As we look at the current situation and try to plan what’s ahead, an analysis of the 2000 downturn and how that impacted the Enterprise Software space may prove helpful.
Clearly the situation in 2020 is different to 2000 in terms of the cause. However, are there lessons that can be learned from the tech crash of 20 years ago to help us through today’s crisis?
Let’s go back to early 2000. The Enterprise SaaS sector was called Enterprise Software or ASP in those days!
Most dot-com companies incurred net operating losses as they spent heavily on growth and advertising. The “growth over profits” mentality was in full-flow!
The tech sector was booming with stocks flying high. The B2B Software sector was full of thousands of on-paper millionaires!
March 10th 2000, the NASDAQ stock market finished trading at 5,048.62 – the peak.
B2B Software companies had been hiring like crazy, opening up new offices all over the World to take advantage of “e” spending!
Then the crash!
On April 14, 2000, the NASDAQ index fell 9%, ending a week in which it fell 25%.
At its lowest in October 2002, the NASDAQ-100 had dropped to 1,114, down 78% from its peak.
The Enterprise Software companies really started to feel the heat during the late Spring and Summer 2000:
- Enterprise Software companies made mass lay-offs
- Recruiters, were inundated by hundreds of CVs on a weekly basis
- Many Software firms went bust or downsized massively.
- Satellite or regional offices were closed down all over the World.
What happened next?
- It became really tough to sell enterprise software!
- Many US Software firms closed regional offices in countries like Germany. This had a major impact on buying software from US headquartered tech firms post 2000 in countries such as Germany!
- Many Enterprise Customers and had been burnt by the over-selling of fluffy ‘e-solutions’.
- SaaS Employees smartened up! During the Internet boom, many tech staff ditched their suits and ties and it became trendy to wear polo shirts and jeans! Post crash, the suits and ties suddenly reappeared as the market toughened up! Will this happen again post 2020?
- It suddenly became best practice to drop the letter “e” from the name of the solution! ie: eProcurement and eCRM reverted back to simply Procurement and CRM!
- The Enterprise market suddenly only bought solutions that were mission critical (Security and compliance related software as examples)
- Software firms had to demonstrate a guaranteed ROI of their solution to win orders
- The fluffy, nice-to-have solutions became virtually impossible to sell
What can we do to help us through this?
As a Headhunter, the advice below is coming from a hiring perspective:
- Smarten up! We are more visible than ever. It is going to get really tough so look your best when presenting yourself
- Most calls now our video based! Look good and modern! Have an awesome backdrop.
- Wear your smartest clothes and look sharp!
- Adapt. Many Execs have more free time being home-based. There is so much online content out there! It is a great opportunity for self-learning and improving those selling / marketing / customer success skills!
- Work on the CV. The job market is going to be tough and no longer candidate-driven. It will get highly competitive to land your next job
- Having a great CV and taking career / coaching advice is massively important