Spectacular Crowdfunding Fails And Their Impact On Entrepreneurship

CF
Follow us

CF

ContentFlo is a knowledge property that captures the trends in digital, technology and marketing from across the industry.

ContentFlo shares perspectives and insights that matter to enterprises in the digital economy.
CF
Follow us

This post was originally published on Toptal.com BY NERMIN HAJDARBEGOVIC – TECHNICAL EDITOR @ TOPTAL. Click here to read. Republished with permission.

Before I proceed, let me make it absolutely clear that I have nothing against crowdfunding. I believe the basic principle behind crowdfunding is sound, and, in a perfect world, it would boost innovation and provide talented, creative people with an opportunity to turn their dreams into reality.

Unfortunately, we live in the real world, and therefore it’s time for a reality check:

Reality /rɪˈalɪti/
Noun

  1. The state of things as they actually exist.
  2. The place where bad crowdfunded ideas come to die.

While most entrepreneurs may feel this mess does not concern them because they don’t dabble in crowdfunding, it could have a negative impact on countless people who are not directly exposed to it:

  1. We are allowing snake oil peddlers to wreck the reputation of crowdfunding and the startup scene.
  2. Reputational risks extend to parties with no direct involvement in crowdfunding.
  3. By failing to clean up the crowdfunding scene, we indirectly deprive legitimate ideas of access to funding and support.
  4. When crowdfunded projects crash and burn, the crowd can quickly turn into a mob.

But Wait, Crowdfunding Gave Us Great Tech Products!

Indeed, but I am not here to talk about the good stuff, and here is why: For every Oculus Rift, there are literally hundreds of utterly asinine ideas vying for crowd-cash.

Unfortunately, people tend to focus on positive examples and overlook everything else. The sad truth is that Oculus Rift is a bad example of crowdfunding, because it’s essentially an exception to the rule. The majority of crowdfunding drives doesn’t succeed.

How did a sound, altruistic concept of democratizing entrepreneurship become synonymous with failure? I could list a few factors:

  • Unprofessional media coverage
  • Social network hype
  • Lack of responsibility and accountability
  • Lack of regulation and oversight

The press should be doing a better job. Major news organizations consistently fail to recognize impossible ideas, indicating they are incapable of professional, critical news coverage. Many are megaphones for anyone who walks through the door with click bait.

The press problem is made exponentially worse by social networks, which allow ideas to spread like wildfire. People think outlandish ideas are legitimate because they are covered by huge news outlets, so they share them, assuming the media fact-checked everything.

Once it becomes obvious that a certain crowdfunding initiative is not going to succeed, crowdfunding platforms are supposed to pull the plug. Sadly, they are often slow to react.

Crowdfunding platforms should properly screen campaigns. The industry needs a more effective regulatory framework and oversight.

Realistic Expectations: Are You As Good As Oculus Rift?

Are you familiar with the “Why aren’t we funding this?” meme? Sometimes the meme depicts awesome ideas, sometimes it shows ideas that are “out there” but entertaining nonetheless. The meme could be applied to many crowdfunding campaigns with a twist:

”Why are we funding this?”

This is what I love about crowdfunding. Say you enjoyed some classic games on your NES or Commodore in the eighties. Fast forward three decades and some of these games have a cult following, but the market is too small to get publishers interested. Why not use crowdfunding to connect fans around the globe and launch a campaign to port classic games to new platforms?

You can probably see where I’m going with this: Crowdfunding is a great way of tapping a broad community in all corners of the world, allowing niche products and services to get funded. It’s all about expanding niche markets, increasing the viability of projects with limited mainstream appeal.

When you see a crowdfunding campaign promising to disrupt a mainstream market, that should be a red flag.

Why? Because you don’t need crowdfunding if you have a truly awesome idea and business plan with a lot of mainstream market appeal. You simply need to reach out to a few potential investors and watch the money roll in.

I decided against using failed software-related projects to illustrate my point:

Most people are not familiar with the inner workings of software development, and can’t be blamed for not understanding the process.
My examples should illustrate hype, and they’re entertaining.

That’s why I’m focusing on two ridiculous campaigns: the Triton artificial gill and the Fontus self-filling water bottle.

Triton Artificial Gill: How Not To Do Crowdfunding

The Triton artificial gill is essentially a fantasy straight out of Bond movies. It’s supposed to allow humans to “breathe” underwater by harvesting oxygen from water. It supposedly accomplishes this using insanely efficient filters with “fine threads and holes, smaller than water molecules” and is powered by a “micro battery” that’s 30 times more powerful than standard batteries, and charges 1,000 times faster.

Sci-Tech Red Flag: Hang on. If you have such battery technology, what the hell do you need crowdfunding for?! Samsung, Apple, Sony, Tesla, Toyota and just about everyone else would be lining up to buy it, turning you into a multi-billionaire overnight.

Let’s sum up the claims:

  • The necessary battery technology does not exist.
  • The described “filter” is physically impossible to construct.
  • The device would need to “filter” huge amounts of water to extract enough oxygen.

Given all the outlandish claims, you’d expect this sort of idea to be exposed for what it is within days. Unfortunately, it was treated as a legitimate project by many media organizations. It spread to social media and eventually raised nearly $900,000 on Indiegogo in a matter of weeks.

Luckily, they had to refund their backers.

Fontus Self-Filling Water Bottle: Fail In The Making

This idea doesn’t sound as bogus as the Triton, because it’s technically possible. Unfortunately, this is a very inefficient way of generating water. A lot of energy is needed to create the necessary temperature differential and cycle enough air to fill up a bottle of water. If you have a dehumidifier or AC unit in your home, you know something about this. Given the amount of energy needed to extract a sufficient amount of water from the air, and the size of the Fontus, it might produce enough water to keep a hamster alive, but not a human.

While this idea isn’t as obviously impossible as the Triton, I find it even worse, because it’s still alive and the Indiegogo campaign has already raised about $350,000. What I find even more disturbing is the fact that the campaign was covered by big and reputable news organizations, including Time, Huff Post, The Verge, Mashable, Engadget and so on. You know, the people who should be informing us.

I have a strange feeling the people of California, Mexico, Israel, Saudi Arabia and every other hot, arid corner of the globe are not idiots, which is why they don’t get their water out of thin air. They employ other technologies to solve the problem.

Mainstream Appeal Red Flag: If someone actually developed a technology that could extract water from air with such incredible efficiency, why on Earth would they need crowdfunding? I can’t even think of a commodity with more mainstream appeal than water. Governments around the globe would be keen to invest tens of billions in their solution, bringing abundant distilled water to billions of people with limited access to safe drinking water.

Successful Failures: Cautionary Tales For Tech Entrepreneurs

NASA referred to the ill-fated Apollo 13 mission as a “successful failure” because it never executed a lunar landing, but managed to overcome near-catastrophic technical challenges and return the crew to Earth.

The same could be said of some tech crowdfunding campaigns, like the Ouya Android gaming console, Ubuntu Edge smartphone, and the Kreyos Meteor smartwatch. These campaigns illustrate the difficulty of executing a software/hardware product launch in the real world.

All three were quite attractive, albeit for different reasons:

  • Ouya was envisioned as an inexpensive Android gaming device and media center for people who don’t need a gaming PC or flagship gaming console.
  • Ubuntu Edge was supposed to be a smartphone-desktop hybrid device for Linux lovers.
  • The Kreyos Meteor promised to bring advanced gesture and voice controls to smartwatches.

What went wrong with these projects?

  • Ouya designers used the latest available hardware, which sounded nice when they unveiled the concept, but was outdated by the time it was ready. Soft demand contributed to a lack of developer interest.
  • The Ubuntu Edge was a weird, but good, idea. It managed to raise more than $12 million in a matter of weeks, but the goal was a staggering $32 million. Although quite a few Ubuntu gurus were interested, the campaign proved too ambitious. Like the Ouya, the device came at the wrong time: Smartphone evolution slowed down, competition heated up, prices tumbled.
  • The Kreyos Meteor had an overly optimistic timetable, promising to deliver products just months after the funding closed. It was obviously rushed, and the final version suffered from severe software and hardware glitches. On top of that, demand for smartwatches in general proved to be weak.

These examples should illustrate that even promising ideas run into insurmountable difficulties. They got plenty of attention and money, they were sound concepts, but they didn’t pan out. They were not scams, but they failed.

Even industry leaders make missteps, so we cannot hold crowdfunded startups to a higher standard. Here’s the difference: If a new Microsoft technology turns out to be a dud, or if Samsung rolls out a subpar phone, these failures won’t take the company down with them. Big businesses can afford to take a hit and keep going.

Why Crowdfunding Fails: Fraud, Incompetence, Wishful Thinking?

There is no single reason that would explain all crowdfunding failures, and I hope my examples demonstrate this.

Some failures are obvious scams, and they confirm we need more regulation. Others are bad ideas backed by good marketing, while some are genuinely good ideas that may or may not succeed, just like any other product. Even sound ideas executed by good people can fail.

Does this mean we should forget about crowdfunding? No, but first we have to accept the fact that crowdfunding isn’t for everyone, that it’s not a good choice for every project, and that something is very wrong with crowdfunding today:

  • The idea behind crowdfunding was to help people raise money for small projects.
  • Crowdfunding platforms weren’t supposed to help entrepreneurs raise millions of dollars.
  • Most Kickstarter campaigns never get fully funded, and successful ones usually don’t raise much money. One fifth of submitted campaigns are rejected by Kickstarter, while one in ten fully-funded campaigns never deliver on their promises.
  • Even if all goes well, crowdfunded products still have to survive the ultimate test: The Market.

Unfortunately, some crowdfunding platforms don’t appear eager to scrutinize dodgy campaigns before they raise heaps of money. This is another problem with crowdfunding today: Everyone wants a sweet slice of the crowdfunded pie, but nobody wants a single crumb of responsibility.

That’s why I’m no optimist; I think we will keep seeing spectacular crowdfunding failures in the future.

Why Nobody Cares About Your Great Idea

A wannabe entrepreneur starts chatting to a real entrepreneur:

“I have an awesome idea for an app that will disrupt…”

“Wait. Do you have competent designers, developers, funding?”

“Well, not yet, but…”

“So what you meant to say is that you have nothing?”

This admittedly corny joke illustrates another problem: On their own, ideas are worthless. However, ideas backed up by hard work, research, and a team of competent people are what keeps the industry going.

Investors don’t care about your awesome idea and never will. Once you start executing your idea and get as far as you can on your own, people may take notice. Investors want to see dedication and confidence. They want to see the prototypes, specs, business plans, research; not overproduced videos and promises. If an individual is unwilling or incapable of making the first steps on their own, if they can’t prove they believe in their vision and have the know-how to turn it into reality, then no amount of funding is going to help.

Serious investors don’t just want to see what people hope to do; they want to see what they did before they approached them.

Why not grant the same courtesy to crowdfunding backers?

This post was originally published on Toptal.com BY NERMIN HAJDARBEGOVIC – TECHNICAL EDITOR @ TOPTAL. Click here to read. Republished with permission.

Bootstrapped: Building A Remote Company

CF
Follow us

CF

ContentFlo is a knowledge property that captures the trends in digital, technology and marketing from across the industry.

ContentFlo shares perspectives and insights that matter to enterprises in the digital economy.
CF
Follow us

This post was originally published on http://www.toptal.org. Click here to read the post on Toptal.org       Published by JAN SCHULZ-HOFEN – FOUNDER & CEO @ PLANIO

If you ask me, working remotely rocks. I’m currently writing from a small beach bar located on a remote island in southern Thailand. Looking up from my laptop, I see nothing but the endless ocean and its crystal clear blue waters. I’ll be enjoying this morning undisturbed and focused on my work because the rest of the team hasn’t even gotten up yet. Time zones work out really well for distributed teams.

My colleague Thomas recently talked to 11 thought leaders in project management about the impact of remote work on a company; some scrum experts argued that distributed teams could work together effectively while others came out strongly against it.

I understand the concerns; you can’t just open up the office doors and release everyone into the wild. It’s not guaranteed that you’ll end up with a thriving business. Marissa Mayer at Yahoo famously axed remote work in 2013 after feeling that some employees abused it.

So how does a tech company get this working remote thing right? Read on. The following is based on our story at Planio and how we made it work.

Enter Planio, my remote company
There are a number of things which motivated me to start my current company. Breaking away from client work while retaining all the benefits of being a location independent freelancer was one of them.

In 2009, I was sitting in the shadow of a cypress grove situated in a beautiful Mediterranean-style garden overlooking the rolling hills of Tuscany, working hard on a new side project of mine: Planio.

It’s a project management tool for people like me: developers. Planio helps make client projects more organized and transparent all while reducing the number of tools and platforms needed to do the job. Planio is based on open-source Redmine (an open source Ruby on Rails-based software project), which I’ve used remotely with my own clients since its very beginnings. So, in a way, remote work is already in Planio’s DNA.

Fast forward to today, and my small side project has grown into a real company. We’re a team of 10 now, serving more than 1,500 businesses worldwide. We have an office in Berlin, but many of us work remotely.

In this article, I’ll dig into the principles, tools and lessons that have helped us along the way. After reading it, I hope you’ll be able to architect your software company so it’s remote-friendly right from the start.

“Talk is cheap. Show me the code.” – Linus Torvalds
Every Thursday we have an all-hands conference call where we discuss what we did the previous week and what’s coming up next.

At the beginning, we spent a lot of time discussing ideas before deciding on what to do, but we found that it’s a lot harder when some team members are on a poor quality telephone line and you can’t see them.

Now, we often just “build the thing” and then discuss it – we create a working prototype with a few core ideas and then discuss that. For instance, we recently hit some performance issues with our hosted Git repositories. Instead of discussing and analyzing all the possible ways in which we could potentially save a few milliseconds here and there with every request, my colleague, Holger, just built out his suggested improvements in a proof-of-concept on a staging server to which we directed some of our traffic. It turned out well and these ideas are going into production.

This method focuses everyone’s minds on action rather than talk. The time invested in writing code is paid back in less time spent talking in circles.

Use Text Communication
Real-time communication punishes clarity. Instinctively calling a colleague when you need something is very easy, but it’s not always your best course of action. I can’t remember the number of times I’ve started writing an email or a Planio ticket for a problem only to solve it myself just while writing it down.

Zach Holman, one of the first engineering hires at GitHub, agrees: “Text is explicit. By forcing communication through a textual medium, you’re forcing people to better formulate their ideas.”

Text communication also makes you more respectful of each other’s time, especially when you’re living multiple time zones away. Immediate communication can be disruptive; the person might be in the middle of figuring out why the last deployment went wrong. With an email, s/he should be able to consider your write-up at a more convenient time.

Be as Transparent as Possible
Time spent worrying about office politics isn’t conducive to shipping working software, and transparency promotes trust. It’s no coincidence that many remote-by-design companies, such as Buffer, have radical transparency. In the case of Buffer, it shares revenue information and the salaries of all its employees.

Automattic, the company behind WordPress.com, also emphasizes transparency. In his book, The Year Without Pants, Scott Berkun shares his experience working remotely for Automattic, and that all decisions and discussions are internally available to employees in its P2 discussion platform as part of its emphasis on transparency.

The chat feature in Planio works in a similar way. Discussions are open for everyone to see and chat logs are linked automatically from the issues discussed so nobody is left out; even new hires can read up on what previous decisions were made and why. When I started building the chat feature, I considered adding a feature for chatting privately with others, but when we discussed it as a team, we ended up leaving it out because we wanted to keep team communication as transparent as possible.

I think transparency is critical for remote teams. For example, imagine you’ve just joined a team of remote developers. Perhaps you’ve never met your new colleagues. You don’t know the unspoken rules of behavior. You might be worried about whether you’re doing a good job. Are your teammates actually being sarcastic or do they really mean their compliments? Is everyone privately discussing how good of an engineer you are?

Digitalize Your Systems
We choose our services based on what they offer by way of online platforms, from telephone providers to banks (many of them will even offer a small financial incentive for going paperless, plus it’s great for the environment, too). I’m lucky to have a lawyer and an accountant for Planio who are comfortable sending emails or messages with Google Hangouts instead of summoning me to their offices. (I strongly recommend you ask about this at the first meeting.) Bonus points for getting them to sign up with your project management tool and become a part of your team!

We’ve even digitized our postal mail; at Planio, we use a service called Dropscan that receives our letters, scans them and forwards the important ones to the appropriate person. You don’t want to your friend to pick up and read them out over Skype. If you cannot find a mail-scanning provider in your city or country, some coworking spaces offers virtual memberships to maintain a physical mailing address while you’re away.

For those companies sending out mail, there are services available so that you never have to visit a post office again. We use a German printing company with an API that automatically sends a letter along with stickers to each new paying Planio customer. It’s something people love, and we don’t have to print and mail a thing. International alternatives include Lob and Try Paper.

Should You Have a Digital Presence Mandated?
In a co-working space on the tropical island of Koh Lanta, Thailand, I noticed that someone in a support role for a major e-commerce platform was constantly on a live video feed with the rest of the team. Sqwiggle offers a similar “presence” functionality for remote teams.

I suppose mandating that all employees are on video while working might be based out of a fear that employees abuse remote work arrangements. In my experience, that’s not the case. At the tropical co-working space, there’s a certain urgency in the air, despite the laid-back clothes and coconut drinks. People are quietly focused on their laptops; it’s as if they want to make sure remote work delivers results, so they can stay out of a fixed office for good.

We found that we don’t need a digital presence because we have a great level of trust among everyone on the team. I also think that it’s paramount to respect everyone’s privacy. If your company is moving from an all-on-site setting to remote work, a digital presence might help the more anxious managers to overcome any trust issues.

Choose Bootstrapping over Venture Capital
Most venture capitalists are looking for outsized returns, so they’ll prefer an intense short burst of 12-months’ work from a team over a more sustainable pace. Front App, a startup funded by the Silicon Valley accelerator Y Combinator, rented a house in the Bay area for their three-month stint in the Y Combinator accelerator program. The goal is to optimize for evaluating a business idea quickly.

Given the outsized return mindset, you may have a hard time convincing a venture capitalist to fund you when you’re working from a beach in Cambodia. This is why many venture-backed startups (such as Buffer or Treehouse) that use remote work built leverage first. Buffer was profitable before taking on investment while Ryan Carson, the founder of Treehouse, had already proven himself with a previous startup.

Here’s a better way than venture capitalism: bootstrapping. It means financing your company with revenue from initial customers. In my opinion, it’s by far the superior approach because it enables you to build your company on your own terms and remain in control. However, it often requires working two jobs or freelancing on the side while you get your company started. It took me about two years working on both Planio and client projects (via my software development agency LAUNCH/CO) to get going, but it was well worth it.

Bootstrapping also forces you to build a business that generates revenue from the very beginning, which I find much healthier. Hint: Building a B2B SaaS makes this much easier than creating a consumer app because businesses are far more willing to pay monthly subscriptions if it adds value. You have to sell a lot of consumer iPhone apps at $0.99 to cover monthly payroll for even the smallest of teams.

Price Your Products Strategically
One of our first clients was a massive technology company with billions in annual revenue. Obviously, I was delighted that they’d choose us over much bigger, more established competitors. They’re still a happy customer, but we have moved away from very large enterprise accounts; I’ve found that they require a lot of hand-holding and in-person meetings before they’ll become a customer.

As Jason Lemkin points out in his article on scaling customer success for SaaS, when you have big enterprise accounts, someone will have to get on a jet to visit them twice a year. If you’re a small company of two or three people, that person is going to be you, the CEO, the CMO and the CSO all rolled into one overworked hamster.

Keeping your pricing model within the rough bounds of a $49/$99/$249 model as suggested by developer-turned-entrepreneur Patrick McKenzie means avoiding having to hire an enterprise sales team, and having to earn the massive amount of capital required for it. You, the customer, don’t expect the CEO to pop in at Christmas with a box of chocolates when you’re paying $249 a month.

Build on Open Source
A venture-backed business based on proprietary software is great when your play is a “Winner Takes All” game and own the market. When you’re a bootstrapped company, open source software can give you reach and leverage you could never have achieved, otherwise.

There’s precedence of profitable tech companies building a business around open source software; Basecamp famously open-sourced Rails, guaranteeing themselves a supply of highly qualified engineers for the rest of eternity. GitHub has become a unicorn, leveraging the open source project Git that Linus Torvalds started to manage the Linux kernel sources. Our friends at Travis-CI started as an open source project, ran a crowdfunding campaign and then turned it into a remote-focused bootstrapped business (which also campaigns for diversity in tech through its foundation).

Planio is based on Redmine and we contribute many of our features and improvements back to the community. This works great in multiple ways; our contributions and engagement in the community help advance the open source project and Planio gets exposure to potential new customers. For us, it’s the most authentic way to build a brand; by showing our code and taking part in open technical discussions, we can demonstrate that we know our stuff!

Hire Proven Professionals
Hiring a fleet of interns every year makes sense only if you’re intent on scaling up your employee count as soon as you hit the next round of funding.

Outsourcing tasks is easy if it’s copy-and-paste, but you don’t want to outsource your DevOps to someone with the lowest hourly rate when you have thousands of customers relying on your servers. You’ll want proven professionals, such as those at Toptal.

Matt Mullenweg, the founder of the popular open-source blogging platform WordPress, stated that by focusing on quality means that his company, Automattic, predominantly hires experienced candidates who can handle the unstructured working environment of a remote company.

That means it “auditions” candidates by paying them to work on a project for several weeks, then hire them based on performance. Automattic has found this method is far more effective in finding the right candidates than traditional CVs and cover letters.

Emphasize Quality of Life
Work takes up a massive amount of our time, year in and year out. It should not be something that you just do to be done with; you’d probably end up wasting a huge chunk of your life. The best source of motivation and the main ingredient for great results is a work environment that’s inspiring, enjoyable and fun. Travelling, learning and engaging with people from different cultures makes work feel less of a sacrifice or necessary evil (at least in my life) than when working a nine-to-five office job.

It’s not just about travelling the world, though, there’s the personal freedom aspect. Parents get to spend more time with their kids, thanks to avoiding a two-hour commute. You don’t have to live in Silicon Valley to earn San Francisco wages. Maybe, your significant other gets a great job opportunity abroad, too. You’re not faced with the painful choice between staying at your job and continuing your career or becoming a “trailing spouse” with limited career options.

At Planio, even though many of us work remotely, we all try to meet up at least once a year in a fun location. Last year, we spent a few weeks of summer in Barcelona, and several of us met here in Koh Lanta, this year. I’m still looking for ideas for the next destination, so let me know if you have any travel tips!

What tools, ideas or techniques have you found that make working remotely easier and more effective? Leave a comment below.

This post was originally published on http://www.toptal.org. Click here to read the post on Toptal.org       Published by JAN SCHULZ-HOFEN – FOUNDER & CEO @ PLANIO

Digital Darwinism: Adapting for the Enterprise Success

Alok Ranjan
Follow me

Alok Ranjan

Alok Ranjan is a marketing specialist and management consultant based in Mumbai, India. He believes, brands are caught in a maze of technology and economic dynamics, caused by disruptive forces, which are changing the way consumers interact with brands. He blogs at www.alokr.com
LinkedIn: in.linkedin.com/in/ranjanalok
Alok Ranjan
Follow me

Latest posts by Alok Ranjan (see all)

“It is not the strongest or the most intelligent who will survive but those who can best manage change.”
– Charles Darwin

Technology disruption has ushered in a period of ‘Digital Darwinism’. An era where the evolution of technology and society is faster than the ability of enterprises to adapt. The tectonic shift in enterprise business dynamics towards adapting their business models, the democratization of technology leading to the rise in number of connected consumers, and the transformation of enterprises to digital are a manifestation of ‘Digital Darwinism.’ Enterprises involved in adapting business models, enhancing customer experiences and improving operational efficiencies are bound to succeed against the digital onslaught, which already has led to the crumbling of large enterprises, including, Kodak, Borders, HMV, and Blockbuster, etc.

In a research conducted by Nielsen in 2014, in the US, close to 85% of the online consumers refer expert content and product reviews online before making a purchase. More than 36% of the in-store purchases are influenced by digital interactions, states a report by Deloitte. Enterprises are busy creating multiple touch points to remain on the top of the mind of their consumers. Adopting digital technologies with a stated vision is the key to survival in these times when consumers occupy a driver’s seat. It is interesting to note that only 71 firms still exist from the original 1955 Fortune 500 list, while the others could not survive the technological revolution. Traditional enterprises, over a period, have failed to evolve their business models and perish while the technological impact on business kept increasing. Let us understand the impact of “Digital Darwinism” on enterprises as it happens.

Adapting Business Models

The Indian coupon deal site Snapdeal, which started as an Indian counterpart of Groupon, adapted its business model to emerge as a successful online retail store, in less than a decade. The dramatic shift is accounted for the survival strategy of Snapdeal in the recent times. Changing customer experiences, rise in internet connectivity and pervasive effect of mobile technology on consumers guided the firm to quickly adapt its business model to keep the business afloat. The fall of Research in Motion (RIM), the maker of Blackberry phones, is a perfect example of how lack of technological innovation and misalignment of business model has negatively impacted the firm.

Enhancing Customer Experiences

To augment its brand positioning, Audi, the German automaker launched in-store digital experience through Audi City. The City allows consumers to experience full model line up within the store digitally, allowing a greater brand interaction with the machine and creating a mesmerizing purchase experience for its customers. Enterprises are busy providing tailored experience coupled with developing an emotional connect with their consumers using digital tools. With customer at the center stage, enterprise digital transformation strategy is evolving towards easing the lives of their consumers.

Improving Operational Efficiencies

Commonwealth Bank of Australia launched an app., which allows customers to view residential property details by just pointing their smartphone camera towards the house. The app also provides details on the equated monthly installments for CBA loans, thereby automating processes and increasing operational efficiency of the bank. Enterprises adding technological innovation at every step of the value chain are able to address the needs of their digitally connected consumers and find themselves on the cusp of digital transformation.

Gearing up for the Digital Action

Enterprises wary of digital technology may cease to exist in the next few years and are required to holistically upgrade their strategy for competitive advantage. They need to upgrade their technology, people, operational processes and business models to include digital. As Brian Solis in his book “What’s the Future? Of Business ” states “ The future of business is not about technology, greed or short-term deals. It is about people, purposes and experiences. It takes vision. It takes empathy. It takes courage. The future of business lies in the shift from a culture of management to that of leadership. It begins with you..”

In order to gain strategic advantage over their competitors, forward looking enterprises requires to proceed with the following initiatives:

Define a clear vision for digital transformation: Enterprise leadership needs to define the roadmap for the transformation. The strategic vision should address: the demands of the connected consumers, a brand-connect strategy and optimization of business processes for a successful digital transformation. Emphasis should be on the optimal use of digital technology across the value chain to streamline processes per the industry standards.

Seek organization support for implementation: The success of digital transformation depends on eliminating enterprise silos across departments and software applications. A flexible and innovative culture can help enterprise teams to propagate the strategic vision to a wider audience both within and outside the organization. The need is to focus the team towards customer centricity, which can help organizations overcome the initial challenges during the transformation process.

The transformation process maturity: Digital is still in its infancy. Technological advancements will consistently shape the digital transformation processes. As digital technologies mature, the strategic vision should incorporate changes to address new business needs. Leadership teams will require to seek active participation of their organizational teams, as the technology matures.

The Future Beholds

The digital onslaught experienced by enterprises in the 21st century is the beginning of a new age industrial revolution, which will lay the foundation of the disruptive firms. With customer experience influencing an enterprise business strategy in a big way, leadership team must pass the digital baton to a larger team for proper dissemination of the strategic vision. Successful enterprises are constantly innovating, developing and renewing their products and services in tandem with the customers demand. At a time, when traditional businesses are no longer relevant to keep their customers loyal, digital has created opportunities for enterprises to adopt, adapt and survive the Digital Darwinism, over a period.

Image credit: Pixabay

Write for us: Click here.