Back in 2019 I was asked for a couple of predictions for 2020. Obviously no one seen Covid coming and hitting as hard as it did, but I did have a feeling that remote working would be further embraced and become much more normal.
Mental Health/Work-Life Balance
- We will move beyond the sticking plaster of mindfulness exercises and counselling in the workplace..
- There will be a realisation that people don’t do their best work if they are always working.
- Not just for ‘lifestyle‘ businesses, remote working is being talked about but there are still lots of issues in the way it is positioned and viewed within high growth companies.
- Other tech companies are pushing back against the 24/7 & 365 always-on, ‘go big or go home’ culture by exploring different working hours.
- Mission-driven businesses – the businesses that can truly have an impact on the world – will become more visible.
Not bad overall though clearly Covid played a part.
This year I’m laying down some predictions for 2023.
Artificial Intelligence – AI
- 2023 will be the year that AI starts to become embedded in what we do. We’ve moved from the point where AI was an esoteric idea that occupied the minds of clever people but struggled to noticeably impact our day-to-day, even if it was being deployed in the background. I’ve seen the improvement that AI has made on automated transcription software over the years and progress in the past couple of years has been phenomenal. Our live online event captions, supported by Balsamiq, deliver readable text that was simply not possible even two years ago. A good example of an application that is good for humanity.
- ChatGPT allows anyone to generate content incredibly easily. We asked it to write a SaaS newsletter. While it was pretty impressive, it was also very dull. Will one of the downsides of AI as it becomes mainstream be that content becomes more and more uniform and generic?
- As ever, the smartest companies will find a way for AI to augment humans though I also fear that we will end up thinking less critically.
Inflation and Depression
- Will be a major issue as lending rates and the macro economic and political climates affect economies across the globe.
- One obvious impact for software companies will be the cost of capital, whether that’s from angel, venture and private equity investors who have had a good run of years where low interest rates have meant that alternative asset classes with the promise of potentially higher returns have been attractive.
- Many of the alternative sources of finance, automatic revenue-based funding, will have to compete in a market where interest rates are higher so deals are less attractive for entrepreneurs, something that we are seeing play out at Pipe as we write.
Self Funded vs Funded
- Venture backed companies that have raised large rounds at high valuations will need to control spending wisely, those going back for more will generally struggle with valuations. Companies will get funded but the climate has definitely made life harder if you need to raise without a very compelling offering.
- Self-funded companies will fare better unless their business relies on working with depression affected industries, construction for example. We may see some venture backed fire sales.
- For all software companies with capital, depressions can be pretty good for business.
Back to the Office
Will not be resolved in 2023 but it will be increasingly clear that there are two types of business: hard-charging, blitz-scaling companies that tend to want to locate people in one place, or as few places as possible; sustainable, profitable businesses that balance their purpose, mission and the value their employees bring with an understanding that work is not the only thing.
The former companies are inherently higher intensity, higher risk – more likely, though not guaranteed – to make founders and investors wealthy. Employees may suffer burnout. The latter can make founders wealthy and enrich the lives of employees by being aware of what drives people to work and helping them achieve their goals.
Neither path is ‘correct’. Entrepreneurs choose.
Will it ever go away? 2023 is going to be a difficult year but there will still be believers.
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