By Scott Dawson
DECTA
The start of this year brought with it legitimate concerns about the state of the global economy caused by a culmination of issues. A worrying result has been a plethora of experts predicting a major recession on the horizon with businesses struggling to adapt to the constantly changing landscape. So, what can companies do to drive growth in this uncertain economic climate?
Many businesses have responded by adopting and developing new technologies and business models in an effort to stay ahead of the curve, but this rush to innovate has come at a cost. Numerous companies have lost sight of the fundamentals of doing business and are experiencing significant challenges. Many well-placed pundits are now advocating for a back-to-basics approach that focuses on reducing costs, freeing up cash flow, increasing speed and reducing complexity, all while staying within regulatory limits.
This can seem like a counterintuitive approach to business. It has always been assumed that the only recipe for growth and forward moving within a market is to innovate, but it is more important to keep both eyes on the prize and concentrate on the fundamentals that ensure growth.
One driving force of the current economic landscape has been the explosion in investment in fintech, payments and other technology-based businesses. Many investors have poured billions of dollars into these companies, hoping to capitalize on the promise of new technologies and business models. However, this rush to invest has often been driven more by hype and speculation than by a clear understanding of the potential returns on investment.
The "move fast and break things" mentality has become synonymous with the tech industry in recent years, but this approach has led to numerous failures and setbacks. Many businesses have rushed to bring new products and services to market without fully considering the risks and costs involved. This has resulted in many struggling to scale their businesses and generate sustainable returns. Making mistakes is important—that's how we learn, and it is the same in business—but this is less of a luxury when the purse strings become tighter.
By focusing on the essential elements of doing business and staying within regulatory limits, businesses can improve their resilience and ensure they are well-positioned to weather the economic storms. This approach means fulfilling a real need, prioritizing profitability and reducing complexity.
Recent years have been rife with economic cautionary tales. A prime example is Meta, previously known as Facebook, which bet big on its Metaverse product. The issue was that this had no obvious uses and featured an aggressively steep barrier for entry. For many, it looked like a solution in search of a problem. Unlike the Facebook app, it can be used only at home and requires VR headsets that cost anywhere from $510 to $1,916. This seemed out of touch with what the vast majority of people need, especially at a time when rising living costs and four-figure energy bills fill the headlines.
Elsewhere, companies like WeWork and Uber have become household names thanks to massive investments before ever exhibiting the ability to turn a profit. The former has ceased operations; the latter has never managed to turn a profit at all. With changes to interest rates, the era of cheap money is over, and companies will once again have to prove that they can generate returns to investors rather than relying on a compelling story. These narratives developed in conjunction with other purely speculative notions that were touted to revolutionize business. These included, but were not limited to, Web3 and cryptocurrencies. Both continue to garner headlines, but with no clear path as to how they might nurture long-lasting or profitable companies.
Complexity has proven to be a major barrier to growth for many businesses. As companies expand, they often become bogged down in bureaucracy and struggle to adapt to changes in the market. By simplifying their operations, businesses can improve their agility and responsiveness, making it easier to pivot when needed and capitalize on new opportunities.
The economic landscape in 2023 presents significant challenges for businesses. However, by taking a back-to-basics approach, companies can drive growth and improve their resilience in the face of difficult economic conditions. This approach means avoiding hype and speculation and instead focusing on delivering real value to customers and other businesses. By doing so, companies can position themselves for long-term success, even amid a global recession. 
Scott Dawson, head of sales and strategic partnerships at DECTA is a highly motivated and results oriented individual with 20 years of experience within the payments industry. Previously, he served as commercial director at Neopay, the market leader at delivering compliance solutions to eMoney and payments institutions. He has also held fraud management positions at PSI Holdings and Neteller, before becoming senior fraud manager and then business development manager at ClickandBuy, which was acquired by Deutsche Telekom. DECTA provides end-to-end payment infrastructure, from acquiring to issuing and processing, but unlike other players in the crowded payments marketplace DECTA offers bespoke-as-standard solutions aimed at making payments accessible to everyone. The company is headquartered in the UK and has offices around the world. For more information visit www.decta.com.
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