Where we are now
The tech industry is undergoing a fundamental and cyclical transition. While individually painful, it’s systemically healthy to clear away rot and make room for new and better opportunities for startups, investors and ultimately, customers. But it requires a back-to-basics mindset, with fundamentally different skills and perspectives than “move fast and break things” and “growth at all costs.”
While the cycle isn’t new (to many of us), there are a few significant differences this time around:
- Money beyond scale was reckless. Companies touted the funds raised rather than revenue generated. It inflated all kinds of operational costs; blunted execution skills; muted performance measures and distorted priorities. People and companies must pivot when runways are longer, funding scarcer, customers more risk averse and hype less acceptable.
- A generational run of success for investors, founders and leadership teams made the inevitable reckoning even more shocking and navigation more complex. Today’s companies – especially those coming from the Big Tech, Big Vision environment – must adapt to a pioneer, hands-on operating model with all the changes that entails.
- AI is hitting everything, everywhere, all at once. Earlier eras of innovation were triggered by foundational developments (client/server computing , mobile devices, cloud platforms, in-memory processing, no-code, etc.) that delivered orders of magnitude improvement in performance and created entirely new applications, categories and markets. Now, AI will not only enable simultaneous development but also deployment up and down the “layers” of technology. This has the potential to unleash unprecedented opportunity – and unfathomable chaos.
Forward thinking, outward thinking, best thinking is nearly impossible when fortunes and expectations change so drastically.
With valuations down drastically, funding at a standstill and IPO markets essentially frozen, companies have been treading water. Executives and managers have been distracted by their own personal financial impact, losing the business priorities and customer focus in the process.
This is a unique moment for enterprise tech companies to recalibrate their market readiness, strategies, priorities and skills with a renewed focus on value, relationships and orchestration. Here’s how you as company leaders can take advantage of the “in-between” to strengthen, repair, reposition, refund, and prepare for the coming tech renaissance.
Recalibrate now: The unique opportunity to “build back better”
Ah, but this is the moment for breakthrough. The reckoning clears the way for a stronger foundation.
Many of today’s biggest successes emerged from the last recession (Dropbox, Asana, Salesforce, Slack among them). The next generation of leaders from Big Tech certainly bring experience and ability in big vision and execution at scale. But not all know how to operate the model of the first fifty (or even first 500) pioneers effectively.
Recalibration requires different priorities, programs, processes and skills. This era is all about the small stuff, demanding hands-on execution and close-up detail. It prioritizes getting things done. It forces creativity when you can’t simply buy access. It involves humble listening to customers, partners, and other influencers. (But don’t get distracted here by the shiny – know what your unique value is.)
This is an especially good moment for earlier stage (or more conservatively funded) startups who know how to be agile and frugal. The pioneer mentality can mesh with the sophistication of the moneyed visionaries to make something far richer, more valuable, and more sustainable.
Here are six areas to recalibrate in this “in-between” moment:
- Efficient spending. The priorities are durable foundation and runway preservation. Demanded by current investors and needed for future funding, it’s just good business sense.
- Intensive engagement. This is the window to revisit customer and partner requirements and identify market gaps (and your own shortcomings). You’ll build the formula for innovation, co-creation and proof of value, strengthening relationships with customers and partners that allow you to upsell and expand your footprint (and their commitment).
- Clear and compelling value prop. No one needs frivolity now. Address the need, define the problem you solve, explain what you deliver and why you’re best qualified to do it. Most importantly, create a sense of urgency in the negative consequences and risks of the status quo.
- Simplified, self-service selling. Arm sellers with smart tools and customers with clear acquisition processes. With point three above as your business case, map out how easy it is (and what’s needed) to evaluate, buy and use your solution. Revisit the journey from discovery to demo to onboard and beyond.
- Ecosystem reach. It’s more effective to build communities and sell through and with partners. The adage that applies: “If you want to go fast, go alone. If you want to go far, go together.” As a leader, invest in efforts to recruit and enable your satellite partners. As a partner, push in to stand out. You need to hook the platform reps and the customers. Invest in activities that model what you need. Show how you drive sales and brand for the “whole.”
- Expectation management. Surprises hurt; opaqueness kills (morale, relationships, credibility and more). You need relentless clarity on the why of strategies, justification and outcomes of initiatives and assessment of (all kinds of) performance. It requires continuous communication to and with all stakeholders from the board to the front-line, with customers and partners and with analyst/influencers.
Rebirth: Ready to catch the next waves
The result of this stage is a successful and stronger rebirth. The cleanup and clarity of messaging, skills, processes, operations and ecosystem provides the foundation for exponential opportunity and growth.
That’s what investors want to see for next-round funding and higher valuations – a sustainable foundation. Customers benefit from stickier solutions and demonstrable ROI. People feel good about joining, building and staying in your company.
This is the immediate goal for 2024.
The rebirth – when markets, funding and buyers open up – will be fueled by omnipresent AI as an enabling capability inside platforms, networks, apps, processes and operations. It’s disrupting today’s solutions, models and markets, much like mainframes to client/server and enterprise tech, like the internet and mobile devices to ecommerce, how in-memory processing begat large-scale analytics. Think of AI’s fuel as the movie “Everything, Everywhere, All at Once” and you can see the scale, speed and dimension of innovation. (And the risk of chaos – all the more reason to be sure of your foundation.)
This back-to-basics commitment is what every company needs to do now, whether the high-flyer, established gorilla or next-stage startup. Everyone must prepare for the coming renaissance, which will be faster, less predictable and more dynamic than anything we’ve seen before.
Today’s recalibration is the bridging moment. What’s the roadmap? Stay tuned.
