Most startups dream of reaching enterprise status. It’s the “American Dream” to start your own business and, for some, to expand that business or even to build an empire. So why should an enterprise brand have any reason to think like a startup? Isn’t that a backward move? Nope, not necessarily. Being a stalwart isn’t always the coveted position. Some enterprise brands are seeing these new startups eat their lunch. So how are these small fish becoming real challengers to the whales? And what can enterprise businesses do to keep their market share?
First, let’s acknowledge how dramatically the playing field has changed in the last decade. The technology of today has created a new consumer mentality – one that allows for more choices than ever before. Consumers are no longer limited by geography or options. We live in a global culture with instant access to everything going on everywhere. ‘Multichannel and multi-choice’ is the new reality. This emerging digital landscape has also made it easier for new businesses to get off the ground with less. Outsourced teams, co-working spaces, digital tools, and social media allow for less overhead, real-time feedback from consumers, and less baggage.
In addition, startups are more open to taking risks or doing things differently. They aren’t established and can pivot more easily. There’s an excitement to new products and services and the brands themselves are created to be more relatable to today’s consumer. So how do enterprise organizations create this same relevance to new audiences and maintain their current customers? Take some notes from the ready challengers that are coming for them. Steal the playbook, enterprise folks, and build your audience!
Being nimble might be more important now than ever.
Create a culture of innovation
Startups are often created to challenge the status quo. Successful ones are able to identify a pain point that isn’t being solved and create a solution. Often in a way that is either more convenient, cheaper, or simply better. They come from a place of innovation. Oftentimes, solving a problem that has been ignored or gone unrecognized by the established companies. Uber changed how we get around by recognizing the pain points of the taxi and commercial car services. Now, you can hail a car without being on the street, and know the cost of the trip and then conveniently pay through the app. The taxi industry didn’t know what hit them. Zillow, Redfin, and other upstarts have made it easy to search for homes from the comfort of your couch and reduce buying/selling fees, making traditional real estate brokerages look slow and expensive. Farm Girl Flowers, Urban Stems, and Bouqs created a more sophisticated and modern approach to floral gifting, making 800flowers (a company that has barely hit middle age at 39 years) look antiquated and out of touch. (Sadly, the name hasn’t aged well either.)
But some enterprise companies stay ahead of the curve by keeping an eye on the future and take action proactively. In 2010, Microsoft was losing on Bing and being outdone by Apple in phones and tablets. They were playing catchup and falling behind. But even with these failings, they were still invested in innovation. This is why they pivoted into cloud computing at a time that was vital to their ongoing success. By setting up a skunkworks division to explore this new technology, they were able to essentially create a mini-startup inside the larger organization. As a result, Microsoft became a major player in a leading technology. Rewarding them with their highest stock price in the company history on April 21, 2021.
Empower the entire organization
Enterprise companies have lots of layers, lots of processes, and change can take a long time. What I often see with enterprise-level businesses is the agents that are put in charge of change – usually middle managers – don’t have the authority to make decisions and live in fear of moving in the wrong direction. So they stay fixed, making only safe and minor adjustments. Sometimes, big steps are needed and that has to be set at the top and supported throughout the organization. A good example of this is how Zappos approached their customer service. Customer service agents were not held to scripts and were empowered to use their judgment to help solve customer issues. As a result, they quickly created a risk-free environment, not just for their employees but also for their customers. There can be hesitation in buying shoes online without being able to try them on first. But with expedited shipping, easy returns, and no-hassle customer service, it becomes an easy shopping experience and the concern of buying without trying on becomes a minor concern.
Embrace change
My agency recently spoke to a huge corporation that wanted to discuss rebranding. It was a brand that was the only player 15 years ago and has seen a good portion of its market share go to startups. As we were talking to them about their willingness to bring fresh thought to the brand, one said, “Oh, you’re going to hate working with us. Nobody here wants to change.” If the internal company culture isn’t willing, no branding agency can force them to a better place. Being stagnant and sticking to “business as usual” will make any business a relic quickly in this marketplace. People evolve and businesses do too. In order to make the right change from a branding perspective, go back to the essence of the brand – your unique DNA. Think about how it would look if it launched today. What would you do differently? What is it about your product or service that customers love? Evaluate if they still love you for the initial reason or if you need to change with the times. Successful heritage brands have done exactly that. They aren’t trying to become something they are not. They are leveraging the brand love they created and reinventing it for a modern audience.
One way to create renewed interest is to pair up with a new brand for mutual benefit. A great example of this is the recent collaboration between Adidas and Allbirds. Adidas is a high-performance shoe for athletes. But like most athletic shoes, they have a lousy carbon footprint. Allbirds is founded on the belief in sustainability and reduced waste, but hasn’t been able to create a performance version of their casual shoe. But by coming together, they can collaborate on bringing each of their strengths to solve the other’s shortcoming. Showing their customers that they are listening and responding to what they want.
Create a tribe
New businesses are being created by digital natives who know how to reach their customers where they are. They heavily leverage social media and digital tools to create an open channel between their customers and their brand. This creates intimacy and vulnerability, allowing the customer to feel part of the brand. A step beyond that is creating a community for your customers to form a tribe. Peloton has become a cult brand, not just because it’s an innovative, at-home exercise bike, but even more so because it created a community. By creating this community, they’ve created a super force of sales agents. Devotees rave about their love for Peloton to an almost comical degree. (I know, I’m one of them.) They leverage their community to get insight on product innovation and stay on top of customer satisfaction by having multiple channels to reach them.
There are great lessons to be learned by the up and comers. And it is possible for enterprise brands to adopt these tactics. Nike, Starbucks, Apple – the brands that all the clients we speak to have googly eyes for – embrace these startup values. It’s why they stay relevant and connected to both their existing customers and attract new ones. Innovation, a culture of empowerment, creating an open dialogue with customers, and investigating what successful evolution looks like can help any business – startup and enterprise alike.
Cover image source: Mikael Blomkvist