It’s hard not to see the world through shit-colored glasses right now.

Mortgage rates are racing back to historic highs; growth-stage venture is brutal; early-stage venture is all over the place; consumers are tightening their belts; startups are laying off employees left and right… what is a founder to do in these conditions?

Breathe. Focus. Execute.

(Or as Jocko Willink, author of Extreme Ownership: How U.S. Navy SEALs Lead and Win says, “Relax. Look around. Make a call.”)

My take on the current market is very contrarian. Surprisingly, I’m optimistic (yet still brutally realistic because that’s how I roll). I’m staying focused on knowledge that great things emerge from terrible markets.

It’s true that founders who haven’t been bloodied and bruised before are taking hits to the chin and don’t know how to respond. While it stings, I’m a firm believer that the best founders go through hell at least once, and I respect those pushing through. More on this later.

It’s true that the gluttonous years of overvalued startups with zero traction gobbling venture capital are over. Thank God.

It’s also true that markets with few distractions allow the best builders to create wonderful things (while simultaneously pushing out those who just wanted to shill an idea, get their bag, and GTFO). My stance on this is clear:

Evan Stewart @heyecs

2020: “we’re a community-based startup” 2021: “we’re a web3 startup” 2022: “we’re an AI startup” Fads come and go, but everyone can tell when a founder is just trying to grab a bag vs. actually build an enduring venture. Bullish on those who care about lasting value > fads.

10:22 PM ∙ Sep 23, 2022

My two cents: stop listening to the motivational gurus preaching platitudinal “when the tide goes out” Warren Buffet quotes, and start looking behind the curtain.

Dig into data. What else is causing the turbulence behind that startup that just laid off 20% of their workforce? What are the traits, principles, and execution strategies of companies thriving in this down market? What data can we rely on to build better businesses through 2022 and beyond?

Answering those questions will do more for you than reading another depressing headline and thinking, “I hope that doesn’t happen to my startup.”

For your sake, I hope it doesn’t either.

Notably, I’m incredibly empathetic toward anyone building a company, especially in these conditions. I never wish ill on any founder or company, and I absolutely respect those who have tried and failed, over those who never even try.

Yet even still, it’s important to remain hyper-focused on reality: down markets are not the sole reason so many startups are dying. Financial mismanagement and wasteful policies, failure to find PMF (or finding false PMF), and lack of focus on metrics that matter have all played a role.

(It’s true that, in markets like this one, many fantastic founders, teams, and products fail strictly because of market conditions and not from self-inflicted wounds. For the purposes of this post, I’m not referring to those companies.)

In today’s member-edition of my newsletter, we take a candid look at these points, with the goal of not becoming another startup statistic. Consider upgrading if you want to read more.

Let’s dig in. ↓