According to IT’s people, this is what the tech future is going to look like
Do you remember the last time you’ve used the phrase “new normal?” Maybe you woke up one day and understood that all these market changes that we are undergoing are not that new anymore and that the “old normal” probably won’t return anyway.
When it had all started, we couldn’t imagine how the rest of the year would look like. Some of us have not given it a second thought, and some of us were preparing plans B and C, just to make sure to be ready for any scenario and to have answers to any possible “What if?” question.
“What if I lose my most important clients?”
“What if I will need to lay off employees?”
“What if I won’t find a new chance to get sustainable income?”
Many of us have been faced with these or similar questions, and many of us have faced them alone which can easily make us feel anxious and unsure about future steps and business plans.
How can you prepare new business plans if you don’t know the current market situation? Easy answer: you can’t. There is too much uncertainty and you will mostlikely end up changing the plan anyway. This, of course, doesn’t mean you shouldn’thave one. You should know where your starting point is and in which direction your business plans go, but remember to add some more whitespace to it to be able to pivot the plan throughout the year and leave the door open for unexpected opportunities.
A BIG HELP WHILE PREPARING YOUR BUSINESS TO OVERCOME THE PANDEMIC IS GETTING NEW MARKET INSIGHTS AND UNDERSTANDING WHERE OTHER ENTREPRENEURS ARE AT THE MOMENT.
According to that, the goal of this article is to present what’s the current tech market situation in Croatia and what the future will look like.
Did the entrepreneurial mood change? What are the expectations of tech entrepreneurs regarding the Croatian IT sector during the pandemic?
Read on, we’ve got some findings
To be able to give you an answer to these questions and to help tech companies adjust to future market changes by giving them an accurate prediction of the situation of the IT sector we have conducted a research project called “Entrepreneurial expectations” among Croatian IT entrepreneurs. Over the past quarter, we collected information about the current experiences and future expectations regarding the economic aftermath of the pandemic.
The challenges tech entrepreneurs felt they needed to overcome during the first few months of the pandemic and the challenges they face now are a bit different. Of course, the feeling of uncertainty and sudden change was much stronger in the beginning.
To be clearer, when the lockdown started, the biggest challenges for our respondents were reallocating their resources and changing business strategies along with handling remote work because lots of teams have not been working from home before. It was the first time for many of them, which led to the fact that 24% of entrepreneurs struggled with remote organisation.
When they were asked about what their biggest current struggles are, the entrepreneurs answered that it was finding new business opportunities and nurturing their company values.
As we can see, many have quickly adapted and found a remote work model that worked for them, which made the worries shift to the perseverance of the company culture and the future of their teams.
Of course, the company culture can be harmed in moments of uncertainty. As an entrepreneur, you need to know how to communicate the situation to your team and sustain a healthy climate. In fact, communication is the most important helper while preserving a company’s culture, along with the method of showing appreciation to your employees.
These methods, however, change in market-changing times. Performing established processes that haven’t been problematic before are now becoming new challenges to our respondents. They shared with us that especially monitoring their teams’ performance, finding needed talent or onboarding new employees has become difficult to perform in the digital environment.
If an entrepreneur is not sure how to accommodate business processes, searching for external help is the best solution. For these circumstances and as a quick-fix to any people and culture stability questions, Talentarium has implemented a “survival kit” of services you can learn more about here.
To stay on top, seize the day, ask away, get to know your options. The fact that every individual controls his/her own (re)actions to the pandemic, brings peace of mind to a lot of entrepreneurs.
Still, there are effects of the pandemic that they can’t control. When asked about their biggest fear, the respondents stated that the things they were mostly worried about while listening about the coronavirus are the inevitable economic aftermath and developing health issues.
HOW WILL ALL OF THIS IMPACT THE EVERYDAY BUSINESS?
REALITY IS THAT THE ECONOMY IS HURT.
When we asked our tech entrepreneurs about how concerned they were feeling about the future of their company in the past few months and if they feared losing most of their income, 50% of tech entrepreneurs agreed and noted that they have felt this way, while others said they haven’t worried at all or that their worries were irrational since they still do fine.
When asked about their current feeling of distress, the average of the entrepreneurs’ responses was showing a slight fear of the future and possible income losses.
How do they combat that fear?
Like it usually is with entrepreneurs in the IT industry - they took some kind of action and didn’t take too long to react to the new situation. Around 70% of our respondents have changed their business model. One-third of the entrepreneurs adapted their existing products and services or added new ones to the portfolio. Others pivoted their strategy by changing pricing and promotion plans or finding new sales and distribution channels. Some interesting add-ons to their strategies were b2b matching platforms, targeting new specific customers, more cold calling activities in their sales plan, extending due dates on invoices, increasing the quickness of the internal information exchange, expanding to new areas like blockchain technology, etc. How do they combat that fear? As can be seen, tech entrepreneurs don’t leave their business to chance but are actively adapting to the market or even creating new possibilities.
According to psychologists and the Hogan Assessments research “What makes up the personality of a successful entrepreneur” , the individuals’ personality trait named “adjustment” plays a big role in entrepreneurs’ success.
Being a market leader in providing personality tests, Hogan examines the personality of talents from every angle, the bright and the dark side, so workplace performance can be predicted at all times. As Talentarium is an official distributor for Hogan Assessments on the CEE market, Talentarium Consultants are available to consult HR Managers or tech companies about implementing Hogan in their talent acquisition or performance evaluation processes.
When talking about leadership assessments and the Hogan research mentioned above, the goal of its conduction was to identify key characteristics of the “Successful Entrepreneur Personality”. So, what personality traits do most entrepreneurs that became (and stayed) successful have?
To quote the Hogan researchers: “the highly successful entrepreneurial leader is a risk-taker, they think outside the box, they push the envelope, they pivot quickly, and when innovating, the sky is the limit.”
STEVE JOBS SAID IT ONCE, TOO: “INNOVATION IS THE ABILITY TO SEE CHANGE AS AN OPPORTUNITY – NOT A THREAT.”
Let’s connect the dots. Of course, creativity, innovation and motivation are the fundamentals of successfully overcoming challenges the year 2020 presented to us. Being creative, innovative and motivated is key to being able to pivot quickly on the market. We’ve investigated if these predispositions for success are present among Croatian tech entrepreneurs.
Firstly, how did they feel towards innovation during the past months? Our findings show that tech companies with over 50 employees felt very productive during the whole time period of the pandemic, but they don’t think that they were innovative. On the other side, businesses with less than 50 employees felt very innovative, but have struggled a bit with the feelings of productivity.
The general motivation among entrepreneurs was very high, only one-man bands and small businesses with less than 5 employees have struggled with staying motivated during the pandemic.
Even when asked if they had applied for any financial support provided by the government, the less motivated smaller tech businesses mostly answered with a no. As reasons, they’ve stated time shortage and difficult paperwork. The medium-sized businesses were the ones who benefited the most from government initiatives, but many of them also decided to not use financial support and show empathy to other companies who struggle more with their liquidity at the moment.
Interesting is that one of the key findings of the above mentioned Hogan research was that “empathy” as a personality trait is also one of the indicators of entrepreneurial success. Do you see a pattern here?
All these discoveries described the challenges tech entrepreneurs were facing and the actions they took during the past few months of the pandemic. Let’s end the first part of our research that was focused on the “now” and see how our respondents feel about “tomorrow”.
The future of the tech industry in the pandemic aftermath
Tech entrepreneurs are pretty united in their opinions about further pandemic development. Around two-thirds of our respondents believe that the pandemic is going to increase and that the number of daily infected will rise. Since the last few weeks of October showed a record growth of active coronavirus cases in Croatia and the region, our respondents were right.
When asked about the expected economic situation caused by the pandemic, opinions seem more diverse. Around 50% of the entrepreneurs believe that the market will fight the economic aftermath for the next 5 years and that economic growth can be expected after that time period.
However, both very optimistic and pessimistic views are present in the responses, so some entrepreneurs believe that even 2021 could be a prosperous year, while a smaller percentage of them believes that we will have to fight COVID-19 consequences for more than 5 years.
YET, THEY DON’T FEAR THE FUTURE OF THE ICT INDUSTRY.
Only a few entrepreneurs stated that the tech industry is going to be very affected by coronavirus restrictions. Almost everyone agrees that the most affected industries will be tourism and food services industry, followed by the arts, entertainment & recreation industry, and transportation & storage. They also believe that the primary sector will be the least affected in the economy.
While the ICT sector may not have been directly impacted by COVID-19 measures like others, it is a fact that many IT companies that are serving the most affected industries could get influenced by their clients’ losses. Many tech firms could therefore face further project cancellation or employee layoffs.
If we remember the beginning of COVID-19, the Croatian IT job market reacted with fewer employments than previous months. If you are interested in the full article on how the Croatian IT job market reacted in the first lockdown, read our blog post from June here.
If you ask our respondents about their fear of facing unemployment, either as losing a job or dismissing employees, about two-thirds of them stated that they aren’t in the position to lay off and that they don’t think they will lose their job position. Only 10% believe that they could face unemployment, and another 10% have already laid off their employees. So, just like in other industries, layoffs caused by coronavirus consequences are happening in the ICT sector, too.
However, the fear of getting into a bigger unemployment loop is not common among tech entrepreneurs. Some of them have even shown tendencies to grow their teams further.
Half of our respondents answered that they are actively looking for new employees at the moment. The other half isn’t considering new employees at all, or are just not actively looking because they either don’t have the need to grow or because remote onboarding processes are too much of a burden right now.
If online onboarding is the one holding you back, try booking a consultation hour with HR Consultants and get guidelines on how to overcome that challenge here.
A RELATIVELY CAREFUL BUT STILL OPTIMISTIC INVESTMENT CLIMATE
Many processes have been changed, business plans audited, new strategies implemented. How will this impact income and new investments?
Well, the Croatian tech sector is (mostly) optimistic again. When asked about their income expectations in 2020 compared to 2019, around 60% of respondents don’t expect their income to decrease while the rest do expect that. This result aligns with other research within the industry that has shown that many entrepreneurs from the IT sector expect their income to not just stay the same, but to increase. In that same research, one-third of tech companies expect an income decrease.
When asked about their plans and investment expectations, about two-thirds of respondents plan to grow their business or invest by the end of this or next year. This shows a positive investment climate and a relatively promising future, although one-third of entrepreneurs play it safe and don’t have investment expectations. This, however, doesn’t mean they won’t decide to do so in upcoming periods. Maybe they will be inspired by those who were ready to invest further.
Those who had future investment plans were asked to list the industry in which they would like to invest in. The winner is the ICT sector.
Tech entrepreneurs are investing in their internal R&D, digital marketing campaigns and into building B2B partnerships, which can quickly provide them with missing resources to adapt to market changes.
If you didn’t consider a B2B partnership as a solution to finding and developing new opportunities, maybe this is the time to do so and invest in it. Since the biggest challenge here are time-consuming activities like monitoring the market and finding the right contacts, entrepreneurs who decide to start this process can reach out to Talentarium Consultants, who have the experience and know-how to find a valuable business connection on the market depending on a companies’ wishes and needs.
Many have not thought about this option because the possibilities and willingness to pair up with another tech company can, of course, be influenced by income changes and the processes of client gain or client loss.
How will the client portfolio of tech entrepreneurs look like by the end of 2020?
A RELATIVELY CAREFUL BUT STILL OPTIMISTIC INVESTMENT CLIMATE
The client portfolio of many tech entrepreneurs’ businesses is constantly changing. How will the COVID-19 situation affect that client portfolio? The opinions of our respondents are divided, again. About half of them believe they will gain more foreign customers in the future of the pandemic and that their export will rise, while only one-sixth believe they will find more domestic customers and that their export will fall. The rest don’t export their services or are just starting to do so.
This expectation shows that tech companies are pivoting their marketing and business development strategies to gain foreign clients.
Many are reaching out to new markets and seeking out new chances globally.
Summing up, what is the general feeling about the economic growth that has been announced?
Our tech entrepreneurs who took part in the survey are being cautious and gave it a slightly negative mark. Although they know that many segments of success and mastering this challenging time depends on them and their actions, they are also aware of the fact that the government is responsible for supporting and providing them with the right circumstances to perform their daily business activities.
The biggest optimists are medium-sized tech businesses, and the least optimistic are, on the other hand, small businesses with less than 5 employees who could be struck by this situation the most.
To conclude, despite the situation, Croatian tech entrepreneurs are still showing proactive entrepreneurial behaviour and think optimistically of the upcoming years.
The ICT sector with all their competent people and knowledge-based business strategies is a front-runner in the economic development of Croatia. Seeing that tech entrepreneurs are actively looking for growth opportunities within a crisis can only help motivate the whole Croatian entrepreneurial scene and companies from all sectors in finding their ways to succeed.
Especially now, when the “new normal” became our default state of mind, breakthrough innovation can happen.
Dear entrepreneurs, stay optimistic and motivated. With the right mindset and entrepreneurial mood, the sky is the limit.