From Uber to Instagram, digital native companies are massively successful – what’s the recipe to their success and what can we glean from them?
From Uber to Instagram, digital native companies are massively successful – what’s the recipe to their success and what can we glean from them? Hans Brown, APAC Head of Technology for the Bank of New York, Mellon, Singapore, shares his insights at the recently held Singapore Healthcare Management Congress 2018.
“Digitisation has changed everything.”
BMW, Marriott, Disney and Kodak.
Four quintessentially traditional giants – each with a century of operations and experience under their belts, each a major player and employer in their respective industries.
Uber, Airbnb, Facebook and Instagram.
Four digital native companies – their combined years in operation do not amount to even half a century, their staff strengths are modest, but each have net worth’s on par with the established, traditional companies.
What makes them so different? How do they do it?
“They do it by creating something amazing, something that makes their service unique to you,” says Mr Hans Brown, APAC Head of Technology for the Bank of New York, Mellon, Singapore.
Digital native companies may not have much to boast about in terms of experience or massive loyal client bases, but they have a different edge – they’re great at being innovative and focusing all their resources and expertise on a specific sliver of their service. They are also agile, changing directions quickly, switching and pivoting at the drop of a hat. These companies can create a product or service that customers might not even know they want or need.
Another example of a digital native that has this down pat is 23andMe, an American genomics and biotechnology company based in California. Founded in 2006, the company became the first to offer autosomal DNA testing for ancestry. It’s a simple idea – you pay US$99, send in a sample of your saliva, and they email you a personalized analysis of your DNA. 23andMe’s direct-to-consumer genetic testing business was named Invention of the Year by Time magazine in 2008. Today, the service is available in 48 countries across the world, has 5 million users and is estimated to be worth more than $1 billion.
Not every digital native is successful, but what makes the ones that are, truly so?
“There is one ingredient that they all need to be successful, and that one ingredient is the ability to have a platform.” Mr Brown further explains, “A mobile app is not a platform, a platform is the ability to pull together services and shape and add those services together to create bespoke packages for each customer, but at the same time, not having to create anything from scratch,” he continues. Quoting Lego as a non-tech example of a platform, he paints a picture of customers being able to freely build, connect and customize all the discrete pieces together to form the final product they are looking for, regardless if it might be something as simple as a box, or something as complex as a dinosaur. Similarly, on digital platforms such as Instagram, customers are given endless options – whether it be to share their Instagram posts to their Facebook or Twitter feeds, to use a separate mobile app to edit their photographs before posting, or even to add location tags to their posts. Simply put, platforms offer customers more connected and seamless experiences.
On top of having a platform, data analytics is also crucial in the rapid growth of digital natives and their services. With sufficient data, companies can predict how customers make decisions, and, in turn, provide what the customer is seeking.
For Mr Brown, digital native companies are just getting started, “I see a decentralised future for services, whether it’s provision of healthcare or whether it’s provision of finance, where we have the ability to shape and create the service that’s personalised to us.”
While optimistic about the future and the many potential steps companies can take toward building connected digital experiences for their clients and consumers, he cautions that mistakes are inevitable. Instead of giving up, however, he recommends we adopt the same motto that he and his team live by, “we adapt, we learn, we find out where we messed up, and we repeat as necessary.”
Mr Brown shares his thoughts about where these digital native companies have succeeded, and where they have fallen short.
Where Digital Natives Have Succeeded:
1. Defined the direction, shape and pace of innovation across all financial services
2. Succeeded as both stand-alone businesses and crucial parts of financial value chain
3. Reshaped customer expectations, setting new and higher bars for user experience
4. Successful in making improvements within traditional ecosystems and infrastructure
Where Digital Natives Have Fallen Short:
1. Overestimated customer willingness to switch away from incumbents
2. Struggled to create new infrastructure and establish new services ecosystems
3. Adaptation of the incumbents