Strap in, enterprise customers! Here's what to expect from well-funded TA tech companies as the VC funding party ends, and how you can make wiser choices.
The TA Tech party is over
Once upon a time, in the land of Talent Acquisition Technology, a handful of companies danced their way into the hearts of venture capitalists. Fountain, Sense, Paradox, Phenom, Gem, Eightfold.ai, and SmartRecruiters found themselves swimming in a pool of over $2 billion in VC investments between 2020 and 2022. But as with any good party, the music eventually stops. The changing VC landscape might leave these companies high and dry, causing a few hiccups for their enterprise customers. So, buckle up! We're about to explore the twists and turns of how dwindling VC funding will impact these TA tech darlings and what you, dear customers, should prepare for.
"Growth at All Costs" – A Recipe for Disaster
When you're VC-backed, it's all about making it big, fast. But this "growth at all costs" mentality can set the stage for some nasty pitfalls:
- Customer support who? Startups in a rush to grow might leave their clients high and dry when it comes to providing support.
- Sales, sales, sales! Desperate for new clients, these companies might forget about their existing customers.
- Too cheap to last: Enticing discounts and low prices might attract clients, but can these startups survive on such thin margins? Doubtful.
- Half-baked features: If you're racing to grow, there's no time for perfection. Say hello to buggy, untested features.
- Short-term gains, long-term pains: Focusing on the now and ignoring the future? That's a ticking time bomb.
The Great VC Funding Hangover
You know that feeling when the party's over, and it's time to clean up? That's where the talent acquisition technology space is heading. The once free-flowing river of VC funding has turned into a mere trickle, leaving startups with some serious headaches as they try to maintain their growth and innovation.
The After-Party Effects
As our beloved TA tech companies nurse their VC hangovers, enterprise customers might notice a few side effects, including:
- Weaker Support: With fewer resources, these companies might skimp on customer support, resulting in longer wait times and less-than-stellar service.
- Reduced R&D: When the funding well runs dry, R&D might take a hit. That means slower innovation, fewer product updates, and a less competitive edge in the market.
- Redundancies: Companies looking to stay afloat might have to trim the fat, resulting in job losses and a loss of valuable institutional knowledge.
- Higher Perceived Risks: Customers could become more cautious about partnering with TA tech providers struggling financially, fearing it may impact their own business operations.
Navigating the Talent Acquisition Tech Rollercoaster
Fear not, enterprise customers! Even in the face of a slowing economy and reduced VC funding, there are ways to find better value and stability for your investments in recruitment software:
- Embrace Open API: Look for platforms with an Open API and the ability to cover a wide range of features. This way, you can mix and match tools to create the perfect blend for your needs.
- Customer-funded or Bootstrapped FTW: Instead of relying on VC-backed companies, consider those that have grown organically or through customer funding. They might just be a more reliable and sustainable partner for your talent acquisition needs.
The Grand Finale: Recommendations for Enterprise Customers
To help you steer clear of the rocky waters of VC-funded TA tech companies, customers can look for vendors that are bootstrapped and customer-funded like Talkpush, or they go with more established vendors like iCIMS, which comes with an Open API for easy integration with other systems, and with the backing of large Private Equity investors.
Given the radical market changes that AI is driving, you will want a TA Tech partner that can stick around for many years and weather the storm. By focusing on platforms with Open APIs, comprehensive feature sets, and customer-funded or bootstrapped growth, you can invest in a reliable and sustainable partner for your talent acquisition needs for years to come.
Want to see how Talkpush can help you build a cost-effective team through task automation?