It’s an update no one wants to write – “Dear customer / employee / partner. As you will have heard, we, like many businesses have been affected by the collapse of Silicon Valley Bank and are working hard to ensure any disruption is minimal.”
Cue mass panic among any of your intended recipients.
The reason for the concern across the tech industry was unsurprising – a poll of its tech community un by UK Business Angels pointed showed there was there was substantial revenue at risk for businesses (an average of £3.5m per business), alongside the stark fact that 35% of them had *no* access to other banking facilities. Thankfully, due to the swift work by HSBC, The UK Treasury and Coadec, it was an email few founders and CEOs had to press send on.
While industry leaders worked at breakneck speed over the weekend to put a deal in place, these events have served as a timely reminder that communication and clarity at a time of crisis is more important than ever.
Few successful communications have one message to suit all audiences – a point that was raised in Monday’s ‘Silicon Valley Bank UK Webcast’ from EY which featured the potentially obvious but oft forgotten point that “finance teams talking to technologists rarely have common language”. In fact so much of the early chatter you’ll have heard about the fallout from the SVB collapse has been by financers, for financers.
This sort of language in the wake of a high-profile crisis might be re-assuring in some groups. But it just doesn’t stand the chance of cutting through with stakeholders outside of that inner circle.
This is an important point. A situation like SVB requires clarity of message across different stakeholder groups. For fintechs, it could mean reassuring business end users that funds and services are safeguarded, while regulators need to hear that there’s a minimum “contagion” risk for others in the sector.
In all cases, clarity and an audience-centric approach is the key to building reassurance and mitigating aftershocks.
And, of course, policy makers are a crucial audience.
The reaction of the UK’s tech sector to the collapse of SVB has been a demonstration of how a community that, on the face of it, has varied priorities and points of view, can still unite quickly to communicate what it needs to government.
Tech founders, investors, and leaders – brilliantly led by Coadec – made their voices, and the needs of the sector, heard in Downing Street, and in doing so played an important role in ensuring that a deal was done.
Political necessity was also, of course, key to the swift Government response. Just this past week, the Government published a ‘Framework for Science and Technology’ laying out the ways in which it would realise its ambition to the make the UK a science and technology superpower by 2030.
The collapse of the UK’s start-up ecosystem would hardly have been a way to underscore their intent.
Interestingly, despite the huge uncertainty over the last few days, there will be plenty in Whitehall and Westminster who take an element comfort from this episode. After all, a crisis appears to have been avoided, and not a single penny of taxpayers’ money has been used.
As one civil servant, involved in the negotiations over the weekend, put it to Brands2Life’s Public Affairs team earlier today: “If this episode shows anything, it shows the system works.”
You can take to Twitter and LinkedIn for any number of hot takes and viewpoints on what could have / should have been done to prevent this from happening, but as we heard yesterday from EY “there’s a distinct difference between planning for every eventuality and having the time and resource to see each one play out”. As serial technology founder and investor Brent Hoberman noted “The sector starts the week reinvigorated with even greater determination to create positive impact. The palpable relief after the stress and distractions of the weekend will give renewed energy and optimism to Founders (and VCs).”
While there is still potential headaches ahead for anyone involved even now SVB UK has a buyer, there will be a deep sigh of relief that, thanks to the immediate action taken by the industry, the damage has been limited, for now at least.
And when a crisis does happen next, those tech leaders and founders will be reminded that clear communications at a time of crisis can help alleviate some of the pain customers, employees and partners will feel.