This article asks how competitive intelligence thinking will help you avoid the effects of a recession.
Let’s start with a question. Did you know many investment bankers and startups have never known a slowdown? Think about it 2008 was the last major slowdown. And that was 14 years ago. There aren’t that many 14-year-old startups. And an investment banker with over a decade under their belt is established, to say the least.
Doing business in a growing economy is hard enough, but during a recession, if there is going to be one, it is more brutal. And if you were hoping for a more manageable 2022 after dealing with the massive upheaval caused by the Covid pandemic, you were sadly disappointed. Russian actions and other things stopped the thought that this year would be a land of milk and honey.
The most significant risk for 2023 will be continued economic retrenchment. Big counties are not collaborating and cooperating as well as they used to. Big companies look more at their bottom lines than championing a cause. This coupled with the end to the West’s relative stability. The stability following the fall of the USSR means that global business will get more challenging.
Less Global Stability
Did the cold war ended is a debate for another day. But the actions of the Berlin Wall coming down did bring some stability. And this is before the other surprises we can’t anticipate. So clearly moving onto a world with greater international rivalry and heightened tensions. Changes in demographics and technological change will bring both threat and opportunity. But remember, such changes rarely come without consequences.
And it will be even more challenging if you are not using intelligence to understand what’s going on. And what others are doing well and what’s likely to happen. Simply, your business needs the insight to see clearly and make crucial decisions. A recession can affect most businesses, some more so than others. But in the media, the tech industry seems to be very vulnerable.
Stock Value Can Go Up As Well As Down.
Tech stocks have recently fallen, causing giants like Apple, Meta, and Google to lose over $2.7 trillion. Job cuts have also become common, with companies like:
Meta (13%),
Lyft (13%),
Stripe (14%),
Amazon (10,000 employees),
And others laying off 50% or more of their workforce. Although 2022 has been a tough year for tech companies, things are only getting started. A recession doesn’t mean the end of the world for your tech company. But there are ways to keep it from being affected by difficult economic times. How can you make your business ‘recession-proof’?
Why Fear A Recession?
Despite what appears to be the worst time to start or run a tech firm, many large tech companies have come out on top. Square, Asana, Slack, Zoom, AirBnB, and Groupon are just a few examples. But the list goes on and on. Use competitive intelligence to isolate the insight as to why some failed. And to understand why others have done well, they determine what to do about it.
How To Become Recession-Proof (Well, Nearly)
Despite the problems a recession causes, there are also various routes to opportunities. A recession is not all bad. Here are some ways to reduce the impact of any recession or downturn in your business. Being lean and mean during a boom period is the best foundation to cope with a downturn.
Hiring Specialists For Specific Tasks
Budgeting in this manner allows you to maintain control over your capital. In contrast, employing more workforce and talent. This approach enables you to allocate resources. And also measure them at any moment in time, thus boosting ROI and saving money.
Furthermore, outsourcing makes it simpler to control the number of employees you have. Using the company’s services, you don’t have to lay off personnel to reallocate them.
How Competitive Intelligence Thinking
Despite how bleak things may look, technology isn’t going anywhere. Therefore, it’s critical to be prepared for when demand for your product rises again.
During this time, investing in R&D, particularly in solid UX, is critical. Keeping current users and attracting new ones by investing in R&D makes you more attractive to investors. Especially in the long term. You may miss important opportunities if you don’t research UX. Or keep up with your competitive intelligence. A firm grasp of customer needs is vital in informing your product roadmap. And UX research and competitive insight are fundamental to achieving this. UX also forces you to make customer-driven decisions instead of obsessing over features.
What is competitive intelligence?
Competitive intelligence is the finding & critical analysis of information to make sense of what’s happening & why. Predict what’s going to happen & give the options to control the outcome. The insight to create more certainty & competitive advantage.
How To Obtain Funding And Be Acquired.
Google and others have frequently snapped up smaller ones during a recession. It is crucial to have a strong product that will remain viable. The last recession saw Apple, Google, Microsoft, and Facebook acquire over 150 businesses. And refreshed their tech with new IP from smaller failing tech firms. Smaller tech businesses need to become leaner. Lean products focus on key metrics while allocating only the necessary resources. Furthermore, showing a great understanding of the market and users’ expectations is critical. It’s that competitive intelligence cropping up again.
It would help if you focused all your efforts on ensuring cash in your bank and not giving it away to rivals. A recession will also eliminate the bluffers and fluffers. As they will soon be found out. Selling their “me too” products or APIs. To avoid this, you need to know your market, target customer base and competitors like the back of your hand. And ensure your product is uniquely solving a significant problem.
A Better Product Experience Can Help Reduce Costs.
Maintain spending on development, including insight, research, design, coding, and more. Because founders are eager to get the product out as quickly as possible, they often skip those steps. There are advantages to this type of approach. During a recession, however, you cannot iterate as much as you would like.
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That is an easy answer, and you have to get there faster. To accomplish this, remove as much uncertainty as possible before starting, which is what UX and, more significantly, competitive intelligence is for.
It’s All About The Money.
No one should look forward to a recession. Your tech business, however, should not give up without a fight. Recessions will offer s numerous opportunities to succeed. We believe that proper insight, R&D, and leanness are among the things that can help you reduce failure.
How Competitive Intelligence Thinking Helps Tech Companies (And Others) Could Avoid The Effects Of A Recession In 2023.
The world is constantly changing in ways that are hard to predict. The best course of action is to take advantage of an opportunity as soon as it’s presented. Other than that, you need to be prepared for what’s to come. Despite the economic troubles, there still will be many opportunities for you. The best thing to do is to be open to new opportunities and diversify your business portfolio. Some of the best opportunities you will ever see can be realised during a recession. But if you are not looking for insight, then you will miss them.
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