Wisdom And Curiosity: Why Thinking Like a Startup is the Next Step in eCommerce Evolution
It’s time to leave tradition where it belongs: in the past.
Most enterprises are still using the same tired advertising techniques they were using back in the 60s and 70s: get your product/service in front of the client, convince them to buy, repeat. While the advertising landscape has clearly changed, the strategies haven’t.
Take a second to consider what the average consumer looks like today. More often than not, you’re looking at a well-informed and skeptical person that’s not afraid of voicing their opinions. Presenting that person with a gimmick (unironically) might be one of the easiest ways to lose their interest.
Let’s be clear: spamming people’s News Feeds is not a legitimate social media strategy. It’s passive, valueless and honestly? It’s boring. The Harvard Business Review went as far as to say that traditional marketing was dead.
A little dramatic? Maybe, but they’re not exactly wrong. Any enterprise that thinks aimlessly posting on Facebook works is completely missing the point of social media.
So, let’s have a conversation about the future of social media strategy. Specifically, what enterprises can learn about marketing from startup companies and their “cutting-edge” approach (that’s actually more ‘common-sense’ than ‘brilliant’).
If you’re trying to build an effective marketing strategy, your business needs to evolve with its consumers. If it doesn’t, your business is going to have a tough time being on the cutting-edge of anything.
The Enterprise’s Wisdom
Before we start doling out advice, we need to get some perspective on these types of businesses.
Consider for a second the sheer amount of money that the average corporate enterprises have access to. According to a Gartner survey, a business with an annual revenue of $5 billion will spend about $125 million of it on digital marketing alone. How much do startups spend? Well, see for yourself:
On average, they’ll end up spending about $400 on digital marketing.
If we’re comparing bank accounts, it’s no contest. The enterprise’s strength lies in its resources as well as its laser-focus on minimizing risk (e.g. having a rigid chain of command).
Considering the kind of capital that these businesses have, mastering the art of being risk averse and profitable at the same time definitely has its perks.
Still, it’s about more than just money. Enterprises have another powerful tool in their arsenal: experience. They understand the value of creating long-term, sustainable growth.
Despite their limitations, they’ve generally cultivated a certain level of insight and maturity. Over the years, the average enterprise can leverage that experience into wisdom, a resource that most startups don’t have access to.
Unfortunately, that wisdom can be a bit of a mixed blessing. The enterprise approach favors the tried and true over the experimental. It’s not surprising then that the average enterprise (stuck in its traditional approach) is struggling when it comes to keeping up with startups.
While enterprises are using the same tired social media strategies every year, startups are constantly challenging the status quo that enterprises work so hard to maintain.
Now, as a concept, innovation is simple enough: create something novel and valuable that meets your consumer’s needs. There’s just one problem: the average enterprise doesn’t make innovation a priority.
Sure, they might have an R&D department, but that’s just a small group of people, doing their best to maneuver their way through red-tape.
The traditional enterprise business model might help put shareholder’s minds at ease, but it doesn’t make coming up with the next marketing breakthrough any easier.
Of course, no one is suggesting that creative departments be put in charge of running the company (someone has to keep track of profit margins, after all). Still, compromising a business’s ability to flex its creative muscles and experiment is a great way to stunt its growth.
Instincts and internet rumors might lead you to look at the dwindling organic reach on sites like Facebook and come to the conclusion that social media is turning into a “pay to play” market.
In reality, an analysis by Shift Communications of 313 Fortune 500 companies tells us something that the best startup companies have already figured out: you can’t buy your way into the online consumer’s heart.
As important as handling digital marketing issues is in the eCommerce world, it’s really just a symptom of a much more serious issue. If enterprises want to compete with startups in the innovation department, they don’t need more money. They need curiosity.
The Startup’s Curiosity
Clearly, succeeding as an enterprise can be difficult. But succeeding as a startup? The odds aren’t exactly stacked in your favor. According to the Startup Genome Report, more than 90% of all startups fail.
So, in the face of all this adversity, how do startups manage to compete with their enterprise counterparts? Simple: they get out of their own way.
At its core, The ‘original sin’ of the enterprise world is that enterprises haven’t been expected to focus on innovation. They’ve been expected to maintain a profit margin.
It’s no surprise, really. Profits keep the office lights on. They keep employees well-paid and shareholders happy. Still, as costly as experimentation can be, it’s still cheaper than falling behind in the competitive market.
Startups are leading the charge when it comes to innovation because most enterprises are struggling when it comes to developing efficient internal communication and organization systems.
So, that’s the bad news. The good news? Thinking like a startup is the key to not only keeping up, but making sure that you never have to play catch-up again.
Vision: The First Pillar of eCommerce Evolution
Honestly? This’ll probably the most challenging aspect of channeling your inner startup. Even companies like The Home Depot (who made $3.8 billion in online sales alone in 2015) struggle with interdepartmental politics.
And they’re not the only ones. Nokia (a company that was once valued at €303 billion) struggled to stay relevant in the age of the smartphone. In an interview with The Wall Street Journal, Alastair Curtis, Nokia’s chief designer from 2006 to 2009, had some insight into why Nokia’s R&D operations could never quite seem to get it right.
“You were spending more time fighting politics than doing design,” Curtis said. Curtis would go on to blame the organizational structure, adding that “it was hard for the team to drive through a coherent, consistent, beautiful experience.”
Oh, and here’s a look at how much money they were spending on R&D:
Obviously, Nokia didn’t have a simple innovation issue. We’re talking about an org-structure issue. It’s not just about spending the most money or having the most brilliant people on your team. It’s about getting everyone on the same page.
Here’s an easier way to think about it. Are there plenty of aspects that go into creating the perfect org-structure? Of course. But if you’re thinking like a startup, your company should be doing one thing: providing direction to your employees without stifling their innovative ideas.
So, how do you encourage interdepartmental collaboration? Well, you need everyone to have the same long-term vision in mind. That being said, you’re going to need more than just a company-wide memo from the CEO if you expect your employees to ‘buy-in’ to the company message.
You’re going to need to find a focal point. Something that every department can agree on. Your best bet? Crush those office politics by putting the focus back on the customer.
Using a service like Sprinklr is a great place to start. Sprinklr firmly believes in the power of building what they call a ‘social infrastructure’. Essentially, you’re removing as many barriers as you can between your employees and your customers.
As if that wasn’t enough, Sprinklr also has the added benefit of simplifying social media and (here’s the kicker) enabling your employees to collaborate across multiple departments. In this particular case, thinking like a startup is the cure to office politics.
As a startup, what’s your number one priority? That’s right, your customer. Make it easy for your team to see the big picture and you’ll be amazed by what they can accomplish.
Stability: The Second Pillar of eCommerce Evolution
“Wait, I thought that enterprises were all about stability already!” Well, you’re almost right. The average enterprise definitely believes in minimizing risk. Sadly, that mentality usually leads most enterprises to take more traditional approaches.
Confused? Okay, here’s a perfect example: Johnny Cupcakes clothing company was becoming a victim of its own success. Product releases were highly anticipated, but the company’s in-house eCommerce shop kept regularly crashing from all the traffic. It wasn’t until executive Justin Hiltz decided to switch to Shopify Plus that stable product launches became the norm.
Remember: stability is about more than just avoiding losses on high-volume traffic days like Cyber Monday and Black Friday. Imagine you’re a bargain hunter who decides to check out some Cyber Monday deals. Now, imagine the frustration that you’d experience if you’re favorite company’s eCommerce site had crashed that day.
Stability is about more than just money. When your site crashes constantly, it’s easy for customers to misinterpret that as a lack of preparation/a lack of concern for the customer’s experience. Stability helps you maintain a positive brand image and keep those paying customers happy, no matter how much traffic your site gets.
Speed: The Third Pillar of eCommerce Evolution
Let’s just get this out of the way: internal communications have become a mess.
There’s nothing inherently wrong with emails. Generally speaking, they’re a decent way to communicate. Unfortunately, when your goal is to create a business with the agility to compete with startups, emails just aren’t going to cut it.
“Internal communications as a narrowly defined function and approach is dead,” says Lucy Adams, former HR and Internal Communications Director of the BBC. In fact, she went on to say that “a fundamental re-think of communications — and more importantly relationships — with our employees is needed.”
Keep in mind the ripple effect that speed has on the rest of your business. When employees can communicate amongst themselves more quickly, they can respond to changes in the industry more efficiently. C-level executives can be more aware of their employee’s questions and needs. Translation? You’re getting better ideas, and you’re getting them fast.
So, how do you do this? Well, you’re going to need something faster than email. More importantly, it needs to make collaboration easy. After all, innovation is about more than just one person coming up with something brilliant. The goal is to create an innovation-driven environment, where anyone can help create the next great service/product.
Following in the footsteps of massive enterprises like Walmart and Comcast, Slack seems poised to lead the charge on enterprise team collaboration. This office messaging app (imagine a utility-focused AOL Instant Messenger) simplifies internal communications by letting you build department ‘channels’.
Worried about communication between departments? Anyone in your company can pop into a public channel (the folks in engineering can see what everyone in marketing is up to).
Slack has plenty of other cool features (the ability to share files, integration with your favorite software, cross-device sync), but you get the idea. In a world where speed is everything, Slack may just give you the edge you need to stay competitive.
Each pillar comes with a tangible step that you can use to change your business today. But if you’re just going to use them as a form of damage control, you’ve missed the point. These pillars make up the key startup principles that enterprises need to start embracing.
Enterprises have been slowly falling behind when it comes to innovation and agility — but they don’t have to. As startups start to change the digital market landscape, one thing is clear: it’s time for an eCommerce enterprise renaissance.