Today’s market reality        

Despite the steady ascension of the software development market over the last two decades, the tech industry seems to face great challenges. As always, this is bad news for many players and good news for those who have made substantial investments in the right direction, including company health. According to a recent McKinsey report, until 2023, the market was characterized by optimism, long-term talent needs, and a thirst for innovation driven by investments in generative AI.

However, recent developments in the industry indicate significant shifts in personnel needs.

As technology equity investments fell by almost 40%, investors favored projects using technologies with stable revenue and lower risk.

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Growing rapidly and its consequences

The new wave of optimism prompted many companies to overinvest in hiring and engage in the competition for new professionals by even lowering their barrier of entry, which has proved to be detrimental in the long run.

Many companies experienced rapid growth in opportunities and, consequently, talent, creating the phenomenon of rapid expansion, even in cases where these companies lacked relevant previous business experience or necessary professional know-how.

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The wisdom of folk tales  

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Community is key

As the hero of any folk tale demonstrates, success is not an individualistic process. During its trajectory the hero meets the right people at the right time that help him overcome obstacles. Such is the case of resilient companies that overcome market anxieties by investing in building a strong community (internal link to about page) around shared value. The members of these communities have the necessary cultivated expertise and loyalty toward the common goal. This is making the company highly resilient to sudden market changes. Hence, companies that focused on sustainable growth, rather than exponential growth seem to have ended on the winning end of the game.

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Simplicity and purpose

Holding ground against attractive but flying trends has also proven to be a competitive advantage in times of uncertainty for companies. Just as the heroes of folk tales always keep their purpose in mind, temptation can't take hold of them even when tested multiple times.

Also, when the road gets too complex or complicated, they go back to what they know and lead with confidence, cutting out the noise. As the mother of Little Red Riding hood advised her daughter: “Remember go straight to grandma’s house”.

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What are the indicators of good decision-making?

Succeeding against the odds of market shifts - another feature of folk tale heroes – requires good decisions made in the past for long term sustainability. Indicators of this are found in the turnover rate, the retention rate of a company and growth stability. Sudden peaks might not be the metric you are looking for when searching for a reliable partner.