Financial Crisis Forces Companies to Focus on Core Competencies

Last year was painful for everybody, but the financial crisis was especially devastating for startup companies, a group of venture capital and technology leaders said Feb. 4 at the Thunderbird Global Private Equity Forum in Menlo Park, Calif. The economy forced companies to squeeze the fat out of the system, meaning companies needed to concentrate more on their core competencies. Companies that did survive by focusing on their core businesses will be better positioned for success in the future, said Todd Jacquez-Fissori, Managing Director, Hercules Technology Growth Capital.

A company faced with the decision of redirecting its core strategy faces tough choices regarding which business processes remain its core and which are not core. Harry Wallaesa, Chairman & CEO, The W Group, suggested that companies can in fact benefit by leveraging technology without having to carry the cost of the technology on its balance sheets.

Wallaesa continued stating that companies are best positioned when fixed costs are transferred to variable costs.

Voytek Siewierski, Investment Partner, Mitsui & Co. Venture Partners warned that companies must similarly beware of how much of their businesses they outsource. Accordingly, one of the biggest mistakes that entrepreneurs make is not identifying what is core and what is a commodity, opined Wallaesa.

Jacquez-Fissori reminded the audience that the life cycle for technology companies often seems like six short months; as such, companies need to be nimble, adroit with infrastructure, supply chain, and marketing.

Moderator Jim Livingston, VP Technology Solutions, Affiliated Computer Services (ACS) concluded the presentation by stating that Chief Executive Officer’s today need to peer down on their company from a 50,000-foot view to determine solutions: Is this something that I can do or is this something that somebody else should be doing?

The discussion was hosted by Affiliated Computer Services (ACS) as part of the Thunderbird Global Private Equity Center’s (TPEC) global private equity forum series.

[This article has been reproduced with permission from Knowledge Network, the online thought leadership platform for Thunderbird School of Global Management https://thunderbird.asu.edu/knowledge-network/]