Christopher Tia
Christopher Tia 18 February 2015

Innovate Like A Digital Start-Up, Impact Like A Market Leader

How companies should be responding to digital disruption and learn from the new players, before the inevitable happens.


With digital disruption and transformation already having a material impact on the bottom line of a diverse range of industries, many are wondering whether it is worth learning from the new players rather than wait for the inevitable.


Companies like Airbnb for example have already dramatically changed the face of the hotel industry. Now valued at $10B, it was only started in 2009.

The problem for established players however is not so much the acknowledgement that change is required, but in finding ways to do it without ‘throwing the baby out with the bath water’ – especially in terms of existing investments in brand equity and the complex network of customers and channels developed over many years.

A start-up’s greenfield advantage, is more often than not, few and far between. To succeed in moving with an agility of a small player but with the weight of a market leader, companies must not only take a leaf out of the playbooks of digital start-ups, they must also take the time to reflect on where they are in the digital transformation journey.

Assessing Digital Maturity

How digitally evolved a company is, will strongly influence the velocity at which it can adapt and respond to new opportunities. While the specifics of every company and industry is different, the digital maturity of an organisation can be broadly categorised into 3 stages.

Ensuring Accessibility
At this early stage of maturity, focus is typically placed on making sure the experience customers have when accessing a product, service or are trying to acquire information is not an unnecessary barrier. Enabling device responsive websites and developing mobile apps typify this stage of digital transformation.

Engaging Customers
Once accessibility is assured, companies typically look to engage more deeply throughout the customer journey. This often involves adding value or tailoring products and services, by integrating historical and behavioural data into customer interactions and interfaces. Much of this is increasingly being aided by real time Big Data predictive analytics.

Augmenting Products & Services
With an effective digital infrastructure capable of capturing and interpreting customer interactions in place, ‘real’ customer needs can be more easily identified. Informed decisions about what, how and when new products, services and innovations should be developed, is also faster to reach. This ultimately allows organisations to adopt a ‘needs based’ approach to product development and innovation – consistently shown to be a core characteristic of sustainable innovators.

Innovating Like a Digital Start-Up

Speed to market in of itself though is often not enough. The impact an innovation will have on the market is as much a factor of how quickly it can be implemented and adapted, as it is about what the nature of that innovation is.

To innovate like a digital start-up, companies must take a scientific approach to developing and investing in new opportunities – much like the eco-system from which such disruptive players are spawned. While not all may be applicable, the following are key practices companies should consider when looking to draw upon digital start-up know-how.

Iterative Business Modelling
It is often the business model behind a start-up that is responsible for its success rather than the technology. Successful start-up founders understand the need to be flexible and spend a considerable amount of time hypothesising, testing and learning about the impact of their innovation on the market place. Changes or ‘pivots’ to key planks of the business model (such as distribution channels, key partners or the nature of customer relationships) are common.

Growth Engineering
Embedding social sharing features into a product or service right from the start has allowed many digital start-ups to rapidly scale at minimal cost. Those with the greatest success have however also focused on the different types of customers needed at each stage of growth – from early adopters who help evangelise the product or service, to strategic customers serving as a ‘beach head’ to the mass market at later stages. Integrating market and customer intelligence into the Go To Market strategy of new digital products and services is thus as vital as the social strategy itself.

Staged Investment
Angel and early stage investors typically look for ‘market traction’ or early indicators that a start-up is heading in the right direction. These normally ratchet up as the company matures, with target financial and customer acquisition hurdles that need to be satisfied before further investment is provided. Companies looking to build a sustainable platform that maximises the ROI on innovation, should take a similar approach. Encompassing measurable KPIs on each innovation initiative ensures a level playing field for every opportunity in a portfolio, with only those likely to succeed making it.

Diffused Innovation
While ‘hackathons’ have become a popular means by which companies can access innovative ideas from the start-up community, many organisations have missed out on developing ideas from their most valuable source – employees.

In a digitally mature environment, there is no reason why different parts of the organisation could not ‘hack’ together their own solutions to solve domain specific or isolated customer problems. Innovation after all, doesn’t just have to be about new products and services. The need for digital innovation and transformation is a growing one for many companies.

New players are increasingly leveraging the low barriers to entry of digital technologies to rapidly change the face of an increasing number of industries. Established companies can learn and leverage a great deal from these new players. The velocity and impact of such lessons will however depend on how far along the digital transformation journey an organisation is. Time spent better understand this, is vital to unleashing the true potential a company possesses, in terms of innovative capacity and capability.

Get in touch for further information Christopher Tia is Principal of Lean Prototype Machine

A firm specialising in digital innovation & data insights. He has a strong track record of success in management and strategic advisory roles, in both greenfield and corporate environments. Chris has also worked on both sides of the start-up ecosystem - helping develop and incubate numerous cleantech, biotech and digital start-ups, as well as assisting early stage angel investors with market due diligence on portfolio investment companies.

Chris brings with him a wealth of experience across a broad spectrum of the ICT industry, having worked with global organisations and leading enterprises across the Asia Pacific such as IBM, HP, Cisco, Avaya and Telstra. Chris’ qualifications include B. Laws (Honours), B. Sc (Computer Science) and a Masters of Commerce. His industry certifications include being a Rapid Miner Analyst (data mining and rapid predictive analytics), Prince2 (Practitioner) Project Manager, as well as being a Google Adwords and Bing Ads Accredited Professional.

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