Tech companies are currently spearheading the global economic recovery, which remains unequally distributed as various countries and industries are still undergoing serious aftermath of the Covid-19 crisis. The societal role of tech companies, ranging from early-stage startups to multinational giants, is rapidly maturing as their economic weight dramatically increases. At the same time, tech companies are actually experiencing a tricky and singular situation that could be summarized by the 4 main challenges they are facing: strategic uncertainty, funding access, hypergrowth, and impact.
All companies are confronting a first layer of strategic uncertainty which pertains to the globally emerging dynamics that questions the shifting world order from a political, economic and societal standpoint. Lately, the worldwide consequences of black swan events have demonstrated to decision-makers how unpredictable the macro-economic environment has become. More specifically, tech companies are exposed to a higher degree of strategic uncertainty as they operate in very fast-paced environments that are beyond certain boundaries. The most advanced tech companies are indeed pioneering in uncharted universes, armed with edge technology and blue ocean strategies. Strategic uncertainty is a new hard fact. In such an uncertain context, designing a compelling midterm strategic vision and relentlessly executing a detailed strategic roadmap may thus prove quite a gamble. Even visionary foun
ders, supported by foresight experts and backed by multiple scenarios analysis, can not completely erase foggy uncertainty from their strategic map.
Fortunately enough, the unprecedented inflation in global monetary base partly contributes to water down the real economy, massively tech startups. Access to funding, which variable from one company t
o another, is definitively a key factor of competitiveness. Being on the right track to get series of fundings turns into a major competitive edge, especially when technology developments, digital marketing, international expansion, and recruitment of highly-skilled resources can heavily prove cash-consuming even for deep-pocketed companies.
At each development stage, funding rounds enable tech startups to survive, accelerate, or thrive in markets that are generally characterized by a global race to critical size and even in some cases by a "winner takes all" syndrom. Meeting venture capital firms' expectations in terms of revenue growth constitute then another challenge for founders.
Monthly revenue growth prevails today over any other metrics in the startup world. Such a blunt statement still understates the importance of growth acceleration in tech markets. This quest for hypergrowth, be it explicit or implicit, embodies the need for speed to reach a global scale in fiercely competitive and definitively global markets. Both organic and external growth are relevant strategic options to meet such an ambitious objective.
Startups that combine appropriate funding, scalable business and tech models, and a large adressable market may belong to the happy few ready to experiment hypergrowth. Although hypergrowth models are truly an overarching framework putting pressure on them, the vast majority of innovative tech startups may be compelled to devise alternative development strategies, and to succeed while lowering a bit their growth ambitions. By the way, profitability should matter, too.
Last but not least, the future legitimacy of tech companies as well as their social acceptance may highly depend on their capabilities to demonstrate their positive impact in terms of sustainability, climate, and diversity & inclusion among others.
As an aside, the definition of positive impact is amazingly rich in the new decade and can not be reduced any longer to the old-fashioned ESG, which stands for environmental, social and governance. Tech companies and investors alike are now invited to reshape a more holistic, but also more intimate, definition and measurement of their own impact. Reconciling tech and environmental impact must not only be at the core of the strategic vision implemented by tech companies, but must also translate into concrete action plans, with still some significant room for improvement on this topic. Tech companies should all the more exert a far-reaching impact since most of them wield significant influence on their whole ecosystem through effective partnerships' strategies.
In a nutshell, combining a clear strategic vision, an accurate understanding of fast-moving competitive environments, bespoke financial strategies to deliver both outstanding growth performance and a truly positive impact is overall quite an exciting meta-challenge for tech companies indeed.
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