What An Entrepreneur Should Look Out For In 2023
Entrepreneurs are a unique lot. And those who haven’t dabbled in this line aren’t qualified to give advice. Be that as it may – for I do not qualify – I would like to share my thoughts here in the hope that it may amount to something.
The first obvious thing to be cognizant of is this looming uncertainty and its stubborn refusal to go away anytime soon. This naturally acts as a spanner to long-term plans for investments, talent hire or even risk-taking. The entire world is going through major turmoil – Ukraine War, rising inflation, high-interest rates, lay-offs, etc. Sure, not every business will be impacted by all these factors, but it would be wise to list the ones that will impact majorly or minorly and what can be done to mitigate risks.
Secondly, the tech disruptions that we are seeing. They are, to an extent, where even non-tech businesses are positioning themselves as tech. It is an opportunity and a threat. Opportunity, if adequate investments are made in tech, and threat if mere lip service is paid. For instance, having a customer-facing app as an interface does not make a tech business. On average, only 35% of workloads (typically comprising non-core applications) are on the cloud. Given that cloud technology has been around for more than a decade, it is time companies went all-in. That’s not an easy call, though – moving overnight from on-premise to the cloud has to be done at some point if companies truly want to leverage the power of technology. And it’s not a matter of choice anymore for most. Customers are hugely demanding personalized services, so companies must use data-driven & AI-led insights to carve specific offerings. And cloud gives them flexibility – the sheer range of tech available and pricing patterns.
Lest I am misunderstood, I am not trying to sell cloud, nor do I work for any hyper-scaler. Cloud is just an example of where tech adoption at scale is headed and why it’s important to adopt it to stay relevant. And it’s been around for a long time, unlike some of the more recent buzzwords.
Thirdly, the ESG angle is crucial. Profit for profit’s sake is no longer sexy, and if a business is failing on these counts – environment, social & governance (ESG) – it won’t be an attractive talent destination. And not to speak of regulatory bodies breathing down necks anytime soon. Net zero by 2050 (for nations) is appealing on paper, sure, but it is only a matter of time before even smaller companies will need to declare their carbon footprints. Yes, this may not be a priority for a business that’s fighting to stay afloat, but it’s something that can’t be brushed under the carpet.
The last point I’d like to make is arguably the most important. Cost leadership. Companies, big or small, will have to obsess over cost. There’s not much of a choice when borrowing costs are high, and prices are generally rising due to inflation. Cutting down on waste and tightening belts would be a key ask. Money should be spent on areas that matter most – innovation, talent, value chains, etc. Perhaps expenditure that does not positively impact the top line may need to be curbed in the next 12 months.
Yes, I am aware that it’s risky to make predictions. Market conditions may change overnight, but being judicious and forward-thinking never hurts anyone. And I have only touched upon the obvious areas where there isn’t much scope for major disagreement.