Your Startup Versus the Economy
Last month was the first month ever in which my project to help startups, Teaching Startup, saw a noticeable spike in subscription cancellations.
We’ve always had dropouts, so to speak, in dribs and drabs starting in December 2020, our seventh month of operation. But in September of 2022 we had a 5x spike in cancellations. That sounds like a lot more than it is, because the baseline number of cancellations was always tiny. And while net new subscriptions still far outpace cancellations, I’d be an idiot if I didn’t put two and two together.
Activity is slowing down. Furthermore, on the little form that asks why the member is canceling, the majority of the responses, almost all of them, were either along the lines of “putting my startup on hold” or “can no longer afford it.”
It’s 10 bucks a month(!) — meant to be extremely affordable in an area where affordability is never affordable. And while some of my members are in places around the globe where 10 bucks a month is a big deal, the vast majority of them are not.
So is startup activity slowing down?
Correlation Without Causation
Meh. It would also be suspect if I concluded that a slowdown in my passion project to change the way startups get advice was an indicator of a slowdown in general startup activity. Maybe I’m just off my execution game. I don’t have enough checks and balances in place yet to keep me from going all Gary Vee.
But a slowdown in startup is something I indeed feel in my gut, and anecdotally I’m seeing signs of it — whether it’s in a wave of LinkedIn title changes of founders taking regular jobs or off-the-cuff comments from my investor friends about a new softness at the top of the deal flow funnel. But they’ll also tell you that deal flow itself is still robust.
Who knows? I mean, if my business funnel was starting to soften I wouldn’t go telling you about it in a public blog post. Right?
Jamie Dimon says a recession is coming in 6 to 9 months. Bank of America says prepare to lose hundreds of thousands of jobs a month.