CORPORATES ARE FACING THE PERFECT STORM — STARTUP-DRIVEN INNOVATION CAN POWER GROWTH
Today, corporates face a tsunami of challenges impacting their ability to create new value and drive revenue growth. Consumers are adopting new technology faster, they’re demanding personalised services, and startups are doing a better job of providing digital solutions. Finance and efficiency-driven corporates have been banging the mass-market consumerism and globalisation drum for decades but it’s no longer resonating with consumers.
Resonating with your customer
Mobile is enabling the delivery of location-specific, personalised services, often leveraging crowd-sourced supply and demand. This combined with efficient cloud infrastructure and ubiquitous wireless networks, has changed traditional business rules. Think of the brilliance of Hailo, giving everyone a personal taxi rank on their phone — no more walking to join a queue at a physical taxi rank.
With these advances in technology, consumers, through their social channels and communities, are more quickly becoming aware of the latest, better-tailored services and are adopting them faster (at a lower cost). Whilst corporates are focused on squeezing everything they can from legacy business models, startups are delivering digitally native solutions more in-tune with consumer needs.
The $100bn startup war chest
And it’s the sheer volume of well-funded startups that should terrify corporates. The exponential decrease in the cost of creating a technology business means there are hundreds of thousands of startups. They’re not focusing on existing legacy business models and competing like-for-like against the established companies. Instead they’re savvy and are unpicking those business models and targeting small product niches to attack with an unrelenting focus and zealousness that leverages their native knowledge of the digital world.
Corporates are now struggling to compete with thousands of funded startups targeting individual elements of their service offerings. They’re used to peer competition, not guerrilla attacks. And startups are doing a better job of solving the consumer need.
Despite, and sometimes because of their resources, Corporate DNA holds back their ability to innovate. The best startups, often perceived as impoverished mavericks, have raised $100bn in 2015 with the majority of that money being directed at unpicking tired, corporate business models.
Every industry is now a technology industry
Every industry, be it health, banking, transport, hospitality or entertainment, is now a technology industry. Corporates with legacy business models need to resonate with the demands of their customers. They need to focus on startup-driven innovation.
Maybe your corporate is ready to embrace startup-driven innovation?