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  • Manfredi Sassoli

2024 a year for Growth

As I do at the beginning of every year, I have read about a dozen forecasts for the next 12 months.


This year more than ever I’ve noticed a patterns of caution and confusion.


I know we don’t need more predictions and that is why I have never dared write any. This year however I have decided to make an exception. Having experienced three economic crashes, (the first in 2000, when I dropped out of uni to join a Tech start-up), I feel I have something to say.


I have almost two decades of experience as an operator and 8 years as an angel investor. I have been a long term observer of Tech trends and an avid learner of innovation strategies and patterns. That is precisely why I think there are at least four distinct reasons for optimism in our area of work, at the intersection of Technology and Growth.


1.     A great time for smart investors


I am aware the overall economic climate isn’t the most favourable and that might not change in 2024.


2023 showed us how history likes to repeat itself and how we repeatedly fail to learn from it. In 2000 Webvan, a grocery delivery website went bust and it’s hailed as one of the key case studies of overhyped and overinvested businesses of the time. In 2023 we have seen hundreds of millions of investment go up in smoke in, you guessed it, grocery delivery apps, (see Getir, Gorillaz and Zapp in the UK).


We have also seen companies like ETX, Silicon Valley Bank, Smile Direct Club, and WeWork file for bankruptcy. In the US the combined funding of all the start-ups that failed in 2023 amounts to $27 billions, according to startup tracker PitchBook.


Clearly not all Tech investments pay-off, particularly when there is no tech in Tech. There are different reasons why so many companies failed, a big one is the lack of an edge. Some of these companies were not well managed, some were even based on fraud or poorly calculated risk, but many simply lacked the competitive advantage that would eventually lead them to profitability.


Recently I have seen a lot of focus on profitability, unfortunately short term profitability does not equate to long term success. Companies who can subsidize their development with VC capital in the peruse of a strategic advantage will be best positioned to have higher profits over time. Investors who can understand the critical difference between revenue creation and value generation should now be in a great position – as start-up valuations are much more reasonable compared to 24 months ago.


Smart investments in 2024 should bring a healthy and balanced view to the whole ecosystem.


2.     Less competition


In recent years the abundance of funding has inflated marketing costs. I remember talking at the start of the year to a successful e-sports company founder who was complaining about how a stew of new competitors with a much inferior product and deep pockets were creating noise in the market. While none of the competitors specifically concerned him, the cumulative impact of 4-5 new players in their market of reference was leading to an erosion of their market share and profitability.


I have personally seen the cost of traffic rise by over 20% YOY on the major advertising channels, as well as an increasingly high competition in content production.


This should come down, and we have already seen signs of this in 2023 – CPCs are decreasing: this should allow all companies with good products to improve their margins.  


There are also a few new channel opportunities that are worth monitoring:


-       The integration of retail media (Amazon) and Social media, as multiple partnerships have been struck in late 2023

-       Connected TV: this is an expanding channel with huge scale potential that leverages creative capabilities that are similar to those developed by many companies advertising on platforms like TikTok and Youtube



3.     Growth with a capital G will be a priority for all businesses


Growth with a capital G is the discipline developed at the intersection of marketing, product and engineering that has been the engine behind many of the big Tech successes of the past decade.


In simple terms Growth is a structured framework, (a growth model), that helps teams align and focus on clear priorities using a rigorous scientific approach and maximising speed of experimentation. The outputs are:


-       Cheaper cost of traffic

-       Higher conversion rate

-       Better monetisation

-       Stronger retention rate


This all leads to higher profitability. While over the past ten years this higher profitability has been used to fuel further growth, this doesn’t have to be the case anymore: profits can be pocketed.


Companies can reach profitability by letting go of their staff, but that is never a strategy for long term success. On the contrary improving efficiency with smart experimentation acorss the four levers mentioned above can lead to profitability without the sacrifice of volume, quality or future growth.


4.     AI (of course)


We have all read everything and the opposite of everything on this topic.


If we pattern match with previous technologies, we see there is usually a gap between the time a nascent technology comes to market and it becoming a mass channel for reaching customers e.g. the first iPhone came out in 2007, but it only became a mass device in 2010 and Instagram app only became popular around 2012.


AI has created no new channel for reaching consumers at scale and it won’t do so in 2024 either, but it will deliver process innovation.


This will touch creative production, data analysis, content generation and more. Smart companies are already finding new ways to improve ROI from old channels and more of this will happen this year.


By nature I am not an optimist and I am not saying 2024 will be a great year for our economy, but I think the outlook can be moderately positive and that’s probably the most critical factor: a favourable economic shift can only happen when people can picture favourable outcomes.









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