Future of Business

August 29, 2017

5 Reasons Why Digital Born Businesses Will Dominate the Future

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Written by: Ross Quintana
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5 Reasons Why Digital Born Business Will Dominate the Future Blog

The future of business is coming at us fast. Who will survive? Who will thrive? These are questions that businesses must be contemplating. A business that isn’t concerned about their survival is soon to be extinct. Don’t think for a minute that Kodak or Blockbuster are rare accidents on the side of the road to gawk about. The business environment is changing by the second, but there are fundamentally two groups of organizations in the marketplace today: pre-digital businesses and digitally born businesses.

Digitally Born Businesses – A business that started in the digital age. The mindset, culture, and model start with the context of current technology, trends, and marketplace volatility.

The old way of business was to become big. The bigger the better. That was a driving force behind broadcast and traditional media. Even the internal structures of pre-digital businesses were set up around how long you worked with a company, your experience, and position of top down power. Old was gold. Then the society changed. We entered a time when what is new is exciting. Customers wanted small unknown experiences, and they fell in love with innovation and early adoption. In an attempt to sell new models, the old businesses oversold the value of what is new and when that met with rapid advances in technology and social media it created a social status for newer is better thinking. This change in society mindset will eventually turn on the old businesses like a pet tiger that finally  grew up.

My friend Brian Solis calls this next innovation that is driven with higher velocity “the new new”. The fact is there is a perfect storm for entrepreneurial success and big businesses are still eating their desert while the ship is sinking. Society doesn’t often go backward, and here is why the future will be dominated by digitally born businesses.

1 Have a Current Mindset – Old thinking can alter the context of new ideas. Being current is often thought of as being disruptive. Incremental innovation is the innovation of old business models. When you have an old model, and old thinking leadership and power structures, getting current is darn near impossible. This is why so many established businesses are bringing in new younger CEOs. This create a whole new set of problems and become organizational confusion. How can an old business act young? Many established businesses are going through a midlife crisis. If you want to thrive in a current real-time marketplace you need current thinking.

2 Remodeling Has a High Cost – Trying to retrofit digital models on a pre-digital business takes time, money, and creates new problems and internal disruption. If a business manages to not get derailed from their attempt at digital transformation, they still have to deal with the opportunity cost of that transformation. Markets move fast and taking your eye off the ball for a business remodel is time digitally born businesses are using to look to the future.  While your established business pulls into a pit stop, the digitally born business races around the track. Often businesses go through many remodels in order to get current. Upgrading old models also has the problem of pouring money into something that won’t hold it’s value. Digitally patching your business while trying to drive faster can lead you to a total business failure. Bruce Rogers had a great interview with Michael Gale on why 84% of companies fail at Digital Transformation. The fact is, it is a risky, difficult, and lengthy process that can leave your business and market position at risk with no guarantee you will actually be able to execute it.

3 Starting Bold – Digitally born businesses are not weighed down by their past like pre-digital businesses. The more you have, the more they have to lose and this keeps them from taking some risks that have huge market payoffs. New businesses can try things and adjust quickly if it doesn’t work. A change can happen in an afternoon meeting with little need for complex strategy and communication deployments. In a crowded noisy real-time market environment being bold makes you stand out and creates instant relevance. The old days of leveraging your market position and lack of competition doesn’t work like it used to. Going with the standard choice was a driving factor for adoption and decision making in society for some time, but now that is replaced with the default thinking of new is better and more exciting. It’s hard to be new when you’re old.

4 Be Future Focused – You can’t look forward when you are looking behind. Old businesses are having an identity crisis. They often value their brand and image history so much that they can’t fathom changing it. Like a hoarder who seeing everything as valuable and can’t let it go, pre-digital businesses are afraid if they change who they have always been, they won’t know who they are. The core of this is because they are living on past successes and the new marketplace makes you prove yourself again. If you weren’t the leading show maker in the world, could you be amazing? If everyone didn’t know you, could you make them pay attention to your brand? If you didn’t have the assets and leverage you have could you dominate the market? These are powerful questions organizations must ask themselves. The future is more complex than the present. If you aren’t even current, you won’t be able to try and see the future. Many old businesses are delusional about thinking they see or even create the future. Expect major industry disruption.

5 Hiring Right Matters – Old (and I don’t mean in age) employees often have old thinking. Old organizations have old thinking. The hardest thing about digital transformation is often about company culture and adoption more than technology. Talent is the currency of competitive advantage and digitally born businesses don’t have the old structure of power so they are more open to being shaped by new talent. In a great report, Capgemini Consulting talks about The Digital Talent Gap and how it is impacting organizations trying to digitally transform and get current.

Top talent wants to work for a company where they are heard, valued, and can contribute to real change in the organization. The larger more established you are, the harder it is to infuse meaningful new talent because the system swallows them up and drives them away. Even if you happen to hire talent it is not practical to do this at the scale needed to really change company culture and also to appreciate the new talent hired even if you could scale it. The future is going to be dominated by talented people.

So sorry if I doom and gloomed the old-timer establishment here, but these factors are substantial in our current and near future business environments and awareness is the first step to strategic positioning and finding solutions. There is a great infographic from my friends over at Kahuna on Old Marketing vs New Marketing, check it out for some great data and positioning insight. If you are an entrepreneur or startup, you should be empowered because you are the future of business, go crush it!



About the Author

Ross Quintana
Founder of SocialMagnets, I am passionate about social media, influence, innovation, strategy, and marketing. I love to help people learn and understand the digital world. I stretch people's thinking and share my analysis of information, tools, and strategies in social media. Let's connect




 
 

 
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One Comment


  1. Ian Gertler

    Enjoyed this, Ross. I think we often see the foundation of success as innovation alone. However, that’s one element. To really “survive and thrive,” businesses must also embrace discovery and action tied to innovation. That stems from people—especially those that understand what’s needed by others (value and relevance), then delivering it. “You don’t have to go home, but you can’t stay here.” Symbolic, as this often results in leadership or the “closing time.”

    @iangertler



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