The tech sector bubble has truly burst, with many founders facing the duel pressures of a tight fundraising market and shrinking consumer budgets. As a result, we are already seeing some businesses go to the wall. But there are ways to soften the turbulence of the coming months. Here are four of my top tips:
Let tech perfect the good
The downturn might force you to reduce you headcount or put a hiring freeze in place. Let tech step into the gap, so growth doesn’t stall at the same time. Review your operations and identify points of friction or repetitive tasks, then explore whether automation or AI could step in to relieve the pain points or the time sinks they create.
It’s worth looking at all systems and operations, including those that are already working well. There may be marginal gains to make even in areas of strength. Last year, for example, Laundryheap introduced an enhanced, tech-led approach to how we optimised of our driving routes. This allowed us to streamline our deliveries and process more orders per hour, leading to crucial efficiency savings.
Think deeply about your customers
Whether you’re a B2B or a B2C business, buying habits are changing. Corporate budgets are being slashed and individuals are struggling in the face of rising bills and inflation. You can’t simply hope this won’t affect your business. Analyse your customer base and make sure your acquisition and retention models are factoring in these shifting factors.
That might mean re-evaluating your pricing structures, shifting target markets, reducing or expanding your geographical focus, or reskilling your sales team. Nothing should be off the table. Make sure your approach is moving quicker than the economic situation – try to stay one step ahead of your customers wants, needs and financial realities.
Diversify your offering
Don’t be afraid to explore new avenues and see what else you can offer your customers. Even if you think your business is well-equipped to handle economic uncertainty, it doesn’t hurt to gauge interest for new products and services. Diversifying your offering will allow you to develop links between existing and fresh markets, potentially unlocking new and different customer bases. For example, during the height of the pandemic, we rolled out a new, covid-free ‘hot wash’ option and expanded our services into the restaurant industry to combat staffing shortages.
Likewise, don’t be afraid to “de-versify” and reduce your produce offering or the markets you’re operating in. This can often help conserve vital capital and remove focus away from loss market areas or markets. Pulling back in the short-term is often the best route to long-term stability.
Learn from the market
Watch how other founders and teams are responding to adversity, and take note of the good ideas and the missteps. These may come from outside your industry, so cast a wide net and be as open as possible to new ideas and inspiration. And don’t just look to other CEOs or founders; follow marketing and sales leads, explore supply chain innovators, or build out your network of COO contacts. Surrounding yourself with new ideas and perspectives can help you troubleshoot as well as alight on fresh ideas that can help sales and growth.