From my vantage point of steering our technology companies and my family office, I see a unique view of the markets from both sides of the table.
Today, most investors and entrepreneurs are mesmerised by the dizzying heights of tech company valuations. Therefore, it's not surprising that the chatter echoing around is, “What’s the right time to step up my market investing? Have I already missed the boat?”
As my CIO and I analyse (and mostly discard) the stream of IPOs hitting the market, we see a common pattern. Many heavily funded ventures have one thing in common – they all want to grab customers and revenues in an instant noodle-like manner – quickly and effortlessly! But you’ve got to peel the onion to get to the reality.
These days, a great product or service, a truly satisfied customer base, and lasting financial metrics are buried under the buzz of new rounds of funding bursting the seams of the balance sheet. The money finds its way into easy-to-spend areas like advertising and PR, or unplanned hires with astronomical hikes and plump joining bonuses, or frequent displays of flamboyance with giveaways like BMW motorbikes. Reminds me of the heady days that led to 1999-2000 dotcom bust; it seems like history has come full circle.
This circus raises multiple concerns - where does true value creation fit in all this ostentation? Also, short-term tactics used by some companies to “buy” revenues are flawed in sound business principles and ethics. I’ve seen so many examples of insanely attractive offers that are meant to lure consumers with deals (well, even force them to buy in some cases); but the real question is when the balance sheet funding dries up, how much of the newly acquired revenue will stay? Which of their all-star team members will still stick on? And which investors will have bolted after flipping their investments?
I suppose only time will tell.
These observations strengthen my commitment that our family office will rigorously analyse every investment opportunity, scrutinise their disclosures, and track their post IPO progress. We will buy only when they have established their sustainability and market leadership. After all, it's better to buy something good at a higher price than a dud at a lower price!
Now focusing on the other side of the table – in our own tech companies, we are pushing aggressive growth across our Industrial IoT, WealthTech, and CareerTech ventures – with the customer placed at the heart of everything we do while our products act as the nucleus. There’s no debate that the product is always the hero, and that singular vision drives our customer acquisition and retention strategy. Simply put if our product or service is not the best of the breed, we have no reason to exist. Period.
Squeezing unnatural growth while you are trying to build a solid core is no easy feat. And throwing money at the growth problem is not always the right solution. What is it then? It’s back to a business fundamental that has always driven sustainability - execution, execution, execution! Across all dimensions, including culture, functional processes, and customer success, especially when you have to make them all in sync and work together like a well-oiled machine.
That’s the long-term sustainable advantage that trumps the temporary flash of new funding. And our talented and entrepreneurial business leaders, innovators, engineers, data scientists, and functional experts see that as the real reason to stay on. After all, how long will people keep doing something they don’t truly believe in?
