Monday The Harbinger

Thank you for subscribing and being part of this community. I have gotten great topics this week here and on LinkedIn that I will incorporate into upcoming posts. I appreciate the time and thought you all have put into making this a better community for everyone.

I am embracing the content changes that people request because they match the reality around us. The data field is challenged to adapt to increasing expectations for business impacts. Data science is seen as a driver for growth and innovation. Projects are being run leaner with greater oversight from senior leadership.

The backdrop for all of this is the stock market and broader economy. I have been talking about the macro factors for several months, and we are at the downturn's Monday. During the dot com bust, the last time we saw tech company valuations detached from reality, it took two-and-a-half years for shares to find their bottom.

No one is predicting a severe downturn, but we are still at the beginning of this cycle. Investors could need another six months to find fair values for tech companies. After almost ten years of boom, it is hard to think about share prices falling further than they already have.

It isn't easy to imagine companies going out of business during good times. Easy access to capital can overcome the worst-run companies and products looking for a use case. Now several companies are looking to get acquired because, if they don't, the alternative is closing their doors. There are big names with less than six months of cash in the bank. Some will not find buyers, so the end of this year and early next year will see some high-profile businesses go under.

In some ways, this is good news. Many technology spaces are overcrowded. They will benefit from mergers, consolidations, and the weakest players failing. The winners will be more stable and start growing again.

This cycle will be ruthless. Businesses need teams to produce value, but laggards have built teams to produce technology. Technology does not require immediate utility when VCs and investors are focused on long-term potential. While there is a steady innovation pipeline, those businesses can get away will multiple products that fail to thrive.

Preferences have shifted to near-term revenue growth, free cash flow, industry leadership, high customer retention, and efficient growth. Strategy and execution define the flight to safety. Companies built to deliver technology in search of buyers are in danger of going under.

The ancient Greeks had several words for the same emotional category. They created granular definitions for specific types of love, sadness, and fear. Deimos was the adjutant of Mars. He was the harbinger of war and the embodiment of the fear of war. Startups are at war, and most tech companies are moving to a war footing. This will spread across industries by the end of this year.

On the Monday evening of this downturn, tech companies and their people feel Deimos. When people are afraid, everything they see reflects their fears. I wrote a LinkedIn post last week about the importance of applying technology to create value. This is the only in-demand capability right now.

The fear response was overwhelming. People read the post from the US to the EU to Asia and responded with their fears. They have been part of companies or teams producing technology in search of value. Now they are feeling the walls closing in. Until I started reading the comments, I did not realize how deeply the fear permeated those organizations.

They have been challenged to deliver value for the last three to six months and are probably struggling to execute. By now, most of those teams have new leadership or have gone through an early round of layoffs. You've known this was coming, but for them, it is an abrupt shift in focus, and most are not adapting well.

There is a long learning curve for businesses transitioning from technology-driven to strategy-driven. Businesses lack the knowledge to successfully mature in the short timeframe they have. This is an opportunity for you because you have the blueprint.

You understand the process from business and technical perspectives. You can articulate a vision and help with the strategy planning process. Your background as a data professional gives you a strong connection to implementation and execution. This is what businesses need now to succeed.

There are not many of you, and demand will grow from tech companies this year to traditional businesses next year. From now until the end of next year, there is a lot of money to be made for technical strategists. Take advantage of Deimos, which is driving the urgency. Businesses and data organizations want to survive the downturn. Without you, that will not happen.

Look to coach data professionals on transitioning from technology to value-centric. Many will soon be out of work with few prospects. If you create an internal training and mentorship program to upskill this part of the data workforce, you will have a pipeline of low-cost talent. That is critical to achieving efficient growth. Talent will be one of the highest costs because few data scientists are value-centric. They will be challenging to find, attract, and retain. Upskilling is always a more cost-effective route.

If you are in a business that is hesitant to make a move to value over technology, your job prospects are excellent even in this downturn. Companies are still hiring aggressively for senior-level data talent with a track record of producing value. Hiring will tighten significantly near the end of the year, so now is an excellent time to evaluate your near-term future.

Learn from this downturn. Study it. Write up the leading indicators. Track the cycle. Think about what you would do differently if you knew how it would play out. There will be another downturn in five to ten years. See it coming and put your plan into action. You will minimize the negative impacts and come out the other end positioned to thrive.

More than anything, watch the opportunities that are created in a downturn. During boom times, hope, potential, and hype create opportunities. During downturns, Deimos creates opportunities. Tech companies have seen 50% to 90% of their valuations erased since the beginning of the year. They are afraid of what happens if this continues until the end of the year, let alone the middle to end of next year.

Businesses need new leadership and consultants who can guide them through the downturn. They need people who can execute. This is a great time to be value-centric or a technical strategist. Take advantage of the opportunities.