Going into 2021, medium-sized businesses may find themselves at a disadvantage compared to larger or smaller firms.
This post is part of ZoomInfo’s 2020 Annual Report series.
It has little to do with staffing, pandemic-related revenue difficulties, or fluctuations in the market.
Instead, the problem stems from a lack of new product releases, according to data from ZoomInfo..
Fewer releases come from medium-sized businesses
The pandemic highlighted a pattern for medium organizations that has been occurring for years but now takes on greater importance: Mid-market companies — those earning from $100 million to $1 billion — release far less new products than smaller or larger firms.
To arrive at these conclusions, ZoomInfo analyzed media articles and press releases within its Scoops feature to measure new product and service releases. Given that press releases and articles traditionally publicize new products, these formats act as reliable indicators of innovation and launch activity.
Looking further at the data, medium companies released almost 10% less new products as of September 2020 compared to 2019. Small companies and enterprises saw the reverse trend, seeing increases in new launches in 2020.
More Innovation Occurs Elsewhere
Things are rosier on either end of the business-size spectrum.
In terms of product launch volume, small businesses take the lead with new releases. However, that pace must be taken in context, as there are millions of more small businesses than medium or large companies.
Enterprise firms do the best at innovating new products compared to the total number of businesses. The percentage of companies launching products increases significantly after a firm hits $1 billion in revenue.
Large companies also tend to have specialized tech stacks that promote sales and innovation — for example, enterprise CRM systems.
Mid-Sized Firms Face Unique Pressures
The gap in product releases for medium businesses is not easily explained in ZoomInfo’s analysis, but here are some ideas behind the variances.
For starters, when a company hits $100 million in revenue, there are in turn more financial expectations to keep growing. That pressure amplifies if a company plans to go public at some point, and it can be an isolating existence in some ways.
“It’s tough being mid-market,” according to accounting services firm Praxity. “Too big to take advantage of government handouts and business breaks, and too small to have the influence and power of global giants … many [mid-sized businesses] receive little support in an increasingly competitive, regulated, and technology-focused world.”
Talent retention is another area that medium-sized businesses struggle with. Such organizations constantly fight to keep employees from going to larger companies, and mid-market firms often don’t have the HR setup to develop effective recruitment strategies, said finance and HR platform vendor Workday.
With a talent pool under duress, product development can suffer.
Medium Companies May Struggle to Recover
In conclusion, mid-market companies will play catch-up in 2021 if recent years are any indication.
With less new products, medium firms face the stress of having fewer new customers and perhaps less-loyal existing buyers. The risk of some medium companies stifling themselves looks high.
By comparison, smaller companies — if they survive the pandemic — are better positioned to continue innovating thanks to entrepreneurial environments and the ability to change direction rapidly if needed. Meanwhile, enterprises have enough money and well-staffed teams to pursue aggressive innovation.
ZoomInfo’s 2020 Annual Report Series
- Companies Navigate Through a Storm in 2021
- Corporate Diversity & Inclusion Trends of 2020
- A New Employee Landscape & Future Work Environment
- Customers Await Recharged Sellers
- The New Work From Home Norm is Driven by Tech Adoption
- A Speck of Promise for Women in the Workforce
- Three Forces Drove Venture Capital Trends in 2020
- Size Affects How Companies Fare During and After The Pandemic
- Success During the Pandemic – Customer Retention Is Key
- Finding New Customers in a Pandemic: Zoom’s Success Story
To browse through more go-to-market trends and 2021 business predictions, continue on to ZoomInfo’s latest Annual Report: Going to Market Smarter in the New Economy.