There is a lot to think about as a technology leader in the best of times, and to navigate challenges in the market, you need to be able to make sound decisions to move your business, team and product forward successfully. We brought together industry experts to talk about how they are navigating the cost of living crisis firsthand, in an effort to share tips and insights with our community.
Here are some of the key takeaways from our discussion:
What changes have you seen in regards to your industry, business and/or target audience?
- Investors and Venture Capitalists are looking more at profitability over top line growth meaning while they may still have funds to invest, the process is slower.
- B2C founders need to confirm that their business proposition is still viable and delivers the right value as consumers are paying high energy, food, fuel costs.
- Changes in consumer motivations are not clear cut so marketing investment is difficult to target. Similarly competing market trends are difficult to interpret into a meaningful strategy.
How have you kept a pulse on your audience and their response to these changes?
- Some startup investors provide information and context that helps their company(ies) stay informed on the market environment and consumer reactions.
- Continuing to do market and user research with consumers and prospective customers to understand their behaviors and decision-making processes. With this information you can align product features in line with current consumer wants.
- While energy, food, and petrol prices have already increased, markets in the northern hemisphere won’t see the full effects of inflation until winter impacts heating bills. Now is a good time to plan how you will keep a pulse on your audience as larger impacts present themselves.
What precautions have you taken to navigate these changes?
- Focus on managing the things until our own control, such as reducing marketing spend and revisiting new hiring efforts.
- Narrowing focus and prioritizing a couple of specific markets. We are going deep on where we have the most impact or the low hanging fruit opportunities rather than exploring, spending and risking investment on new ventures.
- It’s key for founders to cultivate the skills to assess the landscape and make smart adjustments, whether that be moving teammates into different roles or adjusting their offering to meet new customer needs.
Has the crisis shifted your goals for the future?
- Goals haven’t changed, but they may be a bit harder to achieve and the plan to achieve them may need adjustment. There is increased focus on being efficient with fewer resources.
- Overall we are seeing companies adjust to revenue-based targets, rather than growth at any cost.
- The panel agreed that the 2022 recession is unique. In 2008, the recession had an epicenter but today’s environment is based on multiple factors, making it so much harder to find root causes and anticipate what is going to happen next.
What advice would you give a B2C startup looking to build their business during this time?
- Our panelists unanimously agreed that having a stellar product with great UX, value, and longevity based upon customer research and validation is imperative.
- Don’t be so invested in your initial vision that you miss opportunities presented by the current landscape. Don’t miss opportunities to pivot or evolve based on the current realities just because they deviate from the original vision.
- If you’re series A or B, ensure all investments in product development have a strong business case and are directed specifically to how you generate revenue/profit. Be laser focused on raison d'etre and making data driven decisions toward generating revenue.
- In Seed or Angel round, who you are and your level of experience is going to impact investors’ consideration. Those without fitting expertise will be challenged to win funding in the current climate.
How do you identify the right moment to pivot?
- Relying on customer feedback and insights from your sales force who are communicating with customers every day. Sales and Product need to work well together to keep that feedback loop healthy.
- Build cross functional teams that are unified and come to decisions together so everyone is invested and can make those decisions together with the same goals in mind.
- Using the data that you have to see upcoming changes and pivot strategically. And if you don’t have good data, making it a priority to get it.
What resources help you stay up to date on tech trends? What locations/communities should we follow?
- Reddit & sub-Reddits on technology topics
- Scott Galloway’s newsletter
- London founder networks and startup community at in person events
- [Women in Tech](https://women-in-tech.org/
- Color in Tech
- Pitches that prompt reaching out to talk to experts in a certain technology
- Sifted reports
How has the crisis impacted your team and their morale? How are you supporting them through uncertainty?
- Cultivate a culture that is very open, vulnerable, transparent.
- Leadership that is accessible, transparent, hopeful, and willing to try to ease burdens on the workforce.
- Lean on “good credit” that the culture and leadership have built previously to ask for patience and optimism from the team during harder times.
- Conduct engagement survey + happiness survey which measure different dimensions and can anticipate long term impact on productivity and team stability.
- Cultivate a deep level of hope even while acknowledging the hard times and being transparent that they’re real.
- High performing teams have high camaraderie so seek opportunities for team building, celebrations, and building support systems among teammates.
- Reaffirm people’s value to the company and, when possible, communicate when they’re safe and shouldn’t worry about job security.
Recently it’s been challenging to navigate hiring. How did you work through changes in your hiring approach?
- Base hiring decisions on your validated mid-range business strategy and current data, building a team that will help you meet those goals.
- Keep all options on the table and consider part time roles, contractors, and trade offs among junior or senior hires on different teams to maximize resources and keep moving toward goals.
Thank you again to our wonderful panelists
- Kevin Withane, Founder of Diversity-X—Diversity X is launching a pre-seed to seed stage venture fund to support underestimated founders of purpose-led startups seeking to make the world a better place + tech startups seeking to address issues that hinder diversity, equity, and inclusion. LinkedIn Twitter
- James Bryce-Lind, Head of Strategic Development at Minna Technologies—Minna Technologies is a tech company on a mission to help retail banks and subscription businesses deliver powerful digital experiences within subscription management. LinkedIn Twitter
- Chris Edson, CEO of Second Nature—Second Nature has helped thousands of people build better habits and are one of the UK’s fastest growing companies. LinkedIn Twitter
Get in touch if you want to learn more about how thoughtbot can help you think through a challenge or opportunity to de-risk your product and your business.
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