In 2023, technology companies are facing pressure to shift their focus towards generating profits. The swift pace of change in the technology industry is remarkable, not only in terms of new product developments. But also in how changes in the economy can quickly impact the priorities of tech firms.

Old focus on growth

In 2021 it was all about growth at all costs.

This growth at all costs approach fueled excesses like sign on bonuses. Because companies were struggling to hire due to a labour shortage that was partly exasperated by the great resignation. Amazingly some people who received sign on bonuses in 2021 were laid off in 2022.

New focus on profits

The year 2023 has brought about a vastly different environment, characterized by widespread uncertainty and significant challenges for the tech industry since the latter part of 2022.

The industry has seen an increase in layoffs, a reduction in venture capital, and a diminished IPO market. In response to this new environment, venture capital firms have shifted their focus towards profitability, moving away from the previous emphasis on growth.

Furthermore, public markets have also shifted away from prioritizing revenue growth as the primary performance metric. Investors are now placing greater importance on strong business fundamentals like differentiating how you sell and profitability.

So how do tech companies adapt to this new focus on profits?

Simple. Do like most other industries do it. Build great products that people and companies need. Sell these products for more than they cost to build.

It really is that simple. No magic just basic business fundamentals.