May 10, 2016
When most people think of startup culture, they see the perks. They see the catered meals, the ping pong tables. But what happens when the fun times come to an end and startups are now scrambling to find a way to brace for the worst-case scenario.
How do we promote financial responsibility in startup culture?
In an article on Business Insider, it was reported that Dropbox was cutting a few of its perks (including its free shuttle service and gym washing service) in favor of profitability. As Business Insider reports, cutting the employee perks will save the company about $38 million a year.
Dropbox isn’t the only high-profile startup to unleash a company-wide cost-cutting campaign lately. A number of unicorn startups, worth over $1 billion, including Evernote, Jawbone, and Tango, have all gone through some form of cost cuts, whether layoffs, office closures, or reduced employee perks…. A lot of this has to do with the slowing venture-funding environment in Silicon Valley. Investors have become much more conservative with their money lately, and are losing patience for startups that have failed to generate returns after years of free spending.
As the fresh appeal of startup unicorn culture fades, companies are beginning to think of longevity and long-term success. And whether we’d like to admit it or not, finances play a huge role in that. How revenue and capital are generated for companies, and how they spend that income will often determine how long they stay around for the public to enjoy. It goes beyond just having financial literacy – it’s about understanding how finances impact the longevity of your business.
Understanding the role that finances play in maintaining the longevity of your startup can help even the most experienced entrepreneur.
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