Startups must optimize their technical infrastructure to gain a competitive advantage

Thanks to recent successful fundraising, many start-ups have enough financial resources for a difficult winter of 2022-23. But this hides complex mechanisms.

Fundraising for 2023 continued to increase due to the pool of capital available from investors. However, start-ups are not calm.

This is a classic situation in the field of supply and demand: funds are available in spades, but start-ups worry about operating costs due to rising inflation. Your customers face the same problems and are looking to cut corners to gain some form of financial stability.

As the next round of fundraising approaches, startups need to prepare now to get a good valuation that reflects their continued growth and future success.

Benefiting from several options makes it possible to invert the dynamics of supply and demand. This is the most obvious and effective position possible to improve a start-up’s prospects during a fundraising. All startups dream of having VCs chasing them, but that scenario is too rare for them to really count on it. For a post-Series A start-up to be in the best position in its next round of funding, it must prove its growth potential and demonstrate consistent profitability. That’s why mature startups focus on the following three areas of business development: sales, marketing, and product. Investing in these three areas is a guarantee of success.

Unfortunately, in a complex economic and geopolitical context, this approach is not enough either. Indeed, to hope to turn this supply and demand dynamic in their favor, startups must now maximize their value proposition. This will allow them to raise their prices and ideally increase their margins, while providing a compelling reason to retain existing customers and attract new ones. Although viable, this solution still poses a new puzzle: how a start-up can increase the value of its product or service, maintaining an important leeway, facing a price increase, and tightening its belt to, in some cases , , survive? Where can they find the resources to not only maintain their business, but to reinvest in it to grow it?

Cloud-based startups must turn to their technical infrastructure to save money. For those using cloud service providers, the question of technical infrastructure depends on operational costs (which will increase as the startup consumes resources). Startups must therefore find a balance between optimized costs and a robust infrastructure that guarantees good product performance for their customers.

Fortunately, the cloud industry has already recognized the need for cost optimization and offers many solutions in this direction. To optimize your cloud infrastructure, features like autoscaling with Kubernetes can not only automatically manage sudden traffic spikes, but also disable features when fewer customers are online, which helps to reduce your cloud bill. A completely different solution is called HashiCorp Terraform. The latter, of the “infrastructure-as-code” type, automates infrastructure management, freeing cloud customers from manual management. HashiCorp Terraform also verifies that resources are properly distributed across production, development, and test environments. If a startup overprovisions certain resources, it needs to check and adjust its metrics. She will also need to control her inventory, as excess inventory can cause unnecessary costs. Improving the data lifecycle is also key to optimizing costs.

In addition to architectural optimizations, startups should also look to their ecosystem if they want support. International cloud computing service providers are famous for offering “cloud credits” to startup companies to host their infrastructure. But when that cost isn’t a concern, neither is optimization. If cloud credits simplify a startup’s life, they don’t necessarily guarantee its long-term success. When credits expire, startups often find themselves paying for expensive cloud architectures that are not suited to their needs.

So how can cloud infrastructure providers support startup growth, regardless of the market environment? Innovative programs already exist that select start-ups and provide them with technical and financial support. The objective is to provide start-ups with the means to reinvest in their businesses, improve their value proposition and thus obtain a competitive advantage. That’s the kind of meaningful support the startup ecosystem needs to emerge stronger from a harsh financial winter.

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