Digital technology is no longer just a driver of marginal effeciency, it has become an enabler of fundamental disruption and innovation. Banking, finance, hospitality, transport and the food industry are a few amongst many industries that have (partially or completely) been transformed by digital technologies.
The chart above shows how many years it took for different digital startups to reach a billion dollar valuation or more. For the average Fortune 500 company it takes around 20 years to reach a valuation of one billion USD or more, but startups like Xiaomi, Snapchat and AirBnB have gotten there in less than 3 years. For those of you who don't know, Xiaomi is China's most valuable startup - the company have been called "Apple of the East".
The common thread among these startups is according to World Economic Forum's report World Economic Forum White Paper Digital Transformation of Industries: In collaboration with Accenture that they have used technology as an enabler of revenue generation. The report also highlights that companies with an above average levels of digital revenue grow 1,5% faster than the industry mean.
In January this year, the research firm Gartner revealed 5 unexpected consequences of the Internet of Things (IoT). One of those was this prediction: by 2020 over 50% of new business processes and systems will have some element of IoT. Gartner argues that this fast development is enabled by the decreasing cost of different sensor technologies.
The fact that 52% of Fortune 500 companies have disappeared since the year 2000 indicate that impactful forces such as changing consumer behaviors and the digitisation have created a more volatile economy. Nonetheless, we might still be in the early days of the digital revolution if we look at the predicted potential of big data, wearable technology, IoT and AI.
From the insights mentioned above we can conclude that the importance of having a digital strategy will continue to grow in the future. Moreover it's becoming increasingly important for organisations to rethink their business models. Below are two useful strategy tools that could help you to challenge your business model, repurpose and reposition your brand, and rethink your value proposition:
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