Have you heard of Uber or Airbnb? Both are so called “unicorns”—companies that have soared to USD 1bn in value or more based on fundraising. The billion dollar tech start-up was once the stuff of myth, but now they seem to be everywhere, even in industries (Uber in transport, Airbnb in tourism), which seem to be somewhat traditional. The question is what are the reasons behind this and what will be next? At least two reasons should be highlighted: a bull market and a new generation of disruptive technology arising from the unlimited challenges the digital age has brought to companies.
Today, companies have two possibilities: either to ignore the significant changes or adopt and even innovate new ways of doing business. The consequences of the digital age are not only evident in marketing communication due to the significant impact of word of mouth and interactive marketing present across the variety of social media, online communities etc., but also in other elements of the marketing mix and in business models. Marketing channels are becoming more diverse and innovative, prices are much more dynamic, in part because of improved transparency, products and services are being upgraded into unique experiences and packaged as powerful brands which enable unique relationships among diverse stakeholders. Customers are no longer passive observers, but rather active players, even brand co-creators. The change in customer behaviour is just enormous.
Understanding the changes in the environment, while profiting from technological novation, seems to be the greatest advantage of start-ups. No history and tradition but instead fresh ideas, an open-mind, an understanding of the modern customer and thinking outside the box are just some of the common characteristics of today’s start-up. It appears that start-ups are gaining a significant share of the world economy and expressions like ‘innovate like a start-up’ are even being used in large corporations.
Having conducted more than 40 in-depth interviews with successful start-up founders and other stakeholders in the start-up ecosystem, presented in our new book Startup branding funnel, we concluded that everyone is aware of the changes to business resulting from the digital age. Amongst others, many Slovenian start-ups or rather, start-ups with Slovenian founders and co-founders, take advantage of these changes. Some of them were ahead of the competition and have become co-creators of global digital change, for example Celtra and its co-founder Miha Mikek. Celtra, a young and passionate team, are shaping the landscape of digital display advertising. Slovenian founders are also responsible for start-ups whose primary business is not related to the digital world however, digital change indirectly impacts their business. In many examples, such as BellaBeat or the FlyKly, products are closely connected to new technology (apps etc.) which upgrades the original function of the core product. In addition, due to digital changes, start-ups have the opportunity to reach a global audience, engage them as brand co-creators and create worldwide business.
FlyKly has made a significant innovation in urban cycling and is dedicated to making bicycle friendly cities. Its founder, Niko Klanšek, listened to potential customers from the beginning and today engages customers from all over the world to share their ideas, thoughts and opinions to develop and improve their products. Having a worldwide community is not related only to communication, but also to understanding what international customers really want and are prepared to pay. More and more, everything is data driven and supported with analytics. This is possible because of the expanded technological environment, including phones and wearables. Going beyond Slovenian customers and their thinking is therefore imperative for a business to be global.
The digital age opens new opportunities for (Slovenian) start-ups, but only those who have enough knowledge and are able to understand modern customers and invite them to be their co-creators, can gain. In a digital world, not only Slovenia but the whole world is becoming a small and connected village! And start-ups are becoming a serious threat to well-established companies!
Original article published in: The Slovenia Times: Startups and the digital age, Autumn Edition 2015, Volume 12. ww.sloveniatimes.com