Fintech industry currently facing a number of macroeconomic issues, including global economic inflation, soaring cost of living, companies reducing their workforce, and a possible recession, yet about the war in Ukraine. All these factors have caused fintech M&A activities to break out 30% off in Q2 2022, the lowest level since Q3 2020.
This is not the first time the economic situation has deteriorated so rapidly. But when you look at the overall performance of the industry compared to previous years, the current downturn is no different. What can founders do to help their companies thrive during this period?
Hire high-performing talent
The worsening financial situation is causing leading fintech companies to suspend hiring or cut their workforce to avoid cost overruns. The industry has seen 1,619 jobs cut in May, compared with 440 in the first four months of the year.
The loss of personnel has also affected the Ukrainian startup ecosystem. More than one in ten Startups in the country have had to leave their companies since the start of the Russian invasion, and since then the number of businesses with up to 5 team members has increased, while companies with larger teams are declining.
Nearly every founder agrees that layoffs are a difficult but necessary decision to make in times of crisis, as payroll spending can be diverted toward growth or maintaining a runway. . But if you have the foresight and look past the current downturn, there’s a good chance your startup will have a better chance of survival if you hold onto specialist talent. And sometimes, hiring a new employee can bring a new perspective that helps you uncover problems in your company.
Ukraine has a huge talent pool and thousands of professionals are currently looking for an interesting project to join. So instead of burying holes as you face this crisis, see it as an opportunity to strengthen your company with distributed, high-performing talent.
Develop and demonstrate the quality of your product
Crisis is also a time of opportunity – you just have to look closely and you’ll spot the goose that lays the golden eggs. Crisis gives founders the opportunity to focus on building powerful products because times like these often highlight problems that need a viable, long-term solution, and startups can start building instead of focusing on relentless growth.
The hard truth is that tough markets also kill hundreds of startups without a solid product that rattles the market. This gives leading companies the opportunity to develop an even richer range of products and services.
Develop a solid strategy
To run a sustainable business, the founder must orient the business development and manage risks well. That’s why in times of crisis, startups that focus on developing solid business strategies and products often emerge to win the market from companies that aren’t focused on growth. develop solid products and business strategies.
I know it’s hard to focus on developing a strategy when there are so many external factors affecting your company. But the reality is that companies that focus on strengthening their business plans and solidifying their strategies have a higher chance of recovering and coming back stronger than before than those that went dormant.
Individuals and businesses thrive in the face of crisis by managing their resources, analyzing the situation they are in, and recognizing potential opportunities regardless of the amount of noise and chaos surrounding them. around them.
Hard times allow teams to set big goals to recharge and see things from a different perspective. For example, you might ask yourself: What is the unique proposition of the product? What can we do to make the most of the current market? What can we do to take our product further when the market recovers?
Despite all the obstacles, founders can excel in business by following three rules in times of crisis: strengthen your team, develop a better product, and do to strengthen business strategy. While these are not a rule or a panacea for all problems, I have found them to be very effective during difficult times.