Everything starts with the question: “what’s next in the company’s digital growth strategy?” We hear this question a lot in board rooms. Only very few corporates have a clear plan – and even if they have, markets and competitive ecosystems can change quickly. The best companies always challenge their plans and have a structured strategy process to update their plans continuously.
Some companies skip the thinking about “what” because they do not trust their digital capabilities and take a rather passive approach betting on outside-in methods (e.g. accelerator programs, corporate venture capital funds, etc.). However, in order to provide your shareholders with a crisp answer to this question, we at Stryber believe that the core of your company’s digital growth should be driven by your strategy inside-out.
There are multiple options how to ensure that your company has a valid answer to this question. For instance, in many industries innovation does not typically originate from your home market. And you do not have to be an innovation leader to drive digital growth – sometimes adapting proven business models in your market will just do the job. Infamous company builder Rocket Internet builds its entire business on these market asymmetries (with a market cap of EUR 4 bn today).
Stryber co-founder and partner Alex has helped PubliGroupe (PG), a Swiss media sales house, to derive a key digital growth initiative from a structured process in seven steps resulting in a new line of business.
The corporate part of the process starts with a board level discussion and review of your company’s strategic framework, which can be included in your existing corporate strategy process. The goal is to get or renew a commitment of your stakeholders towards some guidelines, which are clear enough but allow some flexibility further in the process. In order to bring these guidelines to an actionable point and to identify possible strategic growth areas, you will have to do some heavy lifting in research and analysis – benchmarking, expert interviews, and workshops are useful classic strategy methods to apply. It is import to understand the relevant ecosystems in detail and nail down hypotheses about the most attractive business models you can go after. Once you have the innovation topic identified (tip: identify a clear winner, but also prepare for an alternative), you will have to make a plan for the “how”, i.e. in a first step: make or buy. Obviously, this discussion must be driven by the characteristics of the respective topic and the appetite for risk but also market reality. In a technology-driven game, valuations of startups can rise quickly – even beyond your own market cap. In our PG case study (and actually in another case we were supporting, too), the preferred solution was to partner with a player, who added a missing element and enabled a fast go-to-market of the business model. MediaMath, an US-based technology company, provided the technology layer to the business model, while PG provided the service layer.
When starting the startup part of the process, you will have to adjust the next steps to the specific characteristics of your endeavor. In our case study, the startup Spree7 was not the first one to the market but entered at that time with some specific competitive advantages baked into the business model (not to be disclosed). Therefore, the initial setup or minimum valuable product (MVP) was already very advanced as compared to a typical startup MVP. In situations where you are adapting a proven business model to your market, two success factors are key: a valid hypothesis regarding a winning strategy and speed in testing it. More often than not you are not the only player among your peers, company builders, or startups going after this opportunity. Getting first customers and adapt the product to the market needs quickly is essential. In our case study, we literally activated everybody in our personal networks and generated first customers even before we had the Internet up and running in our Berlin office. This provides you with valuable insights on how to prepare for growth – in marketing & sales, product and operations. Once you have understood the necessary adjustments, you can provide your board with a reasonably solid business plan bringing the process back to compliance with your corporate working mode.
Note: PubliGroupe has been acquired by Swisscom in 2014, Spree7 has been acquired by MediaMath in 2015.