What to do in Turbulent Times

Doug Zeisel, TCV Growth Partner -

No doubt about it, when it comes to business conditions these are turbulent times.  We really don’t know what the impact the DJ Trump disruption team will have on our economy and how it will filter down to our businesses. What should we do now?

It depends. It depends very much on what industry you are in. For GovCons, it is looking pretty scary because of cut backs in programs and grants. However, it may also create opportunities for those who are able to bring efficiency to the agencies they typically serve. So as the dust clears, find who will lead the department you have provided services to and find out if an RFP to streamline operations or consolidate information might be forthcoming.  After all efficiency is the focus of DOGE.

Maybe even suggest that you can help?

For Cybersecurity, we have witnessed many publicly traded companies reducing their forward revenue guidance and many are trading at all time lows.  This implies that smaller firms offering cybersecurity consulting and implementation will also see revenue reduction because  many organizations may cut back on spending for IT related items, including upgrading or implementing security solutions. Where does this leave cybersecurity focused businesses? Unfortunately even if the economy goes into recession, the threat of cybercriminals will continue to exist. So the challenge will be to convince prospects that cutting back on implementation of threat assessment and remediation is a poor choice. In fact, it would be a great time to partner with a firm that implements AI to streamline operations and reduce cost so their prospective clients.

For services companies, particularly B2C companies, expect consumer hesitancy. That means they need to refocus on profitability by closely controlling costs. Hopefully they are monitoring a monthly budget to watch margins and fixed costs.  B2B service providers can also expect hesitancy of prospects to sign on to their services. Be sure you have a clear value proposition and that your marketing clearly communicates that value to your prospective clients.  Be sure to differentiate your company from your competition and ensure the cost of your services is easily adsorbed by the savings you produce.

Manufacturing companies are expected to see a resurgence of demand if the new tariff regime reduces imports.  Of course they may be impacted by tariffs on components that they import. If so, they need to do reanalyze your product costs. Activity based costing will be a key aspect of your analysis and finding ways to streamline (automate) processes will be essential to maintaining profitability if revenues decline.

High Growth Tech Companies need to pause their focus on growth at the expense of cash flow. Reason – investors are seeing their net worth rapidly decline with the recent and accelerating stock market declines.  It will be harder to get that series B or C round and VC’s will be even more cautious.  These companies need to manage their cash carefully to extend their runway!

Common Denominator

For all organizations, controlling costs will be essential to maintaining profitability. And operating efficiently is ever more essential to controlling costs. This means evaluating your processes and procedures to see if there are ways to incorporate custom software solutions or if AI solutions can handle tasks that are now being done manually.  And if you maintain sensitive customer data, you should not ignore cybersecurity, the risk is too great!

If you don’t have time we can help. We partner with firms such as Orases for custom software for efficient operations and Shield7 and Optic Cyber Solutions for cybersecurity assessment and remediation.  if you want an assessment of how to streamline operations, don’t hesitate to contact us. Doug@TCV-Growth.Partners