Richard

You’ve heard the statistics: Around two-thirds of startups fail.

Young companies fail for many reasons — from insufficient capital to lack of market demand — but scaling too quickly is the primary culprit. Growing at an unsustainable pace too early can be fatal, contributing to an estimated 74% of startup failures.

Gripped by the adrenaline rush of initial success, pursuing new markets, diversified product lines, and a larger customer base in the hopes of massive profits can be tempting. However, without a solid foundation, scaling too quickly can cause a promising company to crash and burn.

You can scale your business sustainably by focusing on steady, strategic and manageable growth.

Here’s my case for prioritizing depth over breadth in startup expansion.

The problem with growing too fast

After securing funding for a startup, you may be eager to kickstart an ambitious expansion plan. However, following a high-growth approach that prioritizes return on investment at all costs comes with risks:

1. Stretched-thin resources

Young startups operate with limited resources — including finances, manpower and time. Expanding too quickly across multiple markets can lead to future layoffs and hasty cost-cutting measures.

2. Strained customer experience

When early-stage startups shift focus to scaling headcount and new markets, foundations like proper customer experience may fall by the wayside. Overwhelmed by a runaway customer base, teams may struggle to maintain the same level of user (or client) care.

Related: To Expand, Or Not To Expand? 10 Factors To Consider Before Expanding Your Startup

3. Quality compromise

Aggressive expansion can lead to compromised quality in all areas of a business, including:

• Hires. There are only so many qualified candidates in the job market at any given time. Bad hires will cost companies down the line.
• Culture. Without proper oversight, runaway growth can breed a toxic work culture. Growing too quickly can burn your team out, contributing to poor productivity, low morale, and a high employee turnover — all symptoms of a toxic work environment.
• Product or service. As startups scale, sometimes the things they do best get watered down. Teams may be unable to meet demand and maintain the quality of their core offerings.

4. Compliance issues

Navigating laws and compliance issues can be challenging enough in one location. Adding multiple cities, states, and countries gets even hairier. As you expand to other jurisdictions, you may run into complications like unique requirements for employment, taxes, and payroll.

(FYI: I learned this lesson the hard way in the early days of setting up my company. My limited understanding of the laws around paid time off in various Latin American countries cost my company tens of thousands of dollars.)

5. Compromised company culture

Sustaining a company culture is easy when you’re a small team with a vision. Expanding to larger teams around the country or world makes it trickier to preserve core values. The bigger your company gets, the harder it can be to establish a universal culture and create a sense of community.

Compromised company culture is a big deal: Plenty of research confirms it matters, with one international study finding that 73% of workers would not apply for a company if it did not align with their values.

Related: Small Business Owners Are Watching the Election — But They’re Deeply Skeptical

How to grow your startup the right way

To mitigate obstacles while building your brand a bigger and better one, consider these three rules for scaling your business the right way:

Prioritize your user experience

In a competitive marketplace, user experience — or people’s relationship with your platform — separates flash-in-the-pan startups from enduring brands.

Consider Slack, an uber-successful platform that built a user base, gathered feedback, and adjusted its product accordingly before expanding into a general collaboration tool. Or Zappos, an online shoe retailer that enjoyed rocketing organic growth by offering free returns and going above and beyond for its customers.

My company, a hiring platform, found early success by offering our job seekers above-industry-standard salaries, premium benefits, and mentors. Our dedication to improving job seekers’ experience helped us recruit the region’s top performers and increased our retention rate. Having top talent made it easy to catch the eye of top clients seeking qualified tech workers.

Stay lean

History is filled with startups that found success by keeping costs low: Spanx was founded in the 1990s with just $5,000 of the founder’s savings; Subway was started in 1965 on $1,000 borrowed from the founder’s family friend.

In the early stages of your company, limit your spending to need — not available capital — to allow enough room for growth. You won’t be able to scale if you’re stretching capital, staff, or other resources too thin.

Dominate one market before moving on to the next

Airbnb initially focused on perfecting its home-sharing model in key cities like New York before moving to other markets, building a sturdy foundation for its subsequent global expansion. Streaming giant Netflix invested heavily in original content creation and improving its recommendation algorithms instead of expanding into unrelated markets.

Your marketplace visibility helps increase brand recognition, customer loyalty, and market share. To achieve a greater market presence, concentrate on becoming a dominant player in a specific niche or geographical area before moving on to new opportunities.

As an entrepreneur or business owner, travel might be a fundamental aspect of your strategy to network, expand, or oversee operations. Though, it probably isn’t in your business plan to spend a lot of money doing so. In 2023, Zippia reports that the average business traveler spends $949 in fees.

You could reduce travel expenses such as flights and hotels if you shop around on sites like Expedia or Priceline, but why not let this AI-powered travel app help you book your next business trip? Save 40% to 90% on upcoming trips for life when you get OneAir’s Elite Plan for $69.99 (reg. $790).

Your most affordable business trip yet

Whether you’re meeting partners in New York City or London or flying employees to a company retreat, travel expenses add up. If you’re ready to cut some of those costs down, add up to ten departing locations and specific destinations where you have client-facing meetings or networking events.

Once you’ve entered that information, OneAir’s AI engine will scan and track millions of fares in real-time to alert you to the best deals on economy, premium, business, and first-class flights.

The best part about OneAir (aside from the travel savings it’ll find you) is that you can book flights on its iOS, Android, or web app without being redirected to other sites—au revoir, third parties. And unlike Google Flights or another flight finder, every price OneAir sends you is all-inclusive with no additional costs or fees.

After finding your desired flight, use OneAir to explore deals on hotels and resorts, rental cars, and excursions. You might just save up to 60% on travel accommodations for yourself and your employees and get a wholesale price on sightseeing activities or meals at hip restaurants.

A travel app designed for entrepreneurs

Any business owner knows that time gets away from them, so to help you plan out the details of your trip, OneAir Elite offers 24/7 support for any stage of your travel organization. While you’ll get booking assistance from its AI, you’ll get itinerary help from real people.

No matter where you need to travel for work, you might be able to save hundreds with this app. Grab a lifetime subscription to the OneAir Elite Plan for $69.99 (reg. $790).

StackSocial prices subject to change.

For entrepreneurs and small-business owners, managing expenses and maximizing value are key to staying competitive. A Sam’s Club membership can help streamline that process with access to a wide range of products and services designed to save you both time and money.

Whether you’re stocking up on office supplies, groceries, or other business essentials, Sam’s Club offers deals that make it easier to stretch your budget without compromising on quality. You can get a year-long Sam’s Club membership on sale for just $15 until September 27.

One of the major benefits of a Sam’s Club membership is access to bulk purchasing options, allowing you to buy in larger quantities at lower prices — ideal for businesses that need to keep their shelves stocked or regularly buy supplies in volume. On top of that, Sam’s Club offers value on everything from electronics to furniture, helping you furnish your workspace or upgrade tech without breaking the bank.

For those looking to get even more out of their membership, Sam’s Club provides value-added services like tire and battery care, optical and pharmacy services, and discounts on travel and entertainment. These perks go beyond shopping, offering practical solutions that support both your personal and professional life.

A Sam’s Club membership also provides convenience, with options for online shopping and curbside pickup, making it easier to get what you need without spending time navigating the aisles.

For business owners looking to increase their purchasing power and access a range of benefits, a Sam’s Club membership is a smart investment that delivers value year-round, and it’s available as an auto-renew plan for just $15 through September 27.

StackSocial prices subject to change.

Say goodbye to passport renewal hassles.

The State Department announced to ABC News on Wednesday that online passport renewal is finally here for adults 25 and over who have had a passport before.

Related: 8 Islands U.S. Citizens Can Visit Without a Passport

Rena Bitter, assistant secretary of state for the Bureau of Consular Affairs, told ABC News that the service is for adults whose passports have expired within the last 5 years (or expiring in the next year) and that the agency expects five million Americans to use the service every year.

“The process of applying for a passport online will be much more convenient for Americans,” Bitter said.

Processing time is expected to be six to eight weeks. If you need your passport renewed sooner or are applying for the first time, the standard, more analog application process is still available.

Users can create an account on the State Department’s website, and input old passport information with their upcoming travel plans.

Related: Family Missed Out on Dream Vacation Because of a 1-Centimeter Tear in a Passport

For the photo, applicants can upload their own photo online —with some caveats. The image must have been taken recently and have a white background. And no selfies. Payment is by debit or credit card.

For more official criteria for online passport renewal, visit the State Department’s website.

Every company faces more pressure than ever to offer their customers outstanding digital experiences. Content such as text, images, video and more is the substance of those digital experiences, so every business needs to get content right. Why not learn from the pioneers of digital experience, SaaS (software as a service) companies?

Consider why SaaS companies like Intuit and Salesforce excel at content. From day one, successful SaaS companies support the end-to-end customer experience through diverse content, ranging from inspirational podcasts to product explainer videos to contextual help. As a past head of content for Mailchimp, I know firsthand that when customer experience is digital, content is critical. Consider these four content secrets that can benefit any business.

Related: How to Create Content that Generates Exposure, Loyalty and Sales

1. Show and tell your brand purpose

A meaningful purpose can differentiate a brand from any generation, but especially the up-and-coming Gen Z. One recent study by Roundel found that 73% of Gen Z participants will buy only from brands they believe in.

Adding purpose to a brand starts with defining it. But that can’t be where purpose ends. A brand has to demonstrate its purpose or risk coming across as unauthentic or even hypocritical.

Salesforce is a model for showing, not just telling, its purpose through content. From almost day 1, Salesforce has said its purpose is to “build stronger relationships.”

Recently, the successful SaaS launched a Netflix-like experience called Salesforce+. This streaming service provides on-demand content with very high production value about timely business and marketing topics, often involving Salesforce customers.

I’m not saying every company has to be Netflix. But every business can offer content that brings its purpose to life. For instance, The Home Depot offers project, buying and inspiration guides that show it empowers “more doing.” Patagonia’s catalog is more like an outdoor magazine with stories illustrating its commitment to “protect our home planet.”

Related: Don’t Just Hire — Grow Talent. 4 Ways to Set Your New Employees Up for Growth

2. Go beyond customer service to customer success

Great SaaS have figured out how to handle customer service digitally and enable customer success. Outstanding SaaS offers content to help customers solve problems and get more value.

Content examples include but are far from limited to

• Microcopy, such as labels, instructions, headings, icons, and error messages.
• Wizards or step-by-step interactive guides.
• FAQs that are easily accessible by chat and voice search.
• Contextual help, such as tooltips and notifications.
• Best practices based on the most successful customers.
• Chatbots or copilots fueled by FAQs, contextual help, and other content.

A great SaaS example is Intuit Assist, an AI-powered advisor that works across all Intuit products–and that has earned distinctions like the Fortune 50 AI Innovators. Forward-thinking businesses are taking note. For instance, Wal-Mart recently launched a copilot that allows customers to request “Help me plan a Halloween party” and receive relevant product suggestions across all departments.

Not ready for a full-on AI bot or copilot? Your company can leverage content to help customers and train an AI bot or copilot later.

Related: Why Doing the Right Thing Leads to Long-Term Success

3. Promote less, guide more

Every business faces the challenge of merchandising their products or services to fuel growth. Look at the way high-growth SaaS makes customers aware of relevant new offerings. Rather than blast sales-y ads and emails repeatedly, the best SaaS nudge customers to try new features, products, or services by suggesting them to customers most likely to benefit at the right time.

For example, during my time at Mailchimp, the SaaS grew quickly and added features steadily. So, while the engineers built the features, my teams built the content to encourage and support customers. We found a strong correlation between suggesting a useful how-to article for a new customer attempting a feature for the first time, that customer’s success, and millions of dollars in revenue.

I’m not saying your company should never place an ad again. But I’m willing to bet the uptake of your offerings will be much higher if you guide customers.

Even a product as simple as an eyeshadow stick, as seen with the wildly successful Thrive Causemetics, includes detailed descriptions, how-tos (both text and video), images for different skin types, FAQs, statistics, pro tips from the founder, and more.

4 Get your content in order

This secret is about what happens behind the scenes with content. There is no content fairy to magically create and manage your content. (No, not even AI can do that!) But there is content operations — the combination of people, processes and technology that orchestrate end-to-end content. Smart SaaS matures its content operations quickly so that it can scale. At Mailchimp, I added modern content roles, defined new processes and led the adoption of content workflow software.

Recently, Pfizer realized just how important content operations is to sustaining and expanding its business. At Adobe Summit, Jane von Kirchbach, Senior Vice President of Digital, said that “over the period of the pandemic, we touched more than one billion lives. This is our time to amplify how we engage with our customers, with our patients, with our doctors, and hospitals. Content is at the heart of that transformation.”

Pfizer transformed its content operations by streamlining its end-to-end content supply chain, automating workflows, and using AI to assist content development. These changes reduced content creation time by more than 50%.

So, as your business has to compete on digital experience, you can gain an advantage by acting like a world-class SaaS. Imbue your digital experience with content that shows your purpose and empowers your customers to succeed. And set up the right content operations to scale. The better your business gets at content, the more your business will grow.

As entrepreneurs continue to look for ways to expand their global footprint, they often encounter a significant hurdle: the language barrier and the risk it presents. Miscommunication and misunderstandings can lead to costly mistakes, drains on company time and missed opportunities.

As CEO of INS Global, I have seen firsthand thousands of success stories for businesses that have successfully made the leap into multilingual markets. Though it may seem counterproductive at first, bridging the language gap and expanding into a new market can be one of the most profitable ways to grow a business today. Strategically equipping your company to overcome language barriers will set you up for long-term success in future markets.

Related: Going Global? 3 Strategies to Ensure Nothing’s ‘Lost in Translation’

Identify language and cultural challenges

Current employees’ lack of language proficiency in the target market’s language is the most obvious barrier for businesses expanding into a new market. Therefore, the most obvious solution to identifying language barriers is to simply “hire bilingual employees,” but this short-sighted and reductive reasoning may not actually be the best long-term solution. Bilingual employees will certainly assuage the ability to communicate with customers, suppliers and employees. However, cultural nuances can complicate matters, as what is considered polite or respectful in one culture may be offensive in another.

The potential risks of miscommunication are significant and can result in lost sales, damaged reputations or even legal issues. For example, marketing campaigns that hit the easy button by making literal translations risk failing to fully capture idioms in other nationals that could offend a target audience. In the 1980s, when KFC first launched in Beijing, it made a translation mistake to its logo. While “finger-lickin’ good” chicken sounds appetizing, its literal translation was made to read “eat your fingers off.” Learn from similarly embarrassing literal translation mistakes made by international companies including McDonald’s, Clairol, Sony and Rolls Royce, and be sure to take into account both language and cultural nuances in your workflows.

Effective communication strategies

To overcome such language barriers, businesses that prioritize effective communication as a business strategy are likely to find better success in their new target market. Here are some practical strategies:

• Translation services: Hiring professionally certified translators ensures that messages are accurately conveyed. While machine translation tools have improved, human translators can better handle nuances and cultural context and ultimately save you time and money by getting it right the first time.

• Language training: Investing in language training for employees who interact with customers, suppliers or partners can significantly improve communication. This can be done through online courses, language exchange programs or in-person classes.

• Multilingual customer support: Providing customer support in multiple languages demonstrates a commitment to serving customers worldwide. This can be achieved through hiring multilingual staff or partnering with a customer support provider that offers multilingual services.

• AI-driven translation software has become increasingly sophisticated, offering more accurate and natural-sounding translations. This software can also be used by website chatbots in multiple languages to assist with customer service and troubleshooting.

• Cultural sensitivity: Understanding and respecting cultural differences is essential for effective communication. Businesses should conduct cultural research early on in product development and marketing campaigns and train employees to be mindful of cultural nuances, especially if employees will be living in multiple countries working for the same company.

Related: Multilingualism and Cultural Fluency Are the Drivers of Tomorrow’s Workforce

Localization for success

Localization is the process of adapting products, services or marketing materials to a specific market. It involves more than just literally translating content; it also entails considering cultural preferences, local customs and legal requirements. For example, a company selling food products might need to adjust the ingredients or packaging to cater to local tastes and dietary restrictions.

Netflix used localization to its benefit when entering the video-on-demand streaming marketplace in India in 2016. The company intentionally went beyond strict translation services to enter the market by also considering the cultural and consumer ecosystem in India. Netflix strategically utilized local social media influencers, dubbed in Indian dialects (in addition to adding translated subtitles), an enhanced budget-friendly mobile app for viewing due to Indians’ viewing habits and even developed original content for this new market.

Netflix went beyond simply purchasing the rights to Bollywood movies to grow its market share in India and instead embraced adapting to the Indian market as a core market, rather than just an “extra” market. As of its July 2024 Q2 Earnings Report, India is now the second-largest market for Netflix.

By localizing operations to a new market and taking consumer preferences into account, businesses can better engage with customers and increase their chances of success in new markets.

Partnerships as a solution

Partnering with a company that regularly works with multilingual workforces can provide the peace of mind and market-specific intelligence businesses may need to break through with minimal risk and maximum reward.

Companies like INS Global can partner with businesses looking to expand into multilingual markets by providing invaluable support and expertise. As an Employer of Record (EOR) provider, we offer localized HR solutions, including payroll, benefits and compliance. This ensures that language barriers and local regulations do not hinder employee engagement or operational efficiency. For example, by using an EOR, businesses can get help hiring local talent, which will provide them with access to skilled professionals who understand the language and nuances of their new target market. EORs can also ensure that businesses adhere to local regulations including wages, overtime, benefits and tax requirements.

Related: Multilingual Support: Speak Your Customer’s Language

By implementing effective communication strategies, embracing localization and leveraging like-minded partnerships, businesses can successfully navigate the challenges of operating in multilingual markets and mitigate unnecessary risk. Overcoming language barriers should be seen as the next and best way to achieve sustainable growth.

The average company spends 3.28% of its revenue on technology, and that doesn’t include software or hardware renewals, according to a study conducted by Deloitte. Although your company’s tech equipment budget may be costly, you don’t have to spend hundreds on new devices each year to boost productivity.

Instead, you could make those you already have more efficient. First up is your PC. If it isn’t already running on Windows 10 Pro, you’re missing out on the latest productivity tools and innovative security measures. Through September 29, this operating system is on sale for $19.97 (reg. $199) for life.

Increased productivity for your PC

If you’ve noticed slower performance on your device, this operating system (OS) upgrade is designed to enhance your PC’s performance and efficiency. Thanks to its 64-bit computing architecture, business owners and their employees can multitask while crunching numbers on Excel, designing company graphics, and leading stakeholder meetings.

Windows 10 Pro is also designed to integrate seamlessly with Microsoft 365 (not included with your purchase). Companies using Microsoft 365 for access to Microsoft productivity apps will be able to edit Word documents, collaborate with colleagues on Teams, and more at any time.

Designed specifically for working professionals

As a solopreneur or working professional, you’ll benefit from the Pro side of Windows 10 (vs. Home, the free version).

Secure your PC’s hard drive with BitLocker device encryption, test software with Windows Sandbox, manage virtual machines with Hyper-V, and deploy specific policies for different devices, users, and groups with Group Policy management. This OS is designed to keep your data and devices protected from tampering and malware.

Entrepreneurs and their employees can also control their PC from any remote device with the Remote Desktop feature, allowing for access to their work files and colleagues wherever they are.

Boost your productivity and streamline your workflow with Windows 10 Pro, now on sale for $19.97 (reg. $199) through September 29 at 11:59 p.m. PT. No coupon is needed.

StackSocial prices subject to change.

Acquiring a business is no small feat. The complexity and scale of the process necessitate a deep understanding of various domains, from financial analysis to operational management. You’re not just buying assets; you’re inheriting a legacy, a brand, an employee base and an entire ecosystem that needs to be meticulously managed and integrated.

Success hinges on assembling a team of skilled professionals who bring diverse competencies to the table, ensuring every facet of the business is thoroughly examined and seamlessly incorporated into your vision.

Each role is designed to cover critical areas of the business, addressing challenges specific to different core industries. Whether you’re venturing into technology, manufacturing, healthcare or any other sector, these key positions will help you navigate the complexities and unlock the full potential of your new venture.

Here are the five positions that are indispensable for a successful acquisition and smooth integration.

Related: 6 Critical Steps for Buying a Business

1. Business Development Strategist

Role overview:

A Business Development Strategist is instrumental in identifying growth opportunities and creating strategic plans. Their responsibilities include market analysis, partnerships, risk mitigation and strategic planning.

Real-world example:

When Amazon acquired Whole Foods in 2017, the Business Development Strategist team played a critical role. They identified potential synergies between Amazon’s technology and Whole Foods’ physical stores, leading to innovations like cashier-less checkouts and improved supply chain efficiencies.

How they work with other roles:

With Financial Analysts: Collaborate to align strategic plans with financial forecasts and valuations.

With Sales Leaders: Share market insights to refine sales strategies and set realistic targets.

With Industry Specialists: Use regulatory and market intelligence to craft informed growth strategies.

2. Financial Analyst

Role overview:

A Financial Analyst provides essential insights into the financial health of the business through financial modeling, valuation, due diligence, performance analysis and strategic financial planning.

Real-world example:

During the acquisition of LinkedIn by Microsoft, Financial Analysts conducted detailed due diligence, including discounted cash flow (DCF) analysis and comparable company analysis, to justify the $26.2 billion price tag and forecast future performance.

How they work with other roles:

With Business Development Strategists: Provide financial data to support strategic growth plans and risk assessments.

With Sales Leaders: Analyze sales data to gauge the financial impact of proposed sales strategies.

With Operations Managers: Monitor financial performance metrics to identify cost-saving opportunities in operations.

3. Sales Leader

Role overview:

A Sales Leader drives revenue and scales the business through strategy development, team management, customer insights, data-driven decision-making and cross-departmental collaboration.

Real-world example:

When Salesforce acquired Slack, the Sales Leader’s role was pivotal in integrating Slack’s sales processes with Salesforce’s, developing a unified sales strategy to maximize cross-sell opportunities and drive adoption of Slack’s platform within Salesforce’s existing customer base.

How they work with other roles:

With Business Development Strategists: Align sales goals with strategic growth opportunities.

With Financial Analysts: Use financial metrics to refine sales strategies and measure effectiveness.

With Industry Specialists: Leverage industry insights to tailor sales approaches and enhance customer engagement.

Related: Purchasing a Business Doesn’t Have to Be Difficult. Here’s Your Comprehensive Guide.

4. Industry Specialist

Role overview:

An Industry Specialist brings deep sector-specific knowledge, covering regulatory compliance, innovation, networking, market intelligence and training.

Real-world example:

In the acquisition of EMI Music by Universal Music Group, Industry Specialists ensured compliance with complex music industry regulations and helped integrate EMI’s diverse catalog into Universal’s operations, while fostering relationships with key stakeholders in the music industry.

How they work with other roles:

With Financial Analysts: Provide industry-specific data to enhance financial modeling and valuation.

With Sales Leaders: Offer insights into industry trends and customer preferences to inform sales strategies.

With Operations Managers: Ensure operational processes align with industry standards and innovations.

5. Operations Manager

Role overview:

An Operations Manager ensures smooth day-to-day operations, focusing on process optimization, supply chain management and quality control.

Real-world example:

When Walmart acquired Jet.com, Operations Managers streamlined Jet’s supply chain processes and integrated Walmart’s logistics infrastructure, leading to improved efficiency and cost reductions.

How they work with other roles:

With Business Development Strategists: Implement strategic plans by optimizing operational processes.

With Financial Analysts: Manage operational costs and identify cost-saving initiatives to improve financial performance.

With Sales Leaders: Ensure operational capabilities align with sales goals and customer expectations.

Related: Buying a Business? Make Sure It Checks The Boxes On This Checklist Before You Pull The Trigger.

Assembling a team with these specialized roles — Business Development Strategist, Financial Analyst, Sales Leader, Industry Specialist, and Operations Manager — can transform the daunting task of acquiring a billion-dollar business into a well-managed and successful venture.

Each role not only brings essential skills but also works synergistically with others to ensure every facet of the business is expertly handled. By integrating these roles effectively, you position your acquisition for long-term success and sustained growth.

For $2 a conversation, a new AI agent from Salesforce can answer questions from customers and schedule meetings — without a human being needed for oversight.

The AI agent technology, which Salesforce announced earlier this week at its annual Dreamforce event, has the potential to disrupt jobs currently held by human workers. Nearly three million people were employed as customer service representatives in 2022, with the majority (66%) being women, according to Data USA.

Related: Worried About AI Stealing Your Job? A New Report Calls These 10 Careers ‘AI-Proof’

Salesforce knows that its new technology carries the power to replace what could have been human hires. Salesforce CEO Marc Benioff said on Tuesday that the new AI agents allow companies to forgo hiring new employees or “gig workers” in more hectic periods of time, per Bloomberg.

“We want to get a billion agents with our customers in the next 12 months,” Benioff said.

^{Salesforce CEO Marc Benioff. Photo by Justin Sullivan/Getty Images}

Adopting a hiring freeze, and then tasking AI with filling in the gaps, is a strategy being used by other companies like “buy now, pay later” payments firm Klarna.

One year ago, Klarna simply decided not to hire — not even replacements for people who left. Departing employees and an AI-induced hiring freeze have cut Klarna down from the 5,000-person workforce it was last year to the 3,800 people it had as of late August, without any layoffs.

Related: AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

In late August, Klarna CEO Sebastian Siemiatkowski told The Financial Times that the company wants to get its workforce down to 2,000 employees within the next few years with this approach.

“Not only can we do more with less, but we can do much more with less,” he told the Financial Times.

Klarna isn’t the only company using AI to automate tasks that humans once did. Within the next year, three in five large companies in the U.S. intend to use AI for everything from financial reporting to marketing campaigns, according to a June study from Duke University.

Goldman Sachs estimates that AI could replace or impact 300 million jobs by 2030, affecting writing, translation, and customer service gigs.

Related: JPMorgan Says Its AI Cash Flow Software Cut Human Work By Almost 90%

In December 2020, the Federal Trade Commission ordered the biggest social media and streaming companies in the world, including Twitch owner Amazon, Facebook (now Meta), YouTube, Reddit, WhatsApp, Twitter (now X), Snap, Discord and TikTok’s ByteDance, to share how they used their users’ personal information.

On Thursday, FTC staff released a 129-page report, which found that these companies all “harvest an enormous amount of Americans’ personal data and monetize it to the tune of billions of dollars a year,” stated FTC chair Lina M. Khan.

“While lucrative for the companies, these surveillance practices can endanger people’s privacy, threaten their freedoms, and expose them to a host of harms, from identify theft to stalking,” Khan said.

Related: The FTC Is Banning Businesses From Writing, Buying Their Own Reviews and Bot Followers

The report called out major social media companies for collecting vast swaths of personal data and using it in ways their users may not expect. The FTC found, for example, that “many” of these companies buy data from third-party brokers about where a user is located, how much they make per year, and what their interests are, to understand more about a user’s activity on the Internet outside of the social media platform.

This personal information becomes the basis of targeted ads, which most social media sites rely on for revenue. Meta, the parent company of Facebook, Instagram, WhatsApp, and other products and platforms, reported that 98% of its $39.07 billion revenue in its second quarter came from ads on Facebook and Instagram.

Related: Federal Judge Blocks FTC’s Noncompete Ban 2 Weeks Before It Would Have Taken Effect — Here’s Why

According to the FTC report, it’s difficult for users to understand how social media platforms collect their information and how much is used to tailor ads. Many may not even be aware of what’s happening behind the scenes.

Plus, even if users are tuned in and know that social media platforms are using their data, they still don’t have “any meaningful control over how personal information [is] used,” the FTC report shows.

Companies use personal information to fuel algorithms, data analytics, and AI that, in turn, shape content recommendations, search, advertising, and other crucial aspects of their business. The FTC recommended that companies be transparent about the data they collect, do more to protect privacy, and put users in charge of data.

The FTC further found that if a user wants to delete their data, some sites will de-identify the data they have on hand, but keep it on file instead of wiping it all. The platforms that did delete personal data upon request would select which parts to delete and fail to remove all of it, according to the report.

Related: The FTC Is Suing to Block a Mega-Merger That Would Unite Coach and Michael Kors

“Companies can and should do more to protect consumers’ privacy, and Congress should enact comprehensive federal privacy legislation that limits surveillance and grants consumers data rights,” the report stated.