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4 strategies for deep tech startups recruiting top growth marketers
In an earlier article, I wrote about how and when to build go-to-market teams at deep tech companies. There, I noted that it is more important for growth hires at deep tech companies to have functional expertise than industry expertise.
But how do deep tech companies connect and cultivate strong relationships with talented nontechnical growth people outside of their industry? In this article, I answer this question, articulating exactly how to:
- Write role descriptions that entice talented growth people.
- Create company marketing materials that brands your startup well to talent.
- Craft thoughtful end-to-end candidate experiences for growth talent.
- Close top growth candidates.
Incredible growth people are independent and creative and are drawn to environments that explicitly value these traits.
Write a job description that explains how you operate
Underscore the autonomy. Incredible growth people are independent and creative and are drawn to environments that explicitly value these traits. Growth talent wants to know that they have room to experiment, fail and iterate with the support and trust of their company. Highlight the creative agency you give to your growth team. Paint the role as one of managing a subset of the startup and its initiatives.
Show you are ready for a growth marketer. Do not expect your growth person to be a panacea for the company. Growth people work cross-functionally, but there are boundaries where the growth role starts and ends. Growth people cannot sell a product that is not ready. Growth people cannot fix product bugs. Growth people cannot replace excellent customer service. Ensure your role description is clear on what the growth person would do and what they would lean on other teams for. Demonstrate that you have a team structure in place where a growth marketer could fit in and thrive.
Articulate your talent needs. Growth is a broad category. Some growth marketers are more creative. Others are more quantitative. Some have more industry experience. Others have more functional experience. Be clear on what type of growth marketer you need and how this person’s talents would complement those of the existing team.
Use marketing to share your history and chart the future
Generate excitement and establish credibility. People can naturally be skeptical about new technologies and younger companies. Do anything you can to ameliorate these concerns. Link to relevant news articles from well-known publications and thought leaders in your industry. Incorporate customer testimonials that speak to the transformative impact your product creates. Name drop well-known advisors, investors and team members.
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The 5 biggest mistakes I made as a first-time startup founder
June 4, 2019 should have been one of the happiest days of my life.
At 11:30 a.m., a press release hit the wire announcing that the cybersecurity company I had spent more than eight years building was being acquired by a larger cybersecurity player.
What’s not to love about a successful exit? I’d be set financially, the investors who had given us $70 million would make money, and the technology we created would get new legs in an organization with broader reach and resources.
Still, I had regrets. For one thing, I initially hadn’t wanted to sell. (More on that later.) For another, I was nagged by the feeling that our company had fallen short of its true potential, and that the reason was me — specifically, several rookie mistakes I made as a first-time entrepreneur.
I don’t stew about those errors any longer. In fact, I believe my miscues at my first startup will help define my career from here on out. That’s why, as I grow my next company, I’m thinking about not only the things I want to do but those I’d never do again.
Here are five of them.
Trying to do too much myself
In management theory terms, I was a “pacesetter.” I’d be the first to jump into any project or task, I’d execute it as quickly as possible and I expected everyone else to keep up. I thought that was how a startup leader acted — super helpful and scrappy.
But it came at a big price: disempowerment of the team. I was hoarding not only control — nobody felt like they personally owned anything — but also the institutional knowledge that needs to be spread around as a company grows. I became a human GPS: People could follow my directions, but they struggled to find the way themselves. Independent thinking suffered.
I became a human GPS: People could follow my directions, but they struggled to find the way themselves. Independent thinking suffered.
After a few years, I had a frustrating sense that I had all the answers and no one else did. Well, no wonder.
I’m now leaving the pacesetting to NASCAR and marathons.
Thinking people can read my mind
I believed all I had to do was say something once and everyone would get it. I became irritated when that didn’t happen. “We talked about this three months ago,” I’d bark. Intimidated team members would say to themselves, “Yeah, but we really only got 50% of it.”
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Dear Sophie: What are Biden’s immigration changes?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie:
I work in HR for a tech firm. I understand that Biden is rolling out a new immigration plan today.
What is your sense as to how the new administration will change business, corporate and startup founder immigration to the U.S.?
—Free in Fremont
Dear Free:
Today is a historic day. The pace of change is accelerating now, especially in Washington. At the time of this writing, Biden is expected to imminently launch a new legislative proposal for comprehensive immigration reform. As the world sits back and watches, we are focusing great collective attention on upgrading our political, sociological and technological structures so that each human has the chance to succeed.
One of the things I adore about my practice of supporting international professionals with U.S. immigration is bearing witness to the process of individual transformation; it is an honor to support people in their personal journey from living in a world of effects to becoming the cause.
The immediate focus of the proposed legislation is centered around a solution for Dreamers (who are in the U.S. without documentation) as well as supporting the rights of refugees and asylum-seekers and children. For more of my recent thoughts on this topic, check out my recent podcast explaining many of the changes. The draft bill is expected to span hundreds of pages, so please follow this Dear Sophie column for more updates as I track and explore the details, especially related to tech immigration.
Innovation will be supported by many new immigration opportunities coming into greater focus. Biden’s campaign platform celebrated how “Immigrants are essential to the strength of our country and the U.S. economy.” The Biden team has prioritized immigration as a key focus within COVID, with an immediate goal of rewriting most Trump-era rules. For context, Trump issued more than 400 immigration-related executive orders and proclamations during his term.
H-1Bs: Although H-1Bs have been in the news a lot regarding new wage rules changing the order of the lottery and litigation, the lottery is still happening this spring, and if you want to sponsor candidates, the time to act is now, regardless of what is happening in Washington. If your company is planning on sponsoring individuals for an H-1B visa — whether they’re already living in the U.S. or are living abroad — I suggest that you continue to prepare for the upcoming H-1B registration period.
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Personio raises $125M on a $1.7B valuation for an HR platform targeting SMEs
With the last year changing how (and where) many of us work, organizations have started to rethink how well they manage their employees, and what tools they use to do that. Today, one of the startups that is building technology to address this challenge is announcing a major round of funding that underscores its traction to date.
Personio — the German startup that targets small- and medium-sized businesses (10-2,000 employees) with an all-in-one HR platform covering recruiting and onboarding, payroll, absence tracking and other major HR functions — has picked up $125 million in funding at a $1.7 billion post-money valuation.
The Series D is being co-led by Index Ventures and Meritech, with previous backers Accel, Lightspeed Venture Partners, Northzone, Global Founders Capital and Picus all participating.
The $1.7 billion valuation is a big jump on the company’s $500 million valuation a year ago, and it comes after a year where the startup has doubled its revenues and was not on the hunt to raise, with much of its previous fundraising still in the bank.
Personio currently counts some 3,000 SMEs in Europe as customers.
In an interview, Hanno Renner, the co-founder and CEO of Personio, said that the startup would be using the funding to continue building out the product — which operates a little like Workday, but built for much smaller organizations — as well as expanding its presence in Europe.
Although SMEs can be a notoriously challenging customer segment, Renner said that a new opportunity has emerged: A new wave of people in the SME sector have started to realise the value of having a modern and integrated HR platform.
“We started Personio in 2016 wanting to become the leading HR platform for midmarket companies, and we knew it could be a great company, but we realize it can be hard to grasp what HR really means,” he said. “But I think what has driven our business in the past year has been the realization that HR is not just an important part, but maybe the most important part, of any business.”
It may take one magic turn to convert users, he said, by providing (as one example) tools to recruit, sign contracts and onboard new employees remotely. Still, he acknowledges that the midmarket — especially those companies not built around technology — has been “lagging for years,” with many still working off Excel spreadsheets, or even more surprisingly, pen and paper. “Supporting them by helping them to digitize in a more efficient way has been driving our business.”
Personio is not the only startup hopeful that the shift in how we work will bring a new appreciation (and appetite) for purchasing HR tools. Others like Hibob have also seen a big boost in their business and have also been raising money to tap into the opportunity more aggressively.
Hibob is looking to build in more training tools, underscoring the feature race that Personio will also have to run to keep up.
But given the sheer numbers of SMBs in the European market — more than 25 million, and accounting for more than 99% of all enterprises, according to research from the European Union — the fact that many of them have yet to adopt any kind of HR platform at all, there remains a lot of growth for a number of players.
“SMEs are the backbone of the European economy, employing 100 million people across the continent, but it is also a sector that has been neglected by software companies focused predominantly on large enterprises,” Martin Mignot, a partner at Index who sits on Personio’s board, said in a statement. “Personio changes that, having created a set of powerful tools tailored to address the needs of small businesses.”
“We have had the pleasure of working with some of the most successful SaaS companies in the world, and given Personio’s success over the past five years and the immense market potential, we strongly believe in Personio’s ability to build an equally successful and impactful business,” added Alex Clayton, general partner at Meritech Capital, in his own statement. “After many great discussions with Hanno over recent years, we are now excited to be joining the journey.” Clayton is also joining the board with this round.
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Dear Sophie: Banging my head against the wall understanding the US immigration system
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie:
Now that the U.S. has a new president coming in whose policies are more welcoming to immigrants, I am considering coming to the U.S. to expand my company after COVID-19. However, I’m struggling with the morass of information online that has bits and pieces of visa types and processes.
Can you please share an overview of the U.S. immigration system and how it works so I can get the big picture and understand what I’m navigating?
— Resilient in Romania
Dear Resilient:
We welcome you to the U.S.! Our country greatly benefits from international entrepreneurs like you who expand here to innovate, create jobs and bolster the global economy.
I followed in my father’s footsteps to become an immigration attorney to fulfill my personal mission of helping people live the life of their dreams in the United States. A big part of making that happen is to give individuals the information and the tools they need to clearly set their immigration goals and to reach them quickly.
Check out my recent podcast where I provide a brief, high-level overview of the U.S. immigration system. The United States is a nation founded by immigrants. The immigration system is based on many of the same values and principles enshrined in our Constitution.
In 1965, the U.S. Congress passed the Immigration and Nationality Act, the foundation of all of our immigration laws today. Although some amendments to the act have been made over more than 50 years since then, the immigration system still operates under the same framework created back then. One of the things I appreciate about this framework is that there are so many legal routes to immigrate to the U.S. that are available.
There are many visa and green card categories you can use to chart your course. As a creative lawyer with plenty of lead time before somebody moves to the U.S., it provides many options to work with. Law doesn’t just place restrictions on people; it can be used as a tool for creation.
So, even though the system has its challenges and can be greatly improved, successfully navigating the system is doable. Everyone from individuals to founders, CEOs at startups and HR and Global Mobility at giant companies, families and couples in love — you just need to know the right questions to ask and the information to empower you to find the right immigration path.
My father used to always say there are five main areas of immigration law:
- Business immigration
- Family immigration
- Asylum
- Appeals
- Removal and deportation
I have worked on cases in each of these areas, but my firm focuses primarily on business and family immigration. Business immigration encompasses both visas and green cards, whereas family immigration only involves green cards that are based on an individual’s relationship to a U.S. citizen or permanent resident (green card holders), including fiance visa and different pathways to green cards.
At a high level, the U.S. offers two types of visas: nonimmigrant visas and immigrant visas. Immigrant visas are also called green cards.
Nonimmigrant visas allow for a temporary stay in the U.S. Each nonimmigrant visa that allows its holder to work in the U.S. requires an employer to sponsor the individual and hire them after approval and arrival. Each nonimmigrant is designed to allow an individual with certain skills, education or expertise that will benefit the employer, the employer’s industry or the U.S in general, such as a multinational executive (L-1) an individual in a specialty occupation (H-1B) or with extraordinary ability (O-1).
Some nonimmigrant visas are based on the candidate’s home country or whether the individual’s home country has a trade agreement with the U.S. Each work visa has different requirements for renewals. I discuss these and other startup-friendly visas and green cards in more detail in a podcast on the most startup-friendly visas and green cards.
A green card allows its holder to live and work permanently in the U.S. and is the first step to obtaining U.S. citizenship. Some nonimmigrant visas lead directly to a green card. However, many do not. So it’s important to be creative and strategic from the beginning of your U.S. immigration journey.
Most employment-based green cards require an employer sponsor. The two exceptions are the EB-1A green card for extraordinary ability and the EB-2 NIW (National Interest Waiver) for exceptional ability. Individuals can apply for these green cards on their own without an employer sponsor or job offer. We cover both of these green cards, as well as the O-1 nonimmigrant visa in Extraordinary Ability Bootcamp, an online course that takes a deep dive into the O-1A nonimmigrant visa, and the EB-1A and EB-2 NIW green cards, for which you may be eligible to apply.
Most international founders and entrepreneurs typically qualify for an E-2, L-1 or O-1 visa, or an EB-1A, EB-1C or EB-2 NIW green card. Take a look at the immigration options chart we created that outlines the most common visa and green card categories that apply to founders, investors and talent.
In addition to the various visa and green card options, you should know that you can apply for a visa or green card while living outside the U.S. or while living inside the U.S. Living outside the U.S., you can apply for a visa or green card at a U.S. embassy or consulate, which is called consular processing. Once living in the U.S., you can apply for change of status to another visa or adjustment of status to a green card. For more information about specific visas and green cards and how to navigate the U.S. immigration system, check out my weekly podcast.
Even during COVID, I’m confident you’ll find your way to the U.S. to begin your journey of expanding your company. I wish you good health and much success in 2021!
Best regards,
Sophie
Have a question? Ask it here. We reserve the right to edit your submission for clarity and/or space. The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer here. You can contact Sophie directly at Alcorn Immigration Law.
Sophie’s podcast, Immigration Law for Tech Startups, is available on all major podcast platforms. If you’d like to be a guest, she’s accepting applications!
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Dear Sophie: Tips for getting a National Interest green card by myself?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie:
I’m working in the Bay Area on an H-1B visa and my employer won’t sponsor my green card.
I really want permanent residence, but I never won a Nobel prize; I’m single; and I don’t have a million dollars yet. However, I think I might qualify for an EB-2 NIW green card.
What can you share?
— National in Napa
Dear National:
Wonderful that you’re taking matters into your own hands! This is a complicated process, so the most important advice I can give you is to retain an experienced business immigration attorney to represent you and prepare and file your green card case.
For additional do’s and don’ts in U.S. immigration, please check out the recent podcast that my law firm partner, Anita Koumriqian, and I posted on the commandments of immigration (and especially what to not do when it comes to visas and green cards).
This particular episode focuses on family-based green cards, but these recommendations are timeless and apply to individuals who are self-petitioning for employment-based green cards, such as the EB-2 NIW (National Interest Waiver) for exceptional ability and the EB-1A for extraordinary ability. Our top recommendation in that podcast episode is to avoid DIY immigration, so definitely retain legal counsel!
Filing for an EB-2 NIW or any green card requires more than just filling out the appropriate forms. The process needs to be understood, as the law and legal requirements, and the analysis of whether and how you can best qualify is complicated.
With any immigration matter, one needs to have the resources to fully understand the process, the steps for applying, and the timing and deadlines. We want to always make sure that you always maintain legal status (never falling out of status) so that you can remain in the U.S. (and don’t have to leave).
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Use Git data to optimize your developers’ annual reviews
The end of the year is looming and with it one of your most important tasks as a manager. Summarizing the performance of 10, 20 or 50 developers over the past 12 months, offering personalized advice and having the facts to back it up — is no small task.
We believe that the only unbiased, accurate and insightful way to understand how your developers are working, progressing and — last but definitely not least — how they’re feeling, is with data. Data can provide more objective insights into employee activity than could ever be gathered by a human.
It’s still very hard for many managers to fully understand that all employees work at different paces and levels.
Consider this: Over two-thirds of employees say they would put more effort into their work if they felt more appreciated, and 90% want a manager who’s fair to all employees.
Let’s be honest. It’s hard to judge all of your employees fairly if you’re (1) unable to work physically side-by-side with them, meaning you’ll inevitably have more contact with the some over others (e.g., those you’re more friendly with); and (2) you’re relying on manual trackers to keep on top of everyone’s work, which can get lost and take a lot of effort to process and analyze; (3) you expect engineers to self-report their progress, which is far from objective.
It’s also unlikely, especially with the quieter ones, that on top of all that you’ll have identified areas for them to expand their talents by upskilling or reskilling. But it’s that kind of personal attention that will make employees feel appreciated and able to progress professionally with you. Absent that, they’re likely to take the next best job opportunity that shows up.
So here’s a run down of why you need data to set up a fair annual review process; if not this year, then you can kick-start it for 2021.
1. Use data to set next year’s goals
The best way to track your developers’ progress automatically is by using Git Analytics tools, which track the performance of individuals by aggregating historical Git data and then feeding that information back to managers in minute detail.
This data will clearly show you if one of your engineers is over capacity or underworked and the types of projects they excel in. If you’re assessing an engineering manager and the team members they’re responsible for have been taking longer to push their code to the shared repository, causing a backlog of tasks, it may mean that they’re not delegating tasks properly. An appropriate goal here would be to track and divide their team’s responsibilities more efficiently, which can be tracked using the same metrics, or cross-training members of other teams to assist with their tasks.
Another example is that of an engineer who is dipping their toe into multiple projects. Indicators of where they’ve performed best include churn (we’ll get to that later), coworkers repeatedly asking that same employee to assist them in new tasks and of course positive feedback for senior staff, which can easily be integrated into Git analytics tools. These are clear signs that next year, your engineer could be maximizing their talents in these alternative areas, and you could diversify their tasks accordingly.
Once you know what targets to set, you can use analytics tools to create automatic targets for each engineer. That means that after you’ve set it up, it will be updated regularly on the engineer’s progress using indicators directly from the code repository. It won’t need time-consuming input from either you or your employee, allowing you both to focus on more important tasks. As a manager you’ll receive full reports once the deadline of the task is reached and get notified whenever metrics start dropping or the goal has been met.
This is important — you’ll be able to keep on top of those goals yourself, without having to delegate that responsibility or depend on self-reporting by the engineer. It will keep employee monitoring honest and transparent.
2. Three Git metrics can help you understand true performance quality
The easiest way for managers to “conclude” how an engineer has performed is by looking at superficial output: the number of completed pull requests submitted per week, the number of commits per day, etc. Especially for nontechnical managers, this is a grave but common error. When something is done, it doesn’t mean it’s been done well or that it is even productive or usable.
Instead, look at these data points to determine the actual quality of your engineer’s work:
- Churn is your number-one red flag, telling you how many times someone has modified their code in the first 21 days after it has been checked in. The more churn, the less of an engineer’s code is actually productive, with good longevity. Churn is a natural and healthy part of the software development process, but we’ve identified that any churn level above the normal 15%-30% indicates that an engineer is struggling with assignments.
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Dear Sophie: What’s ahead for US immigration in 2021?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie:
I’m in people ops and our team is trying to plan ahead for immigration in the new year and beyond.
What’s ahead for U.S. visas and green cards?
—Ready in Redwood City
Dear Ready:
Ha! I love it. Well, although I don’t have a crystal ball (yet), there’s a lot of opportunity, predictability and security that we can anticipate for immigration ahead.
Our U.S. immigration policy will experience a tremendous growth spurt in the coming months as Trump completes his regulatory agenda, litigation culminates and Biden takes office on January 20. The changes I’m tracking will incentivize U.S. companies to hire and retain top global talent and will make it easier for them to do so. There are also going to be increased opportunities for families and founders, strengthening the U.S. and Silicon Valley tech startup communities.
We can anticipate that the first 100 days of President-elect Biden’s term will focus on undoing many Trump-era immigration changes. Some of this will happen by executive order (although probably not tweets!) and some of it will be required to follow the procedures set forth in law through the Administrative Procedure Act (APA). The APA governs the process by which federal agencies develop and issue regulations.
Following procedures to rescind or amend rules already put into place — even on an expedited basis — takes time to allow for adequate review and public comments. We can anticipate that due process will unfold to effectuate these changes.
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Dear Sophie: How did immigration change for startup founders in 2020?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie:
I’m on an F1 OPT and am about to incorporate a startup with my two American co-founders. What were the biggest immigration changes in 2020 affecting us?
—Ambitious in Albany
Dear Ambitious:
Congrats on creating your startup. The Electoral College has voted and Biden is scheduled to take office on January 20, 2021. It may take him a few months to undo many of the Trump immigration changes, so there are several things for you to consider.
2020 gave many of us whiplash with all the things that happened! We braced for the worst in April after President Trump tweeted that he would suspend immigration to the U.S. In the end, the executive proclamations he issued in April and June fell far short of that and immigration remains possible.
However, these bans remain in effect until at least the end of 2020. The proclamations placed moratoriums on the issuance of green cards by the U.S. Embassies and consulates abroad, as well as H-1B, H-2B, J-1 and L-1 work visas. The Department of State has expanded the list of exceptions to these bans so many people now qualify.
One of the current constraints affecting the most people is that many embassies and consulates remain closed or are operating at significantly reduced capacity. Given that, we are recommending to our clients who are already in the U.S. to avoid leaving by seeking Extensions of Status, Changes of Status and Adjustments of Status with USCIS stateside.
The H-1B may be another promising visa option for your future as a founder. There are two ways to do it: “cap-subject” (the annual spring lottery) and “cap-exempt” (anytime of year). At a minimum, it’s easy for your startup to register you for the upcoming H-1B lottery in March 2021. It only costs $10 to register an H-1B candidate. If you’re selected, your startup could file an H-1B petition on your behalf. If you are not selected, your startup can register you again in 2022.
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3 ways the pandemic is transforming tech spending
Ever since the pandemic hit the U.S. in full force last March, the B2B tech community keeps asking the same questions: Are businesses spending more on technology? What’s the money getting spent on? Is the sales cycle faster? What trends will likely carry into 2021?
Recently we decided to join forces to answer these questions. We analyzed data from the just-released Q4 2020 Outlook of the Coupa Business Spend Index (BSI), a leading indicator of economic growth, in light of hundreds of conversations we have had with business-tech buyers this year.
A former Battery Ventures portfolio company, Coupa* is a business spend-management company that has cumulatively processed more than $2 trillion in business spending. This perspective gives Coupa unique, real-time insights into tech spending trends across multiple industries.
Tech spending is continuing despite the economic recession — which helps explain why many startups are raising large rounds and even tapping public markets for capital.
Broadly speaking, tech spending is continuing despite the economic recession — which helps explain why many tech startups are raising large financing rounds and even tapping the public markets for capital. Here are our three specific takeaways on current tech spending:
Spending is shifting away from remote collaboration to SaaS and cloud computing
Tech spending ranks among the hottest boardroom topics today. Decisions that used to be confined to the CIO’s organization are now operationally and strategically critical to the CEO. Multiple reasons drive this shift, but the pandemic has forced businesses to operate and engage with customers differently, almost overnight. Boards recognize that companies must change their business models and operations if they don’t want to become obsolete. The question on everyone’s mind is no longer “what are our technology investments?” but rather, “how fast can they happen?”
Spending on WFH/remote collaboration tools has largely run its course in the first wave of adaptation forced by the pandemic. Now we’re seeing a second wave of tech spending, in which enterprises adopt technology to make operations easier and simply keep their doors open.
SaaS solutions are replacing unsustainable manual processes. Consider Rhode Island’s decision to shift from in-person citizen surveying to using SurveyMonkey. Many companies are shifting their vendor payments to digital payments, ditching paper checks entirely. Utility provider PG&E is accelerating its digital transformation roadmap from five years to two years.
The second wave of adaptation has also pushed many companies to embrace the cloud, as this chart makes clear:
Image Credits: Battery Ventures (opens in a new window)
Similarly, the difficulty of maintaining a traditional data center during a pandemic has pushed many companies to finally shift to cloud infrastructure under COVID. As they migrate that workload to the cloud, the pie is still expanding. Goldman Sachs and Battery Ventures data suggest $600 billion worth of disruption potential will bleed into 2021 and beyond.
In addition to SaaS and cloud adoption, companies across sectors are spending on technologies to reduce their reliance on humans. For instance, Tyson Foods is investing in and accelerating the adoption of automated technology to process poultry, pork and beef.
All companies are digital product companies now
Mention “digital product company” in the past, and we’d all think of Netflix. But now every company has to reimagine itself as offering digital products in a meaningful way.
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