Now is the Time to Act
By Peggy Tierney Galvin, chief strategy officer, Force4 Technology Communications
I’m back in the U.S. after attending Mobile World Congress in Barcelona, where tech leaders and entrepreneurs come together to talk about the future of connectivity, networking, telecommunications and the rapidly abstracting ecosystem of solutions that are layered on top of them.
There was no mistaking how these trends connect to the state of the B2B tech market today.
Major enterprise booth branding focused on automation, consolidation, orchestration and efficiency, emphasizing how customers and partners can gain clear ROI from their tech investment.
Mid-size companies’ booths highlighted their technology integration partners, positioning their solutions as de-risked and trustworthy options that could be instantly bolted onto platforms that an end-user already had in their environment. And everyone was talking about monetization: how to use existing network infrastructure to make money.
Notably absent: most of the B2C booths. MWC 2023 was decidedly a B2B event, in marked contrast to previous years that brought excitement around new and innovative gadgets, IoT and smart homes.
This retrenching is no coincidence.
With the last two quarters’ tightening of interest rates, VCs and PE firms are under deep pressure to avoid a concomitant drop in their rate of return for their investors. Shareholders of public companies, accustomed to healthy margins over the pandemic years of near-zero interest rates, are also watching tech performance carefully.
The 2023 result is a refocus toward de-risking spend and taking a far more critical look at portfolio governance, management and operations. B2B tech companies are feeling the downstream impact of this with reduced funding rounds coupled with stricter term sheets.
So, as you look ahead to 2H 2023, there are several factors to balance. You need to budget to last over a longer runway. You also need to able to make moves on the competition, who are being buffeted by the same crosswinds you are. And you need to show your stakeholders – investors or shareholders – that your balance sheet, pipeline, governance, management and operations are rock solid, using the language and validation that speaks to their specific careabouts and needs.
These plans will need to be ramped up quickly to show stamina and focus in Q2 and maintain pace through 2H. All signs are pointing to a market rightsizing in 2024 – will your strategy take you across the finish line?