Undoubtedly, we currently live in a period of unprecedented change and disruption. We see many successful start-ups that trigger the disruption and benefit from the new opportunities.
But why are so few new businesses created from existing incumbents? What is required to create something so radically new that it attracts massive audiences and threatens existing business models?
With the emergence of powerful social media platforms like Facebook and Snapchat, the media consumption has significantly changed. Advertising dollars follow eye-balls. This old rule is becoming a hard evidence for existing media players who see advertising budgets shift towards these new digital platforms.
Traditional media players struggle to transform their existing print models to the digital world. Less than 10% of the revenues of newspapers worldwide is generated from digital business. What can they learn from start-ups to succeed?
Few existing players succeed to create digital success stories
Traditional publishers and media, who rely heavily on advertising income, are under increasing pressure. They are forced to transform and radically reimagine their business models. They have to re-invent themselves and try to tap into new revenue sources. This is an extremely difficult and tedious exercise, and few incumbents succeed.
But why is this the case? Why is it so hard for companies, which have been very successful in the past, to transform themselves in the digital space? What are the barriers? What is the magical formula that many start-ups seem to have by nature, but that is extremely difficult for existing players to find or acquire?
In the digital space, speed and innovation capability are key success factors. Many traditional companies have a slow hierarchical decision-making structure, which is a strong impediment for digital innovation. Some organizations increase the speed of execution and decision-making significantly by creating a separate unit. Companies like Axel Springer and Bauer create incubators and accelerators. Very few of these carve-outs have proven to be extremely successful in creating successful new digital ventures on a larger scale. Quartz, a spin-off of the ailing The Atlantic is a lonely exception.
So what’s wrong with this approach?
In order to succeed in the fast moving, opportunity rich digital space, traditional companies need to attract other talent. People who fundamentally see the world in a different way. People who have the ability to formulate different beliefs.
“Because the people who are crazy enough to think they can change the world, are the ones who do.”
Nobody has ever better described the type of characters you need to create something radically different and new than Apple in its epic 1998 ad campaign ‘Think Different’. At the end of this article, you can find the entire ad copy. Still a source of inspiration for many entrepreneurs, artists and creative people.
To succeed in creating a large scale digital venture, you have to start by attracting this kind of weird talent. You have to offer them the freedom to operate and create. You have to accept their failures. You will enjoy their successes.
If you can’t integrate them within your own organization easily, you most likely will have to collaborate and network with start-ups. Such partnerships can take multiple forms: from commercial collaborations, through joint ventures, joint research projects or full acquisitions.
It might mean that you have to enter totally new markets. It will definitely change your fundamental beliefs about your industry. In any case, it will most likely be a culture shock with respect to your current organization.
If you are serious about creating a large digital business, you cannot afford to wait. You have to start now and Think Different yourself. And work together with the crazy ones, the misfits, the troublemakers. You simply can’t ignore them.