In 2019 a survey conducted by the ScaleUp Institute found that 1 in 3 scale-up (fast growth) UK businesses expected to double their revenue growth by the end of 2020, and over half expected to bring headcount up by at least 20%. As we look back on that data, with a few months of this relentlessly difficult year to go, it’s very unclear whether these expectations will be met. However, scale-up businesses are nothing if not adaptable. In challenging times prior to 2020, fast-growth businesses have weathered storms of fluctuating markets, rising entry barriers or economic downturns – and emerged more successful and resilient than before. There’s a different strategy behind this for every business, but one constant remains true for many scale-ups: a solid technology plan is a non-negotiable element to success.
Recently the 2020 Sunday Times Sage Tech Track 100 listed its rank of the fastest-growing tech-powered UK businesses. As a member of the list for four years running, software development company Godel is no stranger to fast growth. Part of what this means for us is sustainability: scaling too quickly would only damage our client relationship management model, so we manage growth closely by limiting the number of clients we onboard each year. This is an attitude that can be applied to scale-ups in many contexts. Fast growth only has short-term value – the true success is when growth is repeatedly achieved in a way that’s sustainable for the business.
What’s The Real Problem?
Diving into technology specifics, this year has disrupted tech roadmaps for many businesses like never before. Since March there has been a brighter-than-ever spotlight on technology, spanning practically every sector. When we take a step back, this isn’t as “unprecedented” as described; digital transformation has been a common business priority since times before cloud computing, DevOps or mobile began to make waves as industries realised the financial risks of not properly investing in technology. The world is already technology-led, and this year has only accelerated the urgency of transformation. For tech-led scale-up businesses, this means competition is only going to increase, and it’s going to come from both established enterprises that finally reach digital modernisation, and incumbent scale-ups which rapidly deliver mature digital products.
At Godel, since March we have observed two paths in software development strategy upon which businesses have diverged. On one hand, some have pressed pause on R&D initiatives and re-allocated their teams to focus on core development and maintenance. It has seemed that this trend aligns with companies previously challenged with technical debt: the need to support existing system performance only rising in line with online demand and budgetary strain. This has been reflected by research that states overall software development activity has declined almost 30% due to COVID-19. This data comprises of stats from developers at enterprises as well as SMEs (suggesting that this avenue is mostly taken by larger companies, which have larger developer headcounts).
On the other hand, many scale-ups have found opportunities for software development during the crisis, rather than threats. This year’s Tech Track 100 report provides impressive case studies for this, where business have pivoted and scaled their product or service offerings to support the “new normal” in their respective markets. These brands have already made waves with astonishing growth in recent years, and as they continue to do so in 2020, they attribute success to being agile, innovative and highly reactive to market shifts – all underpinned by their technology. It isn’t all plain sailing, however – as any tech leader in a scale-up environment will know, the path of fast growth is fraught with obstacles.
Navigating The Storm
In the context of market disruption, agility means adapting to new circumstances without great difficulty. Shifting priorities is simpler when something holds the business together – this should be its mission, culture and values. Scale-ups are unique in how they often cite their “start-up culture” as invaluable, even when they grow beyond four-figure headcounts. This culture usually means every employee is passionately focused on a clear mission statement, which only changes when the needs of the customer change. When this mindset filters into technology teams, it lets autonomous, quick and innovative teamwork thrive. Having everybody be constantly, relentlessly focused on the business vision is how scale-ups can find avenues to achieve growth without diverting prioritisation of the customer.
UK scale-up funding has consistently topped £1 billion every year since 2014. Investors and government bodies alike recognise that these businesses are key to the UK economy, and they know that technology is the driver behind business growth. As a result, massive pressure is placed on the shoulders of scale-up tech leaders to deliver software roadmaps on (or ahead of) time. Achieving international growth, customer acquisition or elusive profitability can’t happen soon enough – the competition is always one step ahead! Dealing with this requires a fine balance between development speed and quality, where neither can be lost in lieu of the other. Ways to achieve this vary – our CTO discusses automation as a factor in this post – but ultimately it’s necessary because sacrificing quality leads to unhappy customers, and sacrificing speed leads to customers choosing the competition.
Teamwork Makes The Dream Work
A tech leader is only as good as their team, but from conversations with hundreds of UK tech leaders we know building and retaining in-house teams can be a more convoluted task than actually writing code. The developer talent market has seen an interesting shift in recent months. As companies across the UK have been forced to restructure and lose staff from all departments – including technology – there’s been a boom in available recruits. For scale-ups looking to build their core software engineering team, hiring now may seem like the perfect opportunity. Yet when we look more closely, the true nature of the skills market is not quite as it seems.
It has become clear that this year that when job cuts have been made in tech departments, it is often unfortunately to the less-experienced staff. Combining the considerations of ongoing market volatility and absolute need to deliver high-quality software, onboarding new developers must be handled more carefully than ever now. When the business has a clear roadmap, established engineering principles and a solid onboarding plan, hiring greener developers can be of great benefit as they bring new perspectives into the team.
When these components aren’t firmly in place – which is often the case for scale-up businesses that are on a path of constant innovation – the alternative is investing in seasoned experts who have both technical prowess and previous experience delivering software to relevant markets. However, the developer skills gap has not changed so drastically this year that senior talent is now easily available across the UK. Either way, ultimately the wrong hires lead to higher attrition which has an especially negative impact on morale and productivity in smaller scale-up businesses.
There isn’t a prescriptive hiring strategy, since every company is on a unique growth path – as we’ve highlighted in past articles a team built from people diverse talent backgrounds is often the best recipe. A “talent ecosystem” comprised of individuals who show multiple qualities – team leaders, tech geniuses, innovators, product people, et cetera – is capable of self-supporting and delivering innovative, well-tested and high-quality solutions. Skills and experience aside, the bottom line to success is hiring people who fit in with the company’s culture and can exemplify it in their work, because people who are passionate about the company’s success are immeasurably valuable during challenging times.
Stick To The Plan: Change!
2020 has taught businesses plenty of lessons so far, with many more yet to be learned. From a technology perspective, the outstanding conclusion has been that delaying digital transformation, or going about it with improper planning, leads to disaster. Microsoft has estimated that the impact of 2020’s digital shift will lead to nearly 100 million new software vacancies worldwide by 2025. It is clearly urgent that businesses invest in change now – but rash decisions simply can’t be made, even in the face of markets that have changed so drastically in just a few months. As scale-ups continue to scale up, sustainable growth must be their definition of success – and for technology leaders, this means nothing but focusing on building an intrinsic understanding of their end users, keeping an eye on long-term market strategy, and delivering solutions that go above and beyond customer needs.
Godel builds high-performing software engineering teams that form part our clients’ in house teams. Working with UK brands for long-term partnerships, including fellow Tech Track 100 names such as Feefo, MVF and Crunch, we help deliver mission-critical software roadmaps that keep them ahead of the competition and on a path of rapid growth. Godel teams are flexible, cross-functional and scalable. Whether the engagement is centred on business transformation, innovation, or both – we provide access to senior, experienced talent and two decades’ experience working exclusively in the UK market. Product mindset is core to how we deliver software: understanding and living our clients’ business vision in our agile partnerships is how we ensure results are customer focused. If you’d like to talk to Godel, get in touch with our Manchester team.
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