Winston Churchill once said that, ‘true genius resides in the capacity for evaluation of uncertain, hazardous, and conflicting information.’ And if you were to nominate anyone as a master of decision-making in uncertain times, then many would say he’d have been a pretty good bet. We may not be facing wartime conditions today of course but some believe we’re dealing with the toughest challenges as a nation since the last world war as a wide range of significant political, economic, social and technological factors converge.
Dominating the headlines is the uncertainty swirling around Brexit and what it might mean for us as a country and for every business that – directly or indirectly – will be impacted by the outcome of the settlement between the UK and the EU. Protectionism is also back in the news as the US looks to impose tariffs in an effort to rebalance a sizeable trade deficit. Meanwhile regulatory demands such as the newly introduced General Data Protection Regulation (GDPR) have placed significant new demands and responsibilities on every business that holds client data. GDPR should, if any reminder was needed, emphasise the real and present danger of the cyber threat not just in terms of loss of client data but also IP theft, and the possible reputational and operational damage from a successful hack.
To stick or twist?
For many of the fast-growing tech businesses listed in the Hiscox Sunday Times Tech Track 100, these will be just some of the uncertain macro and micro factors they’ll be juggling with as they look to take difficult investment decisions such as whether they should expand employee numbers or take on new premises. For some the investment choice has been clear cut. Business finance provider Ebury for example – which ranks at 73 in the Tech Track 100 – has opened an office in Bucharest this year and aims to open a total of 10 international offices and employ 1,000 people by the end of 2018. While Currencycloud – a global payment platform provider at 84 in the Tech Track 100 – has plans to double the size of its New York Office and open new outposts in Amsterdam and Singapore. They’re clearly businesses not afraid to make the decision to invest.
I believe that decision when to invest comes down to three factors. Firstly, what is the demand for your product or services; clearly if there is strong demand and the pipeline looks good, you can invest with a certain amount of confidence. Secondly, what are your personal ambitions? Some entrepreneurs would have started out thinking there is an optimum or ideal size for their business – they might not want the extra responsibility or risk of taking on more people for example beyond a certain size. And thirdly, perhaps the most important, what does your ‘gut’ say? What do you think the outlook for your business is and does it feel right to take on new premises or take on more staff? Many entrepreneurs would have learned the hard way that listening to your gut feel can ‘trump’ – pardon the pun – many of the business uncertainties that surround making such a decision.
The future is bright
For the tech industry particularly, I think, despite the uncertainties, the future is bright. Again, I’d quote some figures from this year’s Tech Track that shows the top 100 companies have grown their sales by an average of 99% a year over the last three years, with a combined total turnover of £3bn. These businesses and others like them have the advantage over traditional manufacturing operations that there are not always the same barriers to entry in terms of capital outlay – often it’s just some office space and an internet connection. Tech businesses can also build a global footprint very quickly – again, look at the proportion of the Tech Track 100 who generate revenue overseas (72%). And finally, they are playing in a space – technology – that is fast transforming a huge part of everyone’s lives at a rate not seen since perhaps the birth of the industrial revolution.
Despite the threats and the uncertainties, I believe there are more opportunities out there for the tech businesses who are prepared – by being well informed and working with the right advisors where necessary – to take decisions and manage the risks. The Hiscox Sunday Times Tech Track 100 is proof positive of businesses doing exactly that. As a risk taker, no doubt Churchill would have approved.