Tech is Tightening Up

For well over a decade, the technology sector has been a major driver of growth for individuals and investors alike. Adding a global pandemic to the mix fueled even more confidence in the space as businesses and individuals grew accustomed to virtual lifestyles and the technology it depended on.

With the pandemic behind us, we’re finally starting to see cracks in that growth story.

Rising interest rates have caused investors to tighten up the reins on capital and a return to more traditional metrics for valuation. The “growth at all costs” philosophy is being questioned putting pressure on the technology ecosystem to demonstrate stronger unit economics.

As the market grows tougher in the year ahead, it’s likely we’ll see technology companies – and their investors – increasing their emphasis on the fundamentals that fell wayside in the pursuit of growth.

Recalibration

Turbulent times often call for recalibration.

In the last few months, what we’ve seen so far is a renewed emphasis on efficiency, as evident by the almost daily layoffs we see in the news cycle.

We suspect what will follow in the next year is a retrenchment on positioning.

Positioning and efficiency may seem like opposing concepts. However, well-defined positioning can be a powerful efficiency tool for tech leaders.

Positioning in Action

Positioning means focus and focus avoids waste.

A clearer definition of who you are and how you win provides a lens through which each function can clearly draw a line between in and out-of-scope. Unnecessary features, wasted content, and sales cycles spent targeting the wrong ICP can all be cut before they even start.

As budgets become more restrictive, we expect to see more tech companies tighten up their positioning to be more targeted and focused as a means of trimming down the fat that comes with unfocused growth goals.

Organizational misalignment around positioning is a strategic risk that leads to waste. By focusing on getting positioning right, leaders can drive top-line growth while remaining mindful of the bottom line.

Is your technology organization looking to explore succinct positioning and drive efficiency? Reach out to Sean Pavlidis to learn more.