* Rafael Cichini is CMO & Business Director of Squadra Digital Unicorn, this mythological animal that symbolizes strength and purity, is a constant figure in fairy tales and fairy tales. But it also represents the goal of the vast majority of entrepreneurs who create startups around the world. In these cases, being a unicorn represents an organization with market value […]
* Raffaele Cichini is CMO & Business Director at Digital team
The unicorn, this mythological animal that symbolizes strength and purity, is a constant figure in fairy tales and fairy tales. But it also represents the goal of the vast majority of entrepreneurs who create startups around the world. In these cases, being a unicorn represents an organization with a market value of more than $1 billion. Several companies have succeeded statewhich only increases the desire and will of those who are walking the path.
The problem is that, to get there, most of them adopt a growth strategy without criteria, which has inflated and unbalanced the market, requiring a readjustment in processes and in the way of conducting business. In short: you have to become a camel, an animal capable of adapting to extreme conditions without great resources.
The first half of 2022 has been a real shock for many Brazilian startups, including unicorns. A survey of Quarter shows a 44% decline in investments in the half-year comparison, falling to $2.92 billion at the end of June. However, from January to June 2021, this volume reached approximately $5.25 billion. Additionally, there was also a 21% decrease in the number of rounds played.
No wonder, a wave of layoffs has taken over the market, frightening professionals and specialists. Most of the country’s most popular startups have made some sort of employee cutbacks. Some even cut more than 200 employees in the first six months of the year. A situation hitherto unknown to many.
This scenario is the result of years of action based on a growth-at-all-costs model. To give you an idea, again according to a survey carried out by Quarterinvestments in startups have increased from $452.2 million in 2016 to $9.4 billion in 2021. An appreciation of almost 2,000% in just five years, even with the pandemic in the midst that could reduce this appetite.
And what does a company do when it has a lot of money to invest? Simple, go shopping. In this case, it implies the acquisition of new technologies and mainly the hiring of good professionals to ensure the progress of all processes and objectives. There has been a fierce onslaught of startups entering the job market looking for the most qualified people available.
In order to reach the state unicorn, these companies have inflated the hiring of professionals. It’s not even about the above-average salaries and many built-in benefits, but about other situations that are not common in the technology area. Several organizations, for example, have paid exorbitant amounts for developers to quit their jobs and take on new jobs. That’s right, bonuses just to ensure the signing of the contract, which we used to see more in football.
The point is that the Brazilian labor market was not prepared for this real bubble. In addition to too few qualified professionals for too many vacancies, this dynamic also generated competition and money inevitably ran out one day. To become unicorns, they overspent, ignoring a basic principle of business administration. The wave of layoffs, therefore, is only the consequence of these wrong choices.
Lessons from the crisis
Fortunately, no crisis lasts forever. The retraction of startups today can serve as an important lesson for which they intend to stand out for in the future. The camel joke is valid. Before dreaming big, it is necessary to create a structure capable of surviving the challenges that the market imposes, identifying how to make the most of resources – technological, financial and personnel.
The way out is to adopt a hybrid model for hiring employees. Instead of competing for available professionals to form a team who are 100% dedicated to your business, why not hire partners who can provide a full team of technology specialists? As well as cutting costs, as it is cheaper than paying all benefits and salaries, this team has all the technology foundation needed to support the healthy growth of your product or service.
This does not mean that the startup should focus on “outsourcing”. On the contrary, the “hard core” of the company, i.e. the professionals who make the decisions and command the processes, can devote themselves totally to it. Professionals working in project development and construction can be provided by organizations that already have the competence of technology that supports the different phases of an enterprise.
The important thing is to understand that the model of growth at all costs is no longer sustainable. The startup market has finally matured and like every other segment it has discovered that the blue ocean is not forever. There are always challenges and crises that need to be overcome and good people management is the most recommended way to overcome them. Knowing how to deal with these problems is what differentiates a successful organization and makes the camel a beautiful unicorn in the future.
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Source: Terra
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
