For many scale-up companies, digitizing their business model has become the top focus in the one year since COVID-19 created the biggest disruption to our economy of the century. These new challenges required new ways of thinking and doing, and a reassessment of whether their digital experiences were serving customer needs in optimal ways.
Some scaling companies have experienced in their online business, while others have struggled to sustain their relevancy and connection to customers. In both cases, however, a focus on digital experience innovation is essential to support growth targets. In order not to of this challenging time, digital platforms that support business goals are essential.
I’ve seen plenty of scale-ups with digital platforms that work well enough to get them to a certain size or juncture, usually the bare minimum to validate market fit. When the time comes to think about replatforming, either because the company is riding a wave of growth or as a result of market disruption, there is naturally a lot of apprehension and indecision. This hesitancy to move forward with replatforming seems to stem from feeling the need to have a well-grounded business strategy with a clear five-year-plan, before a single dollar is spent on technology.
This may appear ideal, but it’s shortsighted. In most cases, the existing technology will present significant blockers to any kind of scaling plans, and it’s often critical that replatforming happens quickly. If there’s one thing we now know in software development, it’s that the best laid plans will change well before the end of the project. Regardless of how the future business strategy develops, the scale-up must modernize their platform because it's no longer satisfying even current needs.
In fact, technical debt can be a significant barrier to scale and innovation. Companies do need to identify which parts of their technology ecosystem are most critical to near-future goals, but getting started with a modernization does not require a fully-formed business strategy. Conversely, an organization that postpones modernization may well discover an inability to adapt quickly, their technology change requiring so much time and effort that the emerging strategy misses its market window.
To move at the speed of the market, companies must accept that technology strategy and business strategy can, and should, happen in parallel. Even without certainty about their future business model, it’s possible to invest in fixing the technology problems they have today—and to choose platforms with the flexibility to handle the future of the business, even without the full picture.
To move at the speed of the market, companies must accept that technology strategy and business strategy can happen in parallel.
The parallel path
So how do you start to implement a parallel strategy? You need the right partner.
In order to prevent your technology problem from being mired in a strategy problem, an expert partner can build your new platform in a way that allows for easier expansion in the future—wherever your business may go.
Your technology and business strategy are linked, but it’s possible to loosen the dependency. Leadership teams can fall into a trap where neither the business strategy or the technology strategy moves forward until critical problems force their hand. To proactively solve this problem, your leaders need to embrace an agile business strategy: Building your technology platform with agility and modularity, and embracing that the business strategy will change as the market changes. The start-up mentality needs to be extremely pragmatic and cost-efficient, which is why the starting point tends to be built-to-fit. Scaling, however, requires an opposite mindset – one that is rapidly and efficiently adaptable to change in the market.
When we work with scaling companies, we often run a two-week discovery process to help us understand the unique business and its complexities, gain a refined understanding of the market for their digital products, and use this deeper understanding to recommend a path for the technology strategy that balances specificity to the current business model, with flexibility for the future.
In recommending this digital roadmap, we help businesses make a series of strategy decisions that inform their technology decisions. True to agility, we don’t offer a pre-packaged solution that locks our clients into their decisions for a period of years. Instead, working together, we build a solution that addresses the critical, core features of the business model, and then iterate on it as we learn more about the business and client team capabilities. This foundation is often one that addresses scalability, technical flexibility, and durability by building infrastructure in the modern cloud in a modular, componentized approach.
Though it may be counterintuitive to more traditional businesses, this is risk mitigation. A fixed solution is one that can’t see around corners—predicting a period of online-only shopping, for example—or one that can easily pivot if you decide to refocus your core business. Fixed platforms and solutions are not a safe bet in an age of rapid innovation. With an adaptive approach to your digital platforms, you can make technology decisions in service of the business, without a fixed understanding of the long-term business model.
Technological agility loosens the coupling between business strategy and technology strategy. As you evolve the business strategy, you can evolve your business product accordingly. In an agile mindset, the technology shifts from a dependency to an enabler, and its foundation is not dependent on the business strategy being set.
For an example of the success of the parallel path, look to Netflix’s model. The founders “were never happy with the way the business model was at a given time but were always looking where the market was headed in 5 to 10 years.” Instead, they focused on technological growth, and a lean approach to their digital services. From 2007 up to now, the company has embraced open source technologies and an iterative model, to continue chasing exponential growth.
The takeaway is that Netflix did not have the right solution for either their technology or business model when they began on their path to becoming a subscription service. However, an iterative approach to consistently improving business and technology in tandem, combined with a relentless focus on the customer, steered them towards their in 2020.
Creating customer focus
The good news is that have democratized enterprise-grade technology, and made it accessible to much smaller businesses at smaller costs. These are as accessible as they’ve ever been, and not using them to accelerate scale and flexibility is leaving the opportunity to create the best possible digital customer experiences on the table.
Choosing to pursue technology upgrades that are agnostic to your business strategy is a step that you can take right now in service of your customer experience. The goal is to think about what provides most value to the customer, then modernize those components to quickly respond to changing customer needs. Cloud infrastructure provides the needed path to low-cost experimentation and pivot, avoiding costly pre-planned expenditures, and thus facilitating rapid iteration and change.
Regardless of your near- and long-term objectives, you may never reach a point of arrival with your business strategy. It’s time to stop letting uncertainty reduce your capacity to make technology decisions, and serve your digital customers with a modern, friction-free experience. Building technology in a way that is not restrictive of future possibilities means moving forward with the market.
Many scale-ups have achieved a level of organic growth on some fairly rickety technology platforms. If your company is on the cusp of needing to scale quickly to meet market changes, don’t let the momentum created by the sudden focus on digital in the past year fade. The lessons that it imparted, including the value of digital customer experiences, collaboration and continuous improvement, are all still critical to the success of your customer platform. Agility in your combined technology and business strategy will ensure you can make independent decisions in each area that still support the goals of the other.