By Kurt Rathmann, founder and CEO of ScaleFactor

ScaleFactor CEO Provides Insight Into FinTech's Future

As we head into 2020 we are seeing a storm form in the business world. Companies like WeWork lost their chance at an IPO and not because of a public faux pas, but because they opened their books for further scrutiny. This is not the first instance of IPO possibilities uncovering less than ideal spending habits from companies but the result will be different in 2020. The perfect storm of consumers requiring better customer experiences, venture capital firms requiring more responsible spending, and businesses optimizing their spending will make 2020 "The Year of the Customer." 

Venture Capitalists Watching Spend

After IPO fiascos like WeWork, venture capital firms are going to be more mindful and likely more involved in how the companies they fund are using the money they've provided. Startups who once flooded their employees' closets with swag and paid no mind to customer acquisition costs (or CAC) will no longer be given free rein to account for business costs however they see fit. 

Business accounting will need to be buttoned up and may even be subject to more audits-not by the government. As their scrutiny increases, VCs will hire third-party auditors to ensure they and their companies don't end up in the news as the latest example of improper accounting practices. 

Businesses are Optimizing Costs and Requiring More

As VCs acutely tune into business spending, cost optimization will be the natural next step through this path of the perfect storm. Costly software subscriptions that do not completely solve the needs of businesses will no longer be able to count on their renewal revenue stream. 

Softwares will need to focus on their customer experiences and explore ways to differentiate themselves from their closest competitors. With a multitude of options to provide solutions for all of their needs, business consumers and will no longer accept inconveniences, bad user experiences, or even high dollar pricing. Products and services will be held to a higher standard. 

It is not new for businesses to focus on their spend. 2020 specifically will see business owners focus on what software works, managing their program spend, and even deciding on outsourcing for increased savings. The optimization efforts will be all-inclusive. 

The Year of Customer 

As customers optimize their budgets, companies looking to continue serving their customer base will need to think with their Customer Caps on as they release new products, or even push updates to their services out. If something does not go well, customers experience a dip in service, or there is an outage on their product they will jump to the top of the list of vendors to cut. Businesses should be prepared for this perfect storm on the horizon where consumer standards continue to rise.

As we head into 2020 we will see more software companies making the connection regarding this storm. In order to survive to 2021, they'll need to keep their customers at the forefront of their minds and decisions-especially their VC backed customers.

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About the Author

Kurt is a born and raised entrepreneur. He brings a diverse background measuring and growing businesses and functions as the Chief Everything Officer. He has a keen focus for growing revenue, refining operations, and developing people. He is a news junkie, technological optimist, and has inherited the travel bug with a passion for exploring the world with his awesome wife.