The digital ecosystem assessment: How investors, corporates and entrepreneurs need to change their view on existing frameworks
March 2018, by Simon Fischer
It is common belief that the right timing is of the essence when bringing an idea to market and that it is one of the most crucial factors for a start-up’s success. Well-known entrepreneurs and investors, such as Bill Gross in his famous TEDTalk provide the evidence that timing contributes to success even more than funding, the business model or the right team to execute the start-up’s idea. According to Gross, the “timing” accounts in his analysis for 42% of the difference between success and failure of a start-up and hence is the main differentiating factor.
In today’s digital era where we are witnessing a highly increased speed of technological adoption and development, this analysis and conclusion appears even more accurate and overwhelmingly clear.
Since corporates have also entered the innovation race to combat up-and-coming digital players, the challenge to truly understand the market and its readiness for a new product/technology is omnipresent.
Yet the majority of analysts in organizations have failed to create better forecast models to accurately time their moment of market entry. Even those who work tirelessly on testing their ideas and products with potential customers and “early adopters” often fail to find the right moment. Prominent examples in recent months were Quixey (133m$ funding; too early in the market for digital assistants), Pearl (too late, even though their product was superior) or German fintech Fintura (too early, customer acceptance still too low).
So why is this happening? One thing that most companies commonly fail in at is adjusting their frameworks for adoption of technology to the digital environment. While the majority still thinks in technology adoption models hailing from the late 50s and 60s, these diffusion theories and adoption lifecycle frameworks fail to reflect the impact of today’s digitization.
So, market analysts urgently need to rethink their strategies and frameworks, in particular with regard to two major shortcomings: