Over the last year, changes have swept over the tech industry at a pace that even the most nimble of startups have struggled to keep up with. With a recession looming, companies are feeling the squeeze on both ends as fundraising becomes harder and customers’ budgets shrink.
For a long time, companies used — and thrived on — a growth-at-all-costs model. Whether it came to fundraising, sales, or recruiting, teams could build massive pipelines and rely on cold outreach at scale to bring in the funders, clients, and employees they needed.
Today? That’s no longer the case.
“It's way harder to fundraise,” says Nolan Church, CEO at Continuum and former Head of Talent at Doordash. “Now, companies are being forced to extend their runways, seat-based SaaS businesses have seen existing customers get smaller for the first time, and we have the rise of AI. All of this is putting a lot of pressure on leadership teams to be really thoughtful about how they're spending money and how they're allocating resources.”
For many companies, surviving the next year will require fundamentally shifting the way that they operate and moving from a growth-at-all-costs model to a network-based approach that prioritizes results over speed, quality over quantity, and real relationships over traditional spray-and-pray methods.
Below, three experts explain the tactical, network-based approaches companies should take to succeed in 2023 — and why they matter.
- Richard Cho, Advisor & Former Chief Recruiting Officer at Gem
- Nolan Church, CEO at Continuum
- David Connors, Co-Founder & CEO at The Swarm
- Moderated by Opal Franklin, Events Lead at The Swarm
Watch the full event recording here. Read on for key takeaways.
Expect more diligence
“We just left the longest bull cycle in history, in an environment where essentially money was free,” says Richard Cho, Advisor and Former Chief Recruiting Officer at Gem. “As a result, anybody with a decent track record and a halfway decent idea was given money to be able to build a company.”
However, as funding dries up, founders can no longer expect to land funding after a single pitch meeting. Investors are far more cautious about where they’re placing their funds, and they’re stress-testing both founders and ideas before doling out cash.
“Diligence is back,” says Church. And that diligence doesn’t only apply to founders: as cash dries up, teams are being far more careful about the products and services they buy with their shrinking budgets. This requires sales teams to go beyond cold outreach and instead build stronger, deeper relationships with potential clients.
“There's definitely a core set of products that have established themselves through many decades and that you're pretty confident you're going to buy that product,” says Cho. He continues:
“But when I look at [less established] companies, I have to have some level of comfort that they do what they say they do, and that they’re going to be there beyond the one- or two-year contract I’m signing. That requires the ability to be able to actually pause and have a conversation, and build that trust and credibility with one another.”
The same applies to recruiters, who are now trying to scoop up top talent that are wary of joining a company only to be laid off in six months’ time.
“This has actually been a trend going on for the last 5 to 10 years — candidates aren't just taking the first job available,” says Church. “Especially the top talent. They do their diligence in the company to see what the culture actually is like, what the leadership is actually like, what the revenue and valuation is actually like.”
The takeaway: As the macro environment changes, don’t expect investors, clients, or job applicants to place their trust in you as easily as they once did. Build deeper relationships and be prepared to put in the work to earn their trust.
Reach for quality over quantity
From the outside, it can be confusing — if not downright frustrating — to watch companies lay off thousands of employees one week only to begin hiring again the next. And yet, according to Cho, this is actually a tangible sign that companies are shifting from a growth-at-all-costs approach to a more strategic one.
“Now, companies are forced to focus on their core and their one or two moonshot ideas,” he says. “In the talent space, that translates into hiring one person that is going to do ten things and do them well, rather than hiring one of ten people that can do the same thing.”
While layoffs may have made hiring seem less competitive, the war for top talent remains fierce. And now, recruiters are being asked to land top performers with even fewer resources than they had before.
“In order to do that, you not only have to find that unicorn, but you also have to convince that unicorn to come join your company, whether you have the Meta label or you’re a startup that is not known yet,” says Cho. “That war for talent will still be just as hot as ever for that particular unicorn, and you need to convince that person to actually take a chance on our startup.”
Unfortunately for recruiters, most unicorns aren’t scanning job boards or responding to generic LinkedIn InMail. And this is where taking a network approach becomes critical.
“We need to go out, come up with a market map of the person we want, and then go plug that into The Swarm and figure out who [within your network] has the best relationship with that [type of] person,” says Church. “Then, we figure out ‘What’s the best message to send them to get them activated and get them into our funnel?’”
This “sniper-style” approach to recruiting is also going to be needed in sales. As clients become more reluctant to invest in new tools or services, sales teams need to focus less on a spray-and-pray approach and instead get laser-focused on sending warm, personalized outreach to targeted accounts.
The takeaway: As teams are expected to do more with less, it’s crucial to pivot from cold outreach to more targeted, strategic, and intentional approaches.
Blur the lines of your networks
Traditionally, most companies have built highly siloed databases where they track their investors, target accounts, and recruiting prospects all separately. However, when you keep these networks separated, you can miss out on valuable opportunities to re-engage relationships in new ways.
“The way I see the world moving is that you’re investing in these relationships, and people wear different hats over their lifetimes,” says David Connors, Co-Founder and CEO of The Swarm. “Maybe someone starts off as an employee, then becomes an alumni, then becomes an advisor and then potentially an investor.”
Rather than bucketing connections solely into one list or another, find ways to stay in touch and use connections in new ways.
“Your company network can be activated for a number of different activities that can help you accelerate, such as the amplification of posts, awareness, and sales,” says Church. “If you’ve engaged connections in a way that is positive and creates a long-term relationship, versus the short-term transactions that I saw for the last ten years, then they’re like your customer advocates.”
The takeaway: Focus on building long-term relationships with individuals, whether they’re potential candidates, clients, advisors, or investors. If you’re building positive relationships, you may be surprised at how flexible they are.
Leverage the collective power of your supporters
Finally, don’t be afraid to ask your network for support — whether that means connecting you to candidates, influencing a candidate through the funnel, or hopping on a call with a potential investor.
“Lean on the people who have a vested interest in your company succeeding,” says Connors. “That’s everyone on the team, the hiring managers, the individual contributors, the external stakeholders, your investors, your advisors, your supporters, and your customers.”
Today, candidates, investors, and decision-makers are less quick to trust. A warm introduction and testimonial from a trusted source both go a long way when it comes to establishing that trust, which means companies need to lean on their networks for support more than ever.
“It’s a team sport,” says Cho. “It’s not just the recruiter reaching out anymore. It’s the recruiter, the CEO, and the VP all reaching out and showing love to a particular candidate so that she’s so compelled and so appreciative of the entire company wanting to engage her that she responds.”
The takeaway: Don’t be afraid to engage your network to build new relationships. Leverage existing supporters’ help when you’re reaching out to candidates and leads.
Start charting your company network with The Swarm
As the macro environment changes, the old playbook for growth is no longer working for companies. To learn how The Swarm can help you map your collective network and leverage your relationships for growth, sign up to get free, early access to our trial.