A Year In - Economic Reopening Opportunities and Cautions for Scale-up Tech Firms - Dave Litwiller - March 17 2021
1. A Year In: Economic ReopeningOpportunitiesandCautions for Scale-upTech Firms
March 17, 2021
Dave Litwiller
A fewleading thoughts forscale-up stagetech firmsfor how bestto takeadvantageof thecoming
reopening.
Keywords:Scale-up, reopening, head start, in person, market dynamism, tipping point, change management, change
acceleration, IP, intellectual property, inflectionpoint, strategic intelligence, competitive intelligence, SPAC, RTO, IPO, direct
listing, zombie companies, inflation, interest rates, cost of capital, innovation, discovery, invention, remote workers, hybrid
teams. 1:1’s, one-to-one meetings.
ReopeningHead Starts & Early Cues
1) The earlyreopeningeconomies,suchasTaiwan,the US and soonthe UK, offercuesforbusiness
responses toincrease productivity,especially asleadingfirmsandsectorsget headstarts emerging
fromthe restrictive first yearof the pandemic.
There will be one-time gainstobe made forthose whocan get a stepaheadof theircompetition
movingintothe broaderreopening. The firstwave of the shiftwill take place rapidlyas
customersmove from defensive/necessity tomore offensive/progressive postures. Moreover,
those able toget togetherinpersonwith prospectsand customerswill be able to more easily
renewand enhance trust. Theywill thenbe able tosurface and act uponlatent marketneeds
that have remainedlargelysubmergedduringthe most confininganddistanced phase of the
pandemic.
Many companiesshouldrevisittheirregional approaches ascertaincountries move early
relaxinginternational travel restrictions. Subjecttosafetyandvaccine protocols,staff and
businesspartnersbasedinthose earlyreopeninglocaleswill be able toconductin person
businessdevelopmentabroad,gainingoncompetitorsstillinlockdown.
The productivityheadwindfromBrexit,bothpresentandprojected,compoundedbythe
pandemic,isforcingcompaniesandpolicymakersinthe UKto getcreative aboutproposalsand
frameworktospark domesticinnovation. Thoughtprovokingideascanbe gleanedfromwhat
theyare doingthatcan be adoptedclosertohome.
Market AdoptionTransition
2) Market adoptiontippingpointdynamicsshouldbe expectedtotemporarilybecome more
influenceable throughthe reopening. Pandemicnecessity behaviours will givewaytonewly
reinvigorated flexibility. Toget ahead buildingbeachheads of adoption,firmsshouldbuildindustry
networkmapsof the mostimportantusersinnew targetmarkets,andthendeliberatelycreate
sufficientlydense socialproof pointsof targetedtechnologyuptakearoundthose people. Thisform
2. of pinpointedrecruitingand localizedmomentumbuildinginamarketnetwork requiresdifferent
skillsthanscattershotand simple repetitionmarketing. Producersthatcan adaptto target market
networkdynamics will bothcause andbenefitfromoutsized reopeningforcesforchange inpatterns
of investmentandtechnologyusage bycustomers.
Rapidlyexploitingexternal opportunitiesforoutsizedgrowthinnew marketswillrequire
correspondingincreasesininternalchange managementand acceleration wherewithal, to
match internal operationsadaptability withthe upcomingburstof externaldynamism.
3) The pandemichasreinforcedstrongly atveryhighspeed thatregulatory andcompliance acumen,as
well as shapingthe formationof industrystandards andIPbodies,canmatteras much forultimate
competitivestandingas prowessin scientific, technological,clinical andgo-to-marketmatters.
The “runningthroughwalls/move fastandbreakthings”ethosmaybe greatfor some partsof
an earlystage business,butadifferent andmore balanced approachforscale-upsisneeded in
IP as well as before governmentandstandardsbodies.
Market Structure and Trends
4) Withthe approachof highrate of change marketplace conditions,a solidreal-timegraspof market
share and trends thereof isabouttohave outsized predictive valueforarange of strategicand
tactical choices for firms.
Inflectionpointsandrapidaccelerationsare verydifferent thansteadyindustryconditions for
howfast relative marketpositioncanshift.
5) Strategicintelligence andcompetitiveintelligencehave neverbeeneasiertodowell withdisclosure
requirementsforthe rushof companieshittingthe publicmarkets,whetherbySPAC,RTO,direct
listingortraditional IPO. Firmswhich improvetheircapabilities inecosystemknowledgeinputsto
managementdecision makingwill benefit;thosethatdon’twill setthemselvesback asothers gain
the informational advantageof whatisnow accessible.
It still takestime andmodel buildingskill toprocessandsynthesize the volume of marketand
competitiveinformationavailable. But, the feedstockof raw information formarket
understandingacrossawide range of sectors from publiccapital marketregulatoryfilingsand
investorcommunication hasn’tbeenthisgoodin20 years.
3. Capital
6) In B2B, beware doingbusinesswithzombiecompanies.
A decade+of significantformsof stimulus andfinancial marketinterventionssincethe financial
crisishave ledto a sizable proportionof companies(evenamongthe largest) whichare
dependentuponbailouts,lowinterestrates andotherlow costformsof capital. Theirfuture
viabilityisatconsiderable risk.
7) In B2B, RoI,payback time,and shapingexpectations of the customerare still of paramount
importance,evenif developmentcostsfora new productor service have beensubsidizedwith
pandemic-relatedfiscal stimulus orresponse funding.
Duringfundingbooms,itcan appeartemporarilylikenew businesslawsof gravityhave taken
hold. Such momentsare fleeting. The basicsalwaysreturntothe fore. Firmswhichexpectand
planfor the resumptionof more traditional businesscircumstancesusually come outahead.
8) Movingahead,inflationaryforcesmaytake holdinaway that theyhave notfor a verylongtime. If
theydo,interestrates,andthe relationshipbetweendebtandequitywill change considerably,
reformingmarketsforcapital andmerchantproducts a great deal,as well ascompanyvaluations.
R&D
9) Shiftingapplication driversfortechnologyasa resultof eventsoverthe pastyearhave renewed
awarenessthatwhenconducting highspeed R&Datthe forefrontof scientificandtechnological
knowledge,maintainhealthyskepticismof empiricalresultsuntil theyhave beenconfirmedby
theory.Paradoxical thoughthatmaybe,itis at the heart of doingdeeptechR&D well.
Until theoryisin place thatcan be validatedthroughtestablepredictions,earlyexperimentalor
empirical resultsatthe scientificandtechnological frontiershouldbe viewedwith some doubt.
They may be concealingerrorsor still latentknowledge gaps.
The frenzyto getthingsdone,especiallyin highly pressurizedcircumstances,can leadto
oversights of basicprinciples. Thistendencyisparticularlystrong whenfastchangingmarket
conditionsdemand fastpivots whichtake abusinessintopartiallyunfamiliarscientificand
technological territory.
Innovation
10) Major innovationrequires the abilitytohandle tensionsamongcompetinginterests,whichoften
quickly manifestsas tensionsamongpeople. Onlythrough constructively wrestlingwithinitially
contradictorypointsof viewwill deeperinsights andgreatercreativity emerge.
4. The interpersonal challenges formanagers tosustainhealthytensionamongpeople and
workgroupsare made more difficultwithremoteandhybridworkforces,comparedwithin
person. Keepingupinterpersonal dynamicswithremote workers while still drivingsubstantive
innovation requireselevatedongoingcontributionfromleaders tohandle tensionsproductively
withoutlettingthemtipoverinto lastingrelationship damage.
11) Sustainabilityof hybridteamsoperatingata hightemporequiresaremote-firstorientationto
communicationanddecisionpractices.
Otherwise,itistooeasyforin-officeinfluencesto winout,favouring those whocanandwill
workin the office.
Hybridand remote workforces boostthe importance of providingtime,trainingand toolsto
helpmanagersconduct 1:1’s withstaff,bothformallyandinformally,asthe foundationof
guideddevelopment andsupportforall employees. Furthermore, strong1:1practices
undergird manyotherpillarsof ahighperformance HR systematscale.
##
To contact the author: dave.litwiller@communitech.ca