After years of growth, Europe’s tech companies are facing a tougher time. With over $400bn wiped from the market over the last year alone, many commentators are painting a bleak picture for the future. But it’s not all doom and gloom, the good times are around the corner. I’m here to guide you through the sales trends I have seen throughout 2022, what works for us, and why I’m positive for the future. No pressure.
Table of contents:
- Where’s the money gone?
- Clients want more and they want it now
- When clients change, we change too
- It’s not just a job, it’s a partnership
- Spamming social media doesn’t work, why you need that personal touch
- Tech events are back
- Working from home isn’t all pyjamas and coffee
- Looking forward to the future
- The Doomsayers are wrong
Where’s the money gone?
Funding is down. In Europe, venture capital funding dropped to $85bn from $100bn in 2021 [source]. And for startups, the effect of this funding squeeze is being felt the hardest with a reduction of 50% – 80% in capital depending on the stage of the project.
Europe is facing one of the biggest macroeconomic setbacks since the global financial crisis. It’s time to panic, right? Well no, if you scratch away at the surface there’s something worth considering. The inflated value of tech companies.
During times of prosperity, companies were focused on growth for the sake of growth. Projects were funded because they could be. This led to an over-evaluation of tech companies in general, and what we are witnessing is the market correcting itself. So why am I still positive about the future? Projects are starting to be funded only if they are delivering results. Companies are checking the revenue and projects that are running at a loss are being cut. That’s not a bad situation to be in. Before taking on any new project Inspeerity always checks its validity. We take the time to consider how the project will grow and what the repercussions will be. This leads to sustained natural growth rather than the fund-all approach many are used to. This prompts funding companies really delivering value, and thinking seriously also about results.
Clients want more and they want it now
With purse strings tightened, clients are taking the time to evaluate their projects more. The new trend we are seeing from our clients is twofold.
Clients want their projects started in a shorter period of time
It used to be that clients would give 3-4 months’ notice before the start date, this has changed to wanting projects to start almost immediately. It’s a challenge that our team has had to rise to. With shorter turnover periods from initial contact to getting the ball rolling has put added strain on the sales department. We’ve had to adapt and find ways to reach out to them. On average clients are replied to within 4 working hours, and a one-hour meeting can be scheduled within 1 to 2 days. Paperwork is often completed within 4 days, and a project can start anywhere from 0 to 6 weeks.
As an example, I remember getting in contact with a client on the 29th of December. After the paperwork was finalized, a team of three programmers was already working on the project by the 11th of January. One week later, another programmer joined the team, and a week later yet another one joined. By mid-February, the project had 9 programmers.
If you have the right services and the ability to upscale to the client’s needs, then it is possible to work to tighter deadlines.
Clients expect more than a software team
I have seen a shift from outsourcing to consulting services. I have noticed that our clients are less and less interested in body leasing/outsourcing. More often they are looking for support in validating their project’s architecture. they are looking for someone who will challenge their concepts. We chose this approach many months ago, we have sometimes failed to win a client because we were not the cheapest, but we have never lost a client because we provided more value than the sum of the developers.
Often clients approach the team with a clear idea about the project. They have the idea and we have the knowledge. However, when we take on a project we offer more than a software team, we build relationships and over time become consulting partners. Through taking the time to understand a client’s needs, from direct visits and meetings. Our programmers show that we are more than an outsourcing service.
We have come to the conclusion that even if the client has an experienced development team on their side, by choosing to be an active partner we are able to find better solutions than those proposed by the client’s team. As a Software House, we have completed many more diverse projects and our knowledge, experience, and perspectives are broader. This is a trend we are exploring more, delivering consultation services. From the initial results, this is something we are setting our sights on more and more in the coming year. This has also led clients who wanted any dev at any price, to want quality developers at a reasonable price.
When clients change, we change too
As our clients’ needs change, we adapt to them. There’s been a shift in services that we provide: solving problems with software, architecture even business knowledge, and later skilled people. With many companies looking for ways to augment in-house teams, quality is becoming a significant factor. To start a project right and reduce the technical debt, we needed to adapt and expand what we offer to the clients.
A good example comes from our experience with companies working with other outsourcing teams. We have a case, where a customer wanted to add QA because developers from outside were delivering poor-quality code. The truth was that the problem was more with the developers, but delivering a strong QA team on the project was very important. Our customers also realized that the days when a developer checked their own code are long gone. Especially from a cheaper outsourcing venture.
After taking on the project, clear rules for code delivery were introduced and a testing team helped resolve the issue. Having and offering the full package, up to and past testing has allowed Inspeerity to deliver more. This trend offers not just excellent coding but to make the customer feel safe. To make a promise that the project will be looked after and tested, is a trend more people should take on. It’s the key to resolving issues around technical debt. And an important issue to address, if they wish to expand the scope or size of the project in the future.
It’s not just a job, it’s a partnership
Clients come to us already with an idea of what they want. There is a shifting pattern from running only an in-house team to a model that includes external partners. Clients often want an external team that is solely dedicated to them in the long run. They come to us expecting a team that can work closely and reacts quickly to their project. It’s a change that we are happy to accommodate. The shift in retaining customers for longer-scale projects has dominated our business model.
We look to be a consultation partner more than an outsourcing partner. And it’s something we wish to push for in the future. One way we accomplish this is through our “endless” feedback loop. We cooperate not only at an executive level, but also within the project. To make sure we get feedback from the client, but also to make sure that ideas from our architects/devs are also reaching the management level. And it’s a trend of we wish to stress for any future partnerships.
Spamming social media doesn’t work, why you need that personal touch
With the restrictions of the pandemic forcing everyone to work online. The digitalization shift led to an increase in the number of companies using social media to target their clients. More companies went digital and as a result, clients were bombarded with social media messages. We were the same. But we learnt an important lesson from this. It doesn’t work, well, not to the extent people hope. This is why we need to put a personal touch on how we approach our customers. We are already changing to the market’s needs. Developing our team, updating our image, and working to put that special touch to all our correspondences. There’s still a place for social media, but it needs to attract the customer’s attention and not the same old messages that they expect. You need to put a face to the company.
Which brings me onto the next point.
Tech events are back
This year alone we had the pleasure of going to Dubai for Gitex 2022 – one of the world’s largest tech events. As mentioned, if social media platforms are underperforming, then you need to take your business to the clients themselves. With restrictions lifted, this is the time to get back out there and expand your markets. Bring your business to where the people are.
Tech events give you the option to bring a personal touch to people. And in a business environment where it’s hard to see a big difference between competitors, being able to show who you are is a selling point. Looking to next year we are already planning to attend events in Canada, Africa and to expand our reach into Holland, Germany, and Austria. Who knows, maybe a trip to the USA is on the cards as well. Over the last few years, this advantage wasn’t available to the extent it is now. And it’s why things are looking up for 2023.
Working from home isn’t all pyjamas and coffee
The pandemic days were tough. Working from home to many, was a dream come true. But a lot of evidence shows it had negative effects on our mental health. A recent report urged employees to tackle the mental health of their remote workers. And to manage the issues surrounding working from home. It’s something that we pay attention to in Inspeerity and you should too. From regular check-ins and access to mental health resources (like Hearme.pl which we introduced in Inspeerity). Offering your team the option of a hybrid working model and integration events helps to boost productivity.
Looking forward to the future
With 2022 rounded up here is some advice for the future based on some of the trends we have seen emerge this year.
- Start the project with a good tech lead, and the rest will follow into place. Lots of projects are built for the long term. So getting the code right at the beginning and reducing the technical debt of the project is essential. That’s why the first consultations are important to the project’s life cycle.
- Understand the business of your client. To take on a project you need to understand what is important for the client. Bring on the business analysts and open up those communication lines. If you understand the client then you understand how the project should work.
- Measure what matters. Don’t get stuck in all the small details. Pick out the parameters that matter and work to those.
- Exchange Ideas. Open up those communication lines and get working on those feedback loops. The more information you have the better the project will be.
- Be honest. Never oversell what you can do and if there are problems be brave enough to admit to them.
- Have fun!
The Doomsayers are wrong
A lot of commentators are saying the good ol’ days of tech growth are behind us, but that’s just not the case. There has been a shift in what customers expect. It’s a situation we need to adjust to. From customers wanting a quicker start to a project to expecting more than developers. It’s a situation that the software industry needs to tackle head-on. From offering the full package of developers and testing teams to feedback loops. These are the sales trends that we need to concentrate on. You just need to break through the endless spam of social media to make sure you are heard and to deliver on that personal touch.