Founder and CEO, Oxygenmat
We are living in the weird and wonderful era of tech. The progress is rapid and often overwhelming if you follow the media closely- the blockchain, deep learning, neural networks, robotics, shoppable AR and smart AI-assistants helping you to schedule meetings or choose a new pair of jeans.
Nowadays, there’s a newer, better solution available for pretty much any “stone age” business process. So, how important is it for entrepreneurs to keep up with new technologies?
It’s actually more important than many realize. Jumping on the hype bandwagon without doing much research isn’t wise. Yet, successful entrepreneurs will make it a point to dedicate at least some time to becoming aware of new technological trends, and even test driving them. Here’s exactly why.
Getting behind on technology can lead to irrelevance
In a recent study released by Salesforce, 68% of marketing heads report that customer experience is increasingly becoming the basis of their competitive efforts. This isn’t surprising. According to University of Exeter Business School, having a deep understanding of the audience you’re trying to capture is how to stay ahead of the curve. “Customers are demanding personalized experiences that make every stage of the purchasing journey easier and more relevant to them,” said Daniel Wang, CEO of Loopring, “The wrinkle? Delivering intimate suggestions is virtually impossible without adopting newer technologies. That’s why competitive businesses are actively investing in big data, analytics platforms, artificial intelligence, blockchain among other technologies to deliver great customer experiences. Choosing to ignore the latest of these technologies may quickly make your business obscure and irrelevant as you are no longer delivering what the customers want.”
Tech helps you gain a competitive edge over larger companies
On one hand, when a large firm decides to embrace technology, they have the funds and resources to implement that technology on a large scale. Small businesses rarely have that advantage. However, there is somewhere that entrepreneurs do have an opportunity.
An entrepreneur must go through significantly fewer steps to test out and adopt newer technologies. Because they are nimble and have less administrivia to contend with, they can jump on the innovation bandwagon rapidly and develop new solutions from scratch. In fact, that’s exactly why the likes of Google and Facebook tend to acquire smaller startups- to gain access to their tech and the brains behind it, before this “new kid” overthrows them.
Legacy companies also have higher coordination costs and require more time to implement new tech. For example, if large corporation wants to adopt new video conferencing software to help improve project management they may need to:
- Research the product
- Submit the request for departmental approval
- Get legal to ensure regulatory compliance
- Get a C level staffer to sign off on the initial expense
- Have the IT department review and approve the software
- Hire a trainer from the software company
- Roll the software out to a few departments for testing
- Present findings
- Obtain final funding approval
- Plan a staged rollout to the remainder of the company
In the meantime, a smaller business that is tech-forward will have implemented the new software, used it to improve their ability to communicate within project teams and with customers, and have moved on to considering the next technology innovation. If there is a formal procedure to follow, that often goes significantly faster.
Failure to keep up can lead to missed growth opportunities
Of course, entrepreneurs aren’t just working against the big guys. In many cases, small businesses must compete against one another to gain market traction and ensure growth. If you fail to hop on top of the latest technologies, you can lose business to companies that do. In fact, 20% of all startup exits can be attributed to being outcompeted.
In the article cited above, Mark Hedland spoke of the demise of his personal finance management company. His company’s competitor, Mint, simply presented users with a product that was easier to use. He mentions his company’s failure to adopt Yodlee, a financial aggregation tool as one of the primary reasons for that failure. At the same time, Mint embraced technology that enabled the automation of processes such as data entry. The story may have ended differently had Hedland’s company been willing to embrace technology more. Meanwhile, Mint has grown because they did keep up and adopt.
Entrepreneurs can use technology to streamline and save money
When launching a startup, it’s imperative to watch costs and stretch profit margins as far as possible. Fortunately, entrepreneurs can find opportunities to streamline and automate processes and save money as well. Take the restaurant industry as an example.
According to the USDA, 133 billion pounds of food is wasted each year, and that is solely waste from restaurants and stores. Not only is that an environmental and socioeconomic concern, it represents a huge loss of money for these establishments. By adopting inventory management technology, restaurants can better track what they have in stock and what they need. This prevents the kind of over-purchasing that leads to waste.
Entrepreneurs can also use technology to automate customer support through call routing systems or AI chatbots. Project management software can ensure projects finish within time limits and maximize resources. There’s also automated invoices and financial management. Even HR can benefit from technology.
Entrepreneurs must contend with tough competition, tight finances, and the need to maximize every growth opportunity. This cannot be done without staying on top of the latest technologies.