Venture capitalists are canceling meetings. Costs are soaring due to inflation. And many experts are predicting a looming recession.
But for these early-stage startup founders, there are reasons to be optimistic, despite the ongoing economic downturn.
That was the our takeaway after meeting with the 12 startups in the 14th cohort of Techstars Seattle last week at the University of Washington’s Startup Hall.
“In every downturn, there are huge opportunities for startups and for innovation to happen,” said Adam Baker, founder of dealpad, a software sales platform startup participating in the latest cohort. “People start to become a lot more resourceful in how they go about working and running their companies and trying to be successful.”
The founders come from a wide range of industries, including AR, agriculture, insurance, health, enterprise software and community building. Keep reading below to learn more about the founders’ view on the current economic conditions and what they say is their secret sauce.
The pitch: A low-code app developer that integrates AI and ML.
On the economy: “There is still a lot of demand for such use cases,” Singh said. “So I think as long as our metrics stay strong, we will be okay. We will be able to navigate out of this downturn.”
The secret sauce: “I think the secret sauce is recognizing what is the actual problem people face when they’re building end-to-end applications,” he added. “Basically realizing what actual customer needs are.”
The pitch: A software sales platform that enables two-way collaboration between buyers and sellers.
On the economy: “We’re talking about moving into a recession,” Baker said. “But I see that as opportunity for everybody.”
The secret sauce: “We enable sales teams to build really collaborative partnerships and two-way buying processes with their buyers,” he added. “So rather than pushing a one-way sales process, or waiting for the buyer to run their process, you’re actually partnering on that sales process. And it’s a game changer.”
Founder: Hannah Brannan
The pitch: A marketplace that connects flower shoppers with local farmers.
On the economy: “We knew that the odds would be against us to be able to find great capitalization for an idea, which was something that really speaks to sustainability and traceability. And also, I’m a female founder. So we know that the odds were against us already… We’re not scared of low odds, we actually really like the pressure on us to really iterate faster, find better fit to our customers and really push toward something that serves users really well today.”
The secret sauce: “We believe the florist when they tell us that local farms produce the best flowers and we fight really hard, using automation and streamlining data and organization to be able to do anything that gets those flowers into florists hands. So believing the florist that what they want is the real thing and then using software to make it happen.”
The pitch: A mobile app that connects to a user’s rowing machine for immersive training and racing.
On the economy: “In our industry, what’s really interesting is the emergence of hybrid fitness,” Catherine Humblet said. “You saw people working out from home during COVID. And seeing all of the benefits. And now some of them are returning back to the gym. But they’ve had that taste of what it’s like to have the flexibility of home work similar to what’s happening in the working environment in the office, like doing a hybrid mix of office and home. So for us, our solution is portable, which means that they can take us anywhere.”
The secret sauce: “We’re trying to take a really playful approach to sport,” she added. “If you look at a lot of the fitness companies, they’re all about being competitive and winning. There are a lot of people out there for whom winning is not their primary motivation. They’re in it to lose weight, or they’re in it to just be active and to age well. And so we’re taking a really, really playful approach to sport and just making it a place where people want to be without any pressure.”
The pitch: Provides real-time pet care recommendations through an AI chatbot.
On the economy: “The economy right now is, in my opinion, great for pre-seed and seed founders that search to raise these types of rounds,” Schonberger said. “And it’s just getting better because everyone wants to take a better and bigger chunk of the pie when they can when the valuations are much lower.”
The secret sauce: “We have a team of pet lovers. We have a woman founder, and she’s great. And she’s the top researcher I’ve ever seen in my life. She’s like an AI algorithm, but in a human being. And I’m a techie with 10 years of experience, with AI expertise.”
The pitch: An XR software provider that works with off-the-shelf VR headsets.
On the economy: “I believe the market is doing the right steps in order to straighten into a logical path,” Dalali said. “And as a company, we try to get much more traction, much more sales in order to make our business affordable for VCs and for investors.”
The secret sauce: “There are no direct competitors for this concept,” he added. “There are a couple of companies trying to solve the same problem but without presenting any breakthroughs. We’re bringing a uniqueness in the visual connectivity in our distributed architecture in order to solve these problems.”
Founder: Laura Crain
The pitch: A digital community of women going through menopause.
On the economy: “Menopause is definitely on the verge of having more attention and having more focus because fertility has been a long-time focus for female health,” Crain said. “So we are just trying to take advantage of more and more of that growing attention on this big market, and just driving awareness.”
The secret sauce: “It’s very much an underserved market,” she said. “Our secret sauce is really focusing on the community.”
The pitch: A text messaging service for creators to engage with fans.
On the economy: “The number one thing for us is just keeping costs as low as possible,” John said. “Extend our runway as far as we can. And really just emphasizing getting traction and getting good metrics.”
The secret sauce: “Moving as fast as possible,” said John, who launched a robotics company when he was 16 years old and dropped out of the University of Washington as a freshman. “We’ve shipped four products in the last six months, so we’re able to ship products and learn really quickly.”
The pitch: Streamlines medical quality assurance procedures by digitizing and automating the process.
On the economy: “Pharma is just one of those industries where inflation doesn’t have a big impact because people still need to take medicine,” Luong said. “There’s still demand.”
The secret sauce: “We understand the pharma industry with over 10 years of experience in it,” he added. “And then we deeply understand how to implement it in a very regulated FDA environment.”
The pitch: A knowledge discovery and navigation platform for lawyers.
On the economy: “Some of our favorite companies were founded in economic downturns,” Saltman said. “We are learning as much as we can and adjusting our strategies to adapt to uncertain conditions. But we also see an opportunity, both to help our customers maximize revenue and to grow sustainably, which will position us well to scale.”
The secret sauce: “Our secret sauce is our team,” Saltman added. “I have deep industry knowledge and great leadership skills from years of leading teams at the Justice Department. Joell, our CPO, and Stephen, our CTO, have successfully designed, built, and launched data-focused products in the healthcare industry, which presents a lot of similar challenges to our target market of law. With such a well-rounded combination of talents and experiences, we can do a lot with a lean team and move fast.”
The pitch: An Uber-like marketplace for tow truck operators and drivers to connect to towing and other auto repair services.
On the economy: “For every downturn there is an uptrend,” Khan said. “We think that we are very well suited to basically ride this out as long as possible.”
The secret sauce: “We are coming into an industry severely in need of disruption,” Khan added. “AAA is a 130-year-old company. And the last thing you want to deal with is a dinosaur.”
The pitch: Sells a small piece of hardware that “unlocks” mobile apps to wean users off digital distractions.
On the economy: “We’re really solving a problem that’s growing year-over-year,” Smits said. “People are getting more addicted through social media and smart forensic technology in general. So I do see a big market opportunity there. That’s valuable, even though the market is low at the moment.”
The secret sauce: “The unique thing about Unpluq is that we have physical tech, which is helping people to change their actual habits,” Smits added. “A lot of the other solutions like Apple’s Screen Time, they don’t really solve the problem in the long run because they only help you to create a short block, but you can easily pass around that.”