2024 outlook for tech startups and the CDR sector
By Stuart Low (pictured), Founder & CEO of Biza.io
2023 was a tough year all round but particularly for start-ups. It was a year of uncertainty, rising interest rates, and slow or non-existent growth, which have dampened investor confidence.
While it’s hard to predict exactly what will come out of 2024, for startups like Biza.io, having an outlook on what we can expect from the industry as well as other macro trends is crucial for the planning of our business trajectory over the next 12 months. From tech startups under pressure to win the talent war, to how startups will respond to the end of the tech downturn, here’s what we think Aussie startups need to watchout for in 2024.
2024 will be the year of loud suffering
The years of quiet quitting, when employees chose to unsubscribe to the hustle culture mentality and quit the idea of going above and beyond for their jobs, are over. In 2024, we will see employees overtly projecting their stressors caused by the current economic climate on employers.
With the rising cost of living and the housing crisis, employees won’t shy away from going to their employers with a laundry list of desires. From demanding more benefits such as big quarterly events or bonuses, to wanting an office to work from but also the ability to work 100% remotely, alongside yearly pay reviews with an inflation clause in their contract. For employers who are struggling to attract and retain good talent, it will be a tough balancing act to keep employees happy while also managing their operational costs.
For some organisations, we’ll see a shift back towards an employer’s market. However, for those who are service-based and rely heavily on niche expertise, it’s going to be difficult to find a middle ground.
Building a strong company culture will become imperative for organisations that wish to minimise staff turnover and retain good talent. If we learnt something about the Great Resignation era it’s that people want to feel good about their work; they want to work for companies that take employee wellbeing seriously and that invest in making their workplaces more inclusive and diverse, which are all ingredients to a strong company culture. All these elements combined may not stop the demands and expectations of employees, but they will help to soften the no’s and bring employees on a journey with the organisation.
A light at the end of the tech downturn
The tech sector has taken a hit the past couple of years leading to mass tech layoffs, slumping share prices and many tech companies going bust. The tech sector has possibly hit rock bottom and in 2024 we could see the start of the recovery.
Organisations will be aiming to capitalise on the opportunity to seek growth, improve margins and scale their businesses, however, keeping costs low will remain a challenge against the current backdrop of global uncertainty.
There will be more scrutiny on expenses and a big focus on ensuring that every dollar spent returns significant value.
As AI continues to gain momentum in its implementation phase, organisations might be tempted to turn to generative and process-based AI to lower staff costs but the aftermath could lead to an increase in the unemployment rate.
The rise of the Consumer Data Right in 2024
We expect 2024 to be the CDR’s most significant year since its inception as the energy sector joins the banking sector in moving past the enforcement phase. CDR will gradually become more mainstream as customers increasingly experience its benefits by accessing competitive and more customised deals with ease.
We’re predicting 2024 will be the year of M&As across the CDR. Particularly amongst data recipients, who have been impacted by rollout delays. I think we’ll also see some Data Holder solution providers, who haven’t achieved a critical mass in customers, start to end-of-life their products, causing mass migrations for Data Holders. This will force the hand of those who claim migration still isn’t an option — which simply isn’t the case.
2024 will also be crucial for the long overdue rollout of action initiation which expands the CDR from a data-sharing scheme to allowing customers to authorise third parties to carry out actions on their behalf. PayTo, which is the equivalent of payment initiation, will be properly adopted by most players in the CDR market and a new framework for Digital ID will be introduced.
We will also see the impact of the updated Privacy Act whereby small businesses which were previously excused from the bill’s obligations will no longer be exempted. This will put an incredible amount of pressure on the SMB sector. As a result, small businesses might need to be ISO27001 compliant, which is a mammoth undertaking with significant costs involved. As a result of the law change, we could also expect small businesses to be hit with a spike in insurance premiums costs. Ironically the CDR, through insights, may present an opportunity to decrease data exposure for these businesses and therefore decrease compliance costs.