Are start-up software companies capable of sustainability

Let us begin with the typical age of Software companies. Since, 2021 is the year of sustainability. Everything should be or is becoming more Sustainably focused.

The future of sustainability is bright. As is the future of Software. Recently Insight Partners published their Valentines Letter what they love about Software investing. However, the word “sustainable” is not mentioned once. As VC money is eating the world (not Software!) the thoughts from entrepreneurs are necessary to point out about why the future of software must be a sustainable one.

Can you guess how old these traditional players are?

- SAP — 48 years

- Microsoft — 45 years

- Apple — 44 years

- Google — 22 years

- Atlassian — 19 years

-Palantir — 18 years

-Facebook — 17 years

Although unfortunately most tech companies don’t get this old. So let’s focus for a moment on the reasons why:

1. Most start-ups fail. Surprisingly, the reason for this is mostly due to “timing”according to John Doerr.

2. Not everyone is the next Oracle, SAP or Atlassian. The need of an Investor Exit an open Invitation for M&A (Mergers and Acquisitions). Investors as Lawyers love M&A. Most customers don’t as they mostly pay the price for it.

3. Understanding the Market Size/Value: If you speak with most Investors, they are looking at the Exit even before they understand the true market size or even the value of your product.

4. Limited Resources: As most VC funds are small and their networks are limited, M&A is a typical exit, and of course that is also due to the LPs behind the fund (in simple words: the investor’s investors!). Not many make it to an IPO and that is clear from the beginning, indeed an IPO is not neccessarily a suitable goal for many types of companies.

Mostly M&A is paid by the customer. Even Rupert Murdoch made this “secret” recently public when Bertelsmann paid a fortune for beating him in a deal (about buying Simon Schuster).

6. Investor’s playbooks (not matter if PE or VC!) in the past these had a lack of being long term sustainably focused and in return impacted investments that could have and would have changed the world.

7. Financing Issues: Most Ecosystems get their money either from Pension Funds (Silicon Valley) or from the Government (for economic diversification). This has a huge impact on the wider Ecosystem of Start-ups and their ethicalapproach to sustainability.

8. The Big Picture: Start-ups have issues in identifying their “Big Vision” while believing in anAlgorithm is neither a vision nor a competitive advantage.

9. Tech shouldn’t be an acronym prove area. If we focus for a moment on the substance which especially in Regtech is important they don’t use the usual AI/ML buzz (buzzwords?). And, ask how does the Tech help and benefit my business while scaling and growing our organisation. The Tech behind Regtech is mostly around 10 Areas.

• Cloud Technologies

• Graph Analytics/ Network Analytics

• DLT

• NLP/NLG

• Machine Learning

• Artificial Intelligence

• RPA

• OCR

• Recognition of Voice & Face

• Quantum Computing (very hot area!)

To create a better and more sustainablelong-term future every ecosystem will have to look within.

Especially those who need long term diversification from other industry areas and natural reserves like the UAE. Thus, it is less about getting eating by your competitor but more about understanding the life cycle and sustainability of your company itself as an ecosystem involving employees and stakeholders to financial ongoings and revenue streams.

If you ever have the chance to see Giovanni Segantini a masterpiece of Art in the Museum of St Moritz it shows the typical stages of nature (that also applies to companies).

Birth, (werden) Life/Being (sein) . Death (vergehen).

For every founder, the vision should be to create a sustainable company rather than one that just out- survives its competitors.

We at DX Compliance understand this and strive inbeing a sustainable high growth customer focused Tech Company based in Ireland,UK & UAE. Recently we joined the Hub 71 Tribe. A bunch of Visionaries that believe in Abu Dhabi’s thriving Tech & Innovation Scene and we are all together on the Mission to make that happen.