What got you here won't get you there. It's time to learn how to do more with less.

Although recent rate hikes have spooked some investors (and growth+ stage tech companies have gotten crushed), they're unlikely to impact early-stage financing for at least a few years.

Hopefully, that relieves some anxiety for early-stage founders who think equity financing is the right path.

However, it also means that later-stage investors (including public market participants) will be less tolerant of traditional tech 10x+ P/E valuations commanded by startups that aren't purely technology companies. As a result, the era of VC-backed "tech-enabled" services businesses is waning.

It's the end of a 14-year run that began with Uber, was fueled by infinite QE post-2008, and reached its peak sometime around the unsuccessful WeWork IPO.

Although there's a lot of "dry powder" ready to be deployed, earlier-stage investors may be hesitant to invest in your startup if your DCF model disappears off into the horizon; it will be difficult for them to convince fund GPs at higher rungs of the equity financing ladder to purchase shares at the requisite price.

This is something that I didn't fully appreciate before diving headfirst into the startup world: Although, yes, professional investors will always care about fundamental company quality, when they listen to your pitch, they're also trying to calculate the odds that they'll be able to sell what you're selling to their prospects (Series A to B, B to C, etc.) and quickly.

In the years ahead, the bars for each successive round of startup financing will be higher than at any time in the last decade.

In parallel, customer acquisition costs will continue to rise thanks to Apple's war with Meta, which has put upward pressure on ROAS (return on ad spend) hurdle rates.

As a result, the startups that survive will be the ones that generate more profit, sooner.

Practically, entrepreneurs must figure out how to do more with less. More profit with less capital. More effective campaigns with less marketing spend. More value delivered to customers in fewer product release cycles.

To survive (and thrive), founders will need to make deeper, narrower, more precise bets. And the kind of decision-making that works in this more resource-constrained environment necessitates a rigorous approach to strategy and company management that gets teams hyper-focused, aligned, and free of the distractions that were more tolerable when money was cheap.

Cash will always be king. But financing will no longer eclipse operations.

The 0% interest rate reign is over.

What should you do about it?

Get focused. Take strategy seriously. Set ambitious LTV/CAC goals. Don't abandon your grand vision, BUT make contact with reality as soon (and as often) as you can.

Don't count on getting VC financing if your offering isn't a good fit (i.e., pure tech) or before you're ready.

And once you do start raising (pre-seed, seed, A), consider proactively implementing a goal-setting framework like OKRs before you realize you need it.

Otherwise, you'll spend months (and a good chunk of your investors' money) learning the hard way that the approach that got you from 0 to 1 doesn't work as well at the next level of the game.

You can read about how OKRs can fit into your existing startup journey here.

And if you're serious about using OKRs to get stuff done but first want some expert advice, I'm always available for a free consult.