Comment: The loss of focus contributing to tech job losses

Patrick Kavanagh, Co-Founder of Atlantic Money

Mass job losses continue to take place across the tech industry. Lay-off tracker, TrueUp, estimates there were over 70,000 job losses in the previous quarter. 

While it’s easy to blame external factors, such as the lasting impact of the Covid-19 pandemic, macroeconomic challenges and a difficult fundraising environment, an important strategic factor has been largely ignored – focus. 

Initial fintech and tech challengers disrupted the status quo by bringing a single, industry-leading product to market which dramatically improved user experience, value for money, and technical capabilities.

But in a battle to attract VC dollars and stratospheric valuations, many have lost their focus and carelessly abandon the product that made them great; instead opting to desperately chase the latest product trends with little to no inspiration, and hiring hundreds of staff to embark on these vanity projects.

It appears that every fintech today has the same goal: becoming the next ‘super app’ and controlling every aspect of a customer’s financial life. The super app pursuit is vague but also futile, as these companies end up neglecting their most frequent and loyal customers, many of whom signed up for the flagship product, not for the awkward and unrelated product appendages. Furthermore, these loyal customers often generate the majority of the revenue for the business, and end up bearing the costs of development of these vanity projects disproportionately, with little reinvestment in their core use case. 

If tech companies really want to alleviate their current staffing pressures, they should take a fresh look at all of their business lines and services, and ruthlessly cut those that don’t bring value to their most engaged customers. Otherwise, once loyal customers will opt for second-generation disruptors, resulting in more financial pain and lay-offs for super-app hopefuls.

Also published in City A.M: You can’t always be everything.