It’s natural at the start of any new year to look forward and make predictions. I’ve spent a lot of time since Christmas reading economic outlooks for 2023 and it’s safe to say that right now, nobody has much of a clue.
The Pandemic saw investment in tech reach unprecedented levels which in turn coincided with an almost universal shift away from optimising go-to-market motions for profitability in favour of building them for capacity. Whilst not necessarily a new phenomenon, the prevalence of this operating model (if you can call it that) reached a boiling point as more companies than ever pursued topline revenues in the hopes of attaining “Unicorn” or “Soonicorn” status.
2022 saw this implode, the end of “Growth at all costs.”
Has business mindset changed, or is it just a pause until the next tech boom?
Same Story, Different Day
2023 has seen tech titans make huge layoffs already, only days into the year. And we’ve all become frighteningly accustomed to how these stories play out. But how did it come to this?
How did so many of these companies that have made huge numbers of layoffs get their numbers so wrong?
A lack of foresight? Overly-optimistic expectations born out of a disconnect from the revenue reality? Maybe a bit of both, perhaps.
A Note on Spreadsheets
The implications for the wider SaaS industry become increasingly gloomy when you understand how most start-up executives go about devising their hiring plans.
Typically it lives within a spreadsheet (normally based on a template found free online) that’s been; poorly adapted, filled with bad data and based upon several terminally misguided assumptions about growth. It probably looks something like this:
The future of a company is pinned on this document's reliability, it represents the foundation of the story sold to investors and employees alike and if it is fundamentally flawed (which it often is) the outlook for your company becomes immediately worrisome, especially in 2023. The tech titans might be too big to fail, but the same can't be said for most startups, even after layoffs and some cost-cutting. For most companies, the cost of not hitting targets is dying.
So where does that leave us?
It’s simple really; we no longer live in an age where growth can be left to chance. Unfortunately, many companies do so by continuing to ignore the looseness of their grip on the business (and customer) reality. It is imperative for founders, finance and revenue leaders alike to understand how the metrics which make up the unit economics of their business, relate to and interact with one another. And following this in a spreadsheet, is all to difficult to do most of the time.
I'm loathe to talk about accessibility, but in practice, we need to make it easier to adopt more advanced techniques of data modelling than are feasible for most excel skill levels. For starters, we need to be able to more dynamically test, analyse and modify plans so that they can keep pace with the times.
A huge blocker in the process of revenue planning is an inability to rapidly make changes in a spreadsheet to understand different scenarios, its one reason why most companies do this kind of planning once a year, typically at the end of Q4. At Clevenue, we're advocates of breaking this cycle in favour of an 'always-on' approach to revenue programming.
What starts with taking a more scientific approach to soundboarding growth assumptions and intelligently adjusting our plans thereafter, leads to better utility of sales capacity, optimised commercial outcomes, more sustained growth, fewer layoffs and more satisfied employees/founders/investors.
That’s why we created Clevenue, the first platform dedicated to engineering commercial growth plans. Because when the future of your company is at stake and the livelihoods of dozens of people are on the line, we can and should do better than a spreadsheet.
More than that, we need to.