In the startup world, everyone loves a bull market. Money flows, valuations skyrocket, and founders feel invincible. The problem? Most don’t plan for what happens next. The reality is that the best companies aren’t just built to thrive in a bull run but designed to survive (and even profit) in a bear market.
The difference between a company that fizzles out when capital dries up, and one that endures lies in how they manage their treasury, squeeze margins, and play the long game.
Learning from the past: Business cycles and survivors
The typical startup playbook suggests that solving a problem and growing with external capital is enough. But if you look at the history of business—whether it’s manufacturing, rubber, commodities, or financial services—the real winners aren’t just problem-solvers. They’re the ones who know how to optimize for both booms and busts.
Take the rubber industry in the early 1900s. During demand surges, rubber manufacturers didn’t just expand—they diversified their supply chains, locked in long-term contracts, and built financial reserves. When prices inevitably crashed, the smart players weren’t scrambling for capital. They had war chests to acquire struggling competitors and ride out the downturns. The same logic applies today, whether you’re running a SaaS company or a Web3 startup.
Yet, many modern startups operate like the bull market will never end. We saw this in 2020-2021, when easy capital led to bloated valuations, aggressive hiring, and reckless spending. Fast forward to the current market, and many of those same companies are slashing costs, laying off employees, and scrambling to stay afloat.
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The businesses that survive aren’t the ones that raised the most money in the bull run—they’re the ones that managed their treasury wisely and built bear-proof strategies.
Maximising treasury in a bull market
Bull markets create an illusion that capital is infinite. Founders get comfortable with high burn rates, assuming they’ll always be able to raise more. But the most successful companies know that bull runs are when you build a financial buffer—not when you ramp up spending uncontrollably. When money is cheap, securing enough capital to sustain operations beyond short-term cycles becomes critical.
Apple, even when flush with cash, issued debt at ultra-low interest rates, ensuring liquidity without touching reserves. The best founders take advantage of favorable conditions to create optionality rather than relying on the assumption that another funding round will always be there.
Beyond securing capital, the smartest companies use bull markets to build diversified revenue streams rather than relying on a single growth channel. Amazon’s decision to invest in AWS instead of funnelling everything into retail proved to be one of the most strategic pivots in tech history. Instead of pouring every dollar into customer acquisition, investing in secondary profit centres can create a cushion when primary revenue streams slow down.
At the same time, keeping hiring disciplined during good times prevents the painful cycles of layoffs when market conditions inevitably tighten. Automation, process efficiency, and conservative financial management should be built in early, not just in response to a crisis.
Squeezing profit margins in a bear cycle
Bear markets, rather than being seen as a time of survival, should be treated as an opportunity. The companies that win in downturns are the ones that look at cost-cutting strategically rather than as a panicked response.
Instead of gutting entire departments, reviewing inefficiencies in software spending, renegotiating vendor contracts, and optimising marketing spend can extend runway without compromising execution. Tesla, during supply chain disruptions, prioritised its highest-margin models, ensuring that even if unit sales dipped, profitability remained intact. Leaner operations don’t have to mean shrinking the business—it means making every dollar work harder.
Pricing power is often overlooked in downturns, but the companies that can retain or increase pricing during tough times have a significant advantage. Salesforce, despite market pressures, raised prices because its software had become too embedded in enterprise workflows to be easily replaced. Companies that focus on delivering irreplaceable value can avoid the race to the bottom that kills so many businesses in downturns.
And while some companies are forced to retreat during bear markets, the strongest players go on offense. JPMorgan’s acquisition of Bear Stearns during the 2008 financial crisis wasn’t just about survival—it was about consolidation and long-term positioning. Acquiring struggling competitors at discounted valuations is a move that pays off when markets rebound.
Also Read: Beyond growth: Why succession planning matters for startups
The startups that truly win aren’t the ones that maximise every bull run or minimise every bear cycle—they’re the ones that build in a way that makes both irrelevant. This means designing businesses that don’t rely on external capital to survive and that have the flexibility to adapt to market conditions. Every founder should assume that at some point, raising capital will be impossible.
Having at least 18-24 months of runway, even without outside funding, should be the goal. Too many startups focus on raising money as their main goal instead of making money. When profitability is prioritised, fundraising becomes an option rather than a necessity.
The long-term mindset: Winning beyond market cycles
The best founders aren’t playing the short-term game of riding market cycles—they’re building businesses that can withstand any environment. Maximising treasury in a bull run and squeezing profit margins in a bear cycle isn’t about reacting to market conditions, but anticipating them.
VC-backed startups and first-time founders can learn a lot from businesses that have been through decades of ups and downs. The key takeaway? Build like the market won’t always be in your favor. Because it won’t be. Those who plan accordingly won’t just survive the next cycle; they’ll come out of it stronger, ready to dominate when the next opportunity arises.
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