the founders job to inspire and motivate the team, and as founders are super busy, it’s easy to overlook the need to put intentional effort into communicating this to the team. We’ve seen an increase in early-stage teams preferring to work in-person rather than at-home for this reason.

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This interview was conducted as part of the 'ways of working' interviews with Techspace members exclusively for The Scaleup Culture Report 2023.

Get your copy of the report by Techspace here > https://www.techspace.co/scaleup-report

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