A ‘digital native’ company, often referred to as a ‘born-digital’ company, is an organization that starts and operates primarily or entirely in the digital world, rather than being a traditional business that later incorporates digital elements into its structure or operations. These companies are typically founded after the advent of the internet, and their business models are deeply rooted in digital technologies.
Although there are examples of digital native companies founded in the 1990s and early millennium period, most of the companies we now think of as digital native are fairly recent creations. Digital native companies take advantage of digital technologies to disrupt traditional business models and create new ways of delivering value to customers. Examples include well-known companies such as Amazon, Netflix, Uber, and Airbnb.
Although Amazon is a very different business to Airbnb, there are some common characteristics that are shared by almost all digital native companies.
Digital at the core of the business
Digital technology is at the core of their business model and operations. They use digital tools for core business functions, from product development and manufacturing to marketing and customer service.
Agile
Digital native companies are often characterized by their agility and ability to adapt quickly to changes in the market or technology landscape. A good example is the long list of failed Amazon ventures. Amazon has achieved a reputation for agility and innovation by trying many new ideas and cancelling them as soon as it is clear they are not working.
By testing so many different ideas Amazon creates many new innovative products and ventures, but this approach requires the agility to test ideas and quickly retire the ones that are not working.
Customer-Centric
These companies often focus intensely on the customer experience, leveraging digital tools to personalize and enhance the customer journey. This is a key difference with most of these companies – they are able to design a new customer experience from the ground up and don’t need to conform to historic business traditions.
This can be seen in industries such as banking, where traditional banks have created digital interfaces, but largely following the same business processes used over many years. Digital banks can build a new account or loan experience based on what a 21st century customer may expect. There is no system or technology legacy to worry about.
Data-Driven
These companies usually leverage big data and analytics to inform decision-making, understand customer behavior, and drive innovation. They usually use cloud-based systems to ensure they have very flexible and scalable infrastructure.
Scalability is often just a question of supporting customers in their local language. The App Store model used by Apple and Android now allows a company basing most services on an app to go global almost immediately.
Innovation-Focused
Digital native companies tend to have a strong focus on innovation, regularly creating new products, services, or business models that disrupt traditional ways of doing things.
This focus on change is a common theme. Digital native companies are not tied to traditional processes or infrastructure. They can explore their industry and define new standards based on a customer-centric perspective.
How To Grow Without Breaking
Digital native companies are flexible and have a focus on innovation and customer-centricity, but this is not an automatic ticket to business success. Over 2,500 new apps are launched on Google Play every single day – many of them will be aspiring digital native companies launching a new idea into the world.
These companies need to be noticed, supported by new customers, and then they have to face the same challenges as all new businesses. They must face up to competition, regulatory issues, and the need to continuously innovate and adapt to changing customer expectations and technological advancements.
Digital native companies have an additional challenge. How do they grow without breaking?
This is a particularly acute challenge for these companies because they will often experience a period of hypergrowth when the service becomes popular. The ability to launch in many different markets at the same time adds additional complexity because demand may be global and customers will require support in many different languages.
Hypergrowth is typically defined as annual revenue growth of more than 40%, but as we have seen with many successful digital brands, this rate of growth can often be much higher and can last for several years.
The central question in this article is how digital native brands can grow successfully without breaking – what this really requires is the ability to deal with hypergrowth and the extreme flexibility and scaling it requires.
If we focus solely on the customer journey, rather than every single aspect of what a company needs to manage hypergrowth then it is already clear that several steps can mitigate the risk of failure.
Find a partner
Many digital native startups retain an internal customer service process. This makes sense when exploring a new service or solution, but when the business hits a period of rapid growth, or even hypergrowth, then it can be extremely difficult to scale an internal customer service function.
A partner will have robust quality and reporting processes in place. They are likely to have access to offshore resource to help facilitate global expansion. They should have access to remote workers working from home, allowing for very rapid recruitment and onboarding.
It is critically important to work with your customer service partner on future plans and projections so they are aware of expected growth. A rapid increase in the size of a customer service support team will need trainers to be on board before additional team members, so it is advantageous to trust each other and plan accordingly.
Plan Strategically
To prepare for hypergrowth, a company must have a clear and strategic plan. This includes understanding the market, developing a robust business model, and setting clear short-term and long-term goals. The plan should be flexible enough to accommodate changes as the company grows.
This is why a trusted customer service partner is so critical to help achieve successful growth. By planning ahead and developing a joint customer focused plan the client and partner can ensure that all customer-facing function are scaling quickly enough to meet demand.
Focus on Customers
Rapid growth is exciting. There is a temptation to encourage more growth by focusing attention on sales and marketing, but this will mean that customers start noticing a deterioration in the level of service they are receiving. Often this will be so severe that it drives customers away.
Companies can’t afford to lose sight of their loyal customers. It’s important to maintain a strong focus on customer needs and feedback, and to ensure that the company’s growth doesn’t compromise the quality of its products or services. A specialized customer service partner with solid experience of rapid growth can be extremely valuable in this situation.
Growing a business without breaking is not easy, but it can be easier if you plan strategically to manage customer interactions right from the start. An ad-hoc approach to customer service will not be acceptable as you scale.
An experienced partner can help with expansion plans. They can ensure that customers are being serviced in their local language. They can even use technology to support niche languages that are important, but low volume.
Rapid growth creates pressure throughout any business. Sales and marketing can be overrun with activity. The research and development process is under pressure to develop new products that can take advantage of the growth. Most importantly though, the direct connection to customers on the service channels must continue to be managed well.
Finding a partner that can help you on this journey is essential. Trusting this partner as an expert adviser that can help you deliver a fantastic experience for your customers is the key to managing a difficult period where rapid growth defines everything.
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