The year 2023 proved to be a difficult time for startups as many struggled with layoffs and transitioning from growth to profitability. Sales cycles were longer, and the overall growth of startups was hindered. However, with inflation easing up and the cost of money dropping, there was hope for a more positive outlook for 2024.
Despite these economic improvements, experts suggest that startups should not expect a rapid bounce-back in the new year. This means that undercapitalized startups may continue to face challenges, and the start of a new year may not bring significant changes to their situations. As a result, startups entering 2024 will need to demonstrate their value and have enough financial resources to withstand longer sales cycles.
In terms of budget outlook, research firms like IDC and Gartner have predicted growth in IT spending for the coming year. IDC forecasts a 6.8% increase in spending, while Gartner’s prediction is slightly higher at 8.2%. This upward trend in spending could potentially benefit startups reliant on enterprise buyers to support their businesses.
John-David Lovelock, a Gartner analyst, emphasizes that despite efforts to improve efficiency in 2023, this will continue to be a priority in the upcoming year. Startups will need to focus on proving their worth and fighting for their share of enterprise budgets to gain traction in 2024.
