A Recruiter’s perspective on the local Tech industry

Today over at BCtechnology.com, guest columnist Don Safnuk of Corporate Recruiters shares his thoughts on the economy and how it will affect the local tech industry.

Since 1972, I have been both a CEO and board director of technology companies; I have co-founded a firm focussed on funding technology companies, and I have also been a technology recruiter. It all makes me an active student of the BC tech sector and, while this doesn’t enable me to predict the future, it has given me a chance to observe what history has taught us about previous down cycles.

  • For a surprising number of companies, economic downturns are non-events.
  • Economic cycles and financial dramas will not last forever, so while survival is #1, you must not take yourself out of the game.
  • Some companies are going to profit greatly during the downturn and some well-positioned companies even more so during the early recovery stage.
  • Small tech companies often struggle over hiring the right sales reps. Misaligned product experience and skill sets are never ideal scenarios, but they are particularly problematic during tough economic cycles.
  • If you aren’t cash flow positive, find a way to make your money last 6+ months longer.
  • If you have access to capital, it is a great time to build an early stage company. Talent, office space, and third-party services are all more plentiful and costs tend to be lower.
  • Emerging companies are probably 5 to 8 years from an exit, so don’t waste a lot of energy worrying about the liquidity strategy.
  • If you have 12 – 18 months cash, don’t expect your shareholders to abandon ROI expectations.
  • Watch the big companies. They tend to cut costs earlier and aggressively jump back in sooner. Sometimes little companies take too long to get costs down, and then wait too long to be assertive when the market is recovering.

Safnuk’s points are all excellent – I particularily like his last: “Watch the big companies”. We’ve covered plenty of lay-off stories on Techvibes over the past couple months and I have no doubt that a handful of the companies reported on were smart to cut early and will come back with a vengance when the market recovers.