SVB Collapses: Software Startups Tremble

In March 2023, the failure of Silicon Valley Bank—the go-to bank for much of the startup and tech ecosystem—was a brutal reminder of how fragile a business can be when it concentrates too much in a single place. Overnight, companies that looked solid discovered that their money, their payroll, and their ability to operate depended on a single point that, when it failed, put everything on pause. It wasn’t a sales problem or a product problem: it was a problem of concentrated risk.

Although the case happened far away and at another scale, the moral lands directly in the reality of small businesses in Mexico. We’re not just talking about banks: we’re talking about suppliers, rented platforms, a single person who knows how everything works, and systems where your data lives in someone else’s hands. When a business depends entirely on something it doesn’t control, it inherits that thing’s fragility. The good news is that this kind of risk can be managed with simple, orderly decisions.

The real lesson: don’t put all your eggs in one basket

The collapse of SVB wasn’t a story of bad luck, but of dependence. And that same dependence shows up in the software companies use every day: a system only the vendor can modify, information trapped in a platform you can’t export from, or processes that live in a single person’s head.

Dependence isn’t bad in itself—you’ll always rely on tools and allies. The problem is blind dependence: when you don’t know what would happen if tomorrow that vendor raises the price, shuts down, or simply stops responding.

A healthy business isn’t one that never fails, but one that knows what to do when something fails.

Where concentrated risk hides in a small business

Often the risk isn’t visible until it’s too late. It’s worth honestly reviewing these points:

• Your data: can you export your customer, sales, and inventory history whenever you want, or is it trapped in a platform you don’t control?
• A single supplier: what would happen to your operation if that system shut down or changed its rules overnight?
• Knowledge in a single person: are key processes documented, or do they depend on a certain team member being available?
• No backups: do you have copies of your information outside the main system, ready to restore?
• Everything manual: how many critical tasks would fall apart if that person is out for a week?

Spotting these points isn’t about sowing fear: it’s about clarity. With that picture in hand, you can decide what to strengthen first.

Custom software: control instead of dependence

This is where a custom-built system makes the difference compared to renting solutions you don’t control. When software is built with your business in mind, you keep your data, your processes, and your history, without being tied to a third party’s rules.

It’s not about reinventing everything or overspending, but about keeping the essentials under your control: information you can export, processes you can adjust, and backups that depend on you. That way, when the environment shakes—as it did with SVB—your operation doesn’t stop, because it rests on foundations you understand and manage.

The goal isn’t total independence, which doesn’t exist, but making decisions with reliable information and reducing the single points of failure that can cost you dearly.

Spread your risk, starting today

You don’t need to solve everything at once. The recommended approach is to start with something small and with results you can measure:

• Make a quick map of your dependencies: which systems, suppliers, and people hold up your operation, and what would happen if one were missing.
• Secure your data first: confirm you can export your key information and have at least one backup outside the main system.
• Document your critical processes: so they don’t live only in one person’s memory.
• Prioritize one risk point at a time: tackle the most costly or most fragile one, measure it, and move to the next.
• Assess what’s worth building custom: the areas where control of your data and processes matters more than renting a generic solution.

The collapse of SVB was a borrowed warning: any business, whatever its size, gains stability when it spreads its risk and keeps control of what holds it up. At Normandia Web we build custom software that keeps your data and your processes in your hands; if you want to identify where your single point of failure is, let’s talk and design that first step together.