Last week founders, operators, investors and suppliers from across the technology ecosystem gathered in London at FT Sifted’s first ever in-person summit – and one of the biggest London tech events of the year.
Here’s your guide from the Headland tech team on the conversations and trends that matter
TLDR – A one-liner on every top trend:
- Demand for talent is an industry obsession, with purpose (rather than raw money and options) increasingly used to attract the right skills
- Scale-ups are grappling with the conflict between exit valuation and long-term potential. The dilemma was crudely summarised by one industry commentator we spoke to as: profitable now, or richer later on?
- Europe’s media and start-up scene is healthier than ever, highlighting the benefits of building deeper relationships with reporters, clients and other players in the ecosystem
- The pursuit of risk is being thrown to the wind in favour of sensible unit economics, highlighting the need to demonstrate credibility
- To weather the current economic climate, tech businesses must be clearer on what their mission is, who their customers are and their role in the wider world
- Mindsets are shifting from growth and expansion to managing reputation
- Start-ups are no longer immune from demonstrating progress on sustainability
🗣 Purpose and the war for talent are the big topics of the day.
Views differed on the ‘great resignation’ and the extent to which this was ever a reality in the tech world. Most speakers agreed that this moment has passed and the power lies back with employers.
Despite this, attracting, retaining and incentivising talent remains front of mind for founders and has become harder in a market where valuations are falling. Employer branding is now a crucial component part of the overall value startups derive from communications and their reputation.
As one panellist remarked, the days of being able to attract people with “ping pong and pizzas” are long gone. Tech companies need to make sure they’re matching the more sophisticated expectations and demands of potential employees. Founders were also clearly divided on the benefits of remote working and how best to create culture with the realities of today. Indeed, a minority of the interventions from founders of young businesses sounded eerily familiar to anyone who’s listened to a more traditionally minded FTSE 100 or Fortune 500 chief executive lament the death of the office.
Increasingly this conversation is intersecting with the need for startups to define a clear purpose and mission. Several founders said it’s not enough to be “mission driven” – they need their employees to be “mission obsessed” to succeed.
🏃️ Looking for the exit: is tech sector’s obsession with the size and speed of founding team’s exits compatible with a long-term approach to business? On one hand, lots of panels were all about building impactful sustainable businesses – this came up in virtually every panel discussion, regardless of its title – and on the other, all of the chat and gossip (and an obsession within the sector) is money, namely down rounds, valuations and the IPO market. This dissonance highlighted a challenge for start-ups and scale ups in articulating a compelling vision for the future.
📰 A healthy media ecosystem around tech shows our sector is maturing – but means founders need to think through comms earlier than ever before (as described in a standout conversation between Tom Blomfield, co-founder of Monzo and GoCardless) and Steve O’Hear, formerly of TechCrunch. Leaders of young businesses increasingly think about communications in a transactional way and need strong advice on how to build relationships with journalists and stakeholders. Founders should be more transparent about their learnings and mistakes (as acknowledged by several in the speedy grocery and mobility industry, including the GM of Getir).
🤯 Crisis calls for clarity – as Michelle You, ex-LocalGlobe investor and founder of Supercritical and SongKick said, “crisis brings clarity.” This means clarity on customers and their wants and needs, and clarity of vision and mission. While anyone building a business should have a solid understanding on these core principles, today’s economic outlook has resulted in greater scrutiny across all activities and how aligned they are.
This isn’t just about positioning your business as an attractive investment opportunity – it’s about uniting teams behind clear objectives so everybody’s pulling in the same direction. As Fronted CEO Jamie Campbell remarked, “preserve runway, kill unnecessary apps”: cut what you don’t need. You quickly realise what’s critical and what’s not in times of crisis – and clarity of mission should be right at the heart of this decision-making process.
💰 Investors can be the voice of reason in the current climate – start-ups currently face a generational challenge: the vast majority of founders and operators came of age professionally during a very different economic climate to today. In the ecosystem, the key players who understand and have the muscle memory for operating in a downturn, are VCs that invested in the 2008 financial crisis – particularly those who have a background as founders themselves. A start-up scene that is used to communicating growth, client /funding wins and expansion needs to pivot to managing reputation through choppier waters.
For this reason, it’s incumbent on VCs to be the wise heads and the sensible hand on the tiller and to provide messages of reassurance on how tech companies have survived and thrived through turbulence in the past. Economic cycles are nothing new. We’ve been here before, and we’ll be here again.
💸 Communicating the pathway to profitability is key – today’s market is more risk-averse and more traditional. Investors – especially, it was argued, in Europe – want reassurance: do the economics, the customer acquisition strategy, the product-market fit, and the business model all make sense in light of new realities? As speculation and risk-taking declines, how can growing businesses demonstrate that they’re the credible, real deal to stand out from peers?
As put by the CEO of Bloom&Wild Aron Gelbard, founders are “getting used to saying no a lot more than we used to.” The challenge here, though – particularly as companies scale – is to make sure this does not lead to risk aversion and start-ups becoming like the incumbents they are trying to disrupt. Communications and marketing teams can be an important catalyst for creative thinking.
This trend is shaping media conversations too: it is hard to find a start-up that doesn’t publicly welcome the shift to profitability as a welcome trend and something that was always part of their strategy. Expect journalists to ask for more proof points, to question how your organisational structure fits your strategy and take a closer look at company accounts than previously.
🌍 Start-ups are no longer immune from scrutiny on sustainability – the bar has been raised for any company making grand statements or bold claims on sustainability, circularity or environmental and social impact. Several founders – including those who fell into the category of climate tech because they are creating sustainable and climate-friendly products – admitted their operations are nowhere near carbon neutrality and said it’s time to call out the greenwashing spreading throughout the tech community. It’s okay to be on the road to carbon neutrality: just don’t pretend you’re there already.
It is widely recognised that start-ups face particular challenges – compared with large corporates with deeper pockets and larger teams – in accessing and collecting data to reliably track and measure impact. This is particularly true of companies scaling quickly or adapting and pivoting their offer.
It isn’t just the media that will look closely at firms’ track record and whether or not lofty ambitions are being met. This is a conversation companies need to proactively engage employees, investors, customers and partners in too.