If a week is a long time in politics, then a year is an age in tech. At the inaugural Sifted Summit last year, discussions focused on the sector’s severely dampened optimism amid a barrage of job cuts and a weakened economic outlook.
Those looking ahead to the future were debating when people were set to go all-in on web3, or whether meetings taking place in the metaverse would merge our physical and digital lives more closely. Where conversation on AI was present, it was largely at the margins.
Just a matter of weeks after this, OpenAI dropped ChatGPT and tech’s favourite cliché, ‘a paradigm shift’, suddenly felt like an understatement. And while this year’s Sifted Summit was about a lot more than just generative AI, it informed or overhung nearly every discussion, without a web-3 whisper or metaverse murmur in sight.
This blog post summarises our key takeaways from another breathless 48-hours at Sifted Summit this year.
The jury’s still out on whether AI will benefit incumbents or challengers
Unlike previous waves of tech adoption where disruptors and fast-growing businesses led the way, there isn’t a boardroom across the globe where AI isn’t already high on the agenda. As one AI investor bluntly put it, if you’re a start-up or scale-up, it simply isn’t enough for your competitive advantage to be ‘we’ve got AI’.
At the same time, claims or announcements on the deployment of AI in products are being held to ever-increasing levels of scrutiny by investors, potential customers and the media. Comms teams should take note – the first phase of breathless AI hype is closing while the popularity, availability and ease of use of tools like ChatGPT mean that audiences are much better informed. Founders and leadership teams must set a strategy, move quickly and make sure they’re asking the probing questions as they dive into AI deployment.
Investor interest is still strong, but far more narrowly focused than before
At tech conferences the words of venture capital investors tend to be the most closely-followed, as founders seek to understand which way the wind is blowing. There was still plenty of enthusiasm on display for deploying capital in European tech, but the tone of discussion was less heated and more hard-nosed.
This is a conversation which is now far more focused on specific verticals and niches, rather than pouring capital into the ecosystem as a whole. Fringe discussions on defence tech, deeptech, spinouts, quantum computing and thorny, regulated industries – such as health – saw significant interest.
In part, this reflects a longer-term event horizon across the tech ecosystem. Founders eyeing up a quick exit have had to rethink plans. Resilience has risen up the list of qualities investors want to see in those they back. And ‘difficult’, longer range and perhaps forgotten areas of innovation are getting a hearing once again. For those hoping tech might solve some of society’s longer-term problems (rather than just creating brilliant short-term products), this is a crucial first step.
Uniting teams behind a coherent narrative has never been more critical
With tech talent often attracted to scale-ups for the earn-out potential, alongside the freedom and flat, entrepreneurial culture, the current economic constraints mean founders need to be realistic with teams – and broader stakeholders – about the pathway to an exit.
Building a unified internal and external narrative (and communicating it effectively) helps employees (and investors) better understand the trajectory of the company, why certain decisions are being made and where that fits into the broader strategy.
This is doubly important as the industry recovered from bruising job cuts and starts to look into its collective crystal ball on when the European IPO window will open up again. Some time in 2024 seems to be the consensus.
Scale-ups have always been about building credibility – but now it’s real
While when the IPO market reopening in Europe remains a mystery for the time-being scale-ups must be ready for that window of opportunity when it does come.
This means doubling down on credibility within their existing category, or laying the groundwork as they establish new categories within their marketplaces. Getting the right backing from customers, endorsement from investors and showcasing the strength – and vision – of the business’ leadership is key.
We know AI regulation is coming, but there’s little consensus on what it should look like
Investors, founders and operators mostly agree that some government guardrails on AI will be necessary, but they are enjoying precious little consensus on what those guardrails should actually be. Ahead of the UK’s AI Summit at Bletchley Park in November (and with governments in the US and Europe also thinking about how to harness AI without unleashing huge harms), leadership teams in tech have never needed comms and public affairs support more than they do now.
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