The start of 2023 has seen big tech companies laying off employees in the thousands. To make matters worse, there’s talk of a potential recession happening this year.
If tech giants are having a rough time, how will smaller tech startups fare in this market?
As a smaller tech company, you’d be justified in getting a wee bit concerned. Fortunately, even when the near future looks bleak, there are ways your business can avoid the doom and gloom that comes with economic downturns.
Focus on Your Team
A business is made up of not just the brand but also its people. And, as a startup, you want each member of your team to be a valuable asset. The more you invest in them, the more they will be invested in you.
That’s why continuous improvement and on-the-job training are invaluable. Technology changes and grows rapidly, and you want your employees to keep up. Not only are you building a stronger foundation for your business, but you’re also giving your employees a reason to care about the company’s growth. The more you grow, the more they grow.
This is one of the best ways of showing them you believe in their potential. And, also of creating a lean team that will keep your business afloat when times are rough.
Understand the Recession Market
Let’s face it. Recessions are nothing new. And, whilst technology might not have been the same, business principles tend to work in the same way, generation after generation.
So, take a look at what other successful tech companies did in the past. See how you could apply those principles to your business.
That should give you a good baseline for a set of revised business goals for your company during a potential recession.
It helps to have a multilayered strategy with different sets of business goals for various situations. Things might not be as bad as you think. Alternatively, things might be worse.
If you have a plan for every situation, including the worst-case scenario, you won’t be left floundering when (or, if) things do go south.
Be Prepared to Offer New Products
When COVID-19 started spreading in 2020, many countries enforced a strict lockdown. The UK was one of them. Businesses that were deemed non-essential had to close operations. That included manufacturers as well.
However, seeing that there was a shortage of ventilators in the country (at a time when the NHS would require more ventilators than normal), the Government issued the Ventilator Challenge.
Manufacturers who agreed to take part in it got together to make 20 years’ worth of ventilators in 12 weeks.
If you look at other businesses during the lockdown, you’ll see a number of them did have to change their product offerings in order to stay relevant.
In a recession, you may find that the products you normally make are not required. So, you need to be prepared to change your offerings.
(And, if you paid attention to my first point, you’d have a team that would be able to handle that change!)
Focus on Retention, Not Acquisition
You know that saying—a bird in hand is worth two in the bush?
It applies—very strongly, I might add—to customers.
It is always easier to retain existing customers by keeping them happy than it is to acquire new ones.
And, if you’re in the middle of a recession, new customers are even more difficult to find.
So, spend time on building those existing relationships instead of focusing on new ones. Reach out to your customers and find out if their needs have changed. If times are difficult, it might be possible for you to help each other out.
Plus, marketing to existing customers doesn’t have to be tedious or boring. As Bold Content pointed out, B2B videos don’t have to be boring. Build a connection with emotional, funny, relatable content.
(Plus, Bold Content is already helping produce content that could help your workforce grow—check out the story about the animation they created for Tech She Can, which encourages young girls to take up STEM studies.)
So, there you have it. Keeping your tech startup going during a recession is all about having a plan and building human connections. Stay creative, and maybe I’ll be writing a case study on your business in a couple of years.