Today, 8 November, at Analysis Disruption, the largest Baltic and Nordic IT and business analysis conference, COO of Fortumo Andrei Dementjev posed an important question: why does a company have to go through pain to think innovatively? According to Dementjev, success often drives companies into a comfort zone and they lose sight of future prospects as ambitions cool down.
“Once a company is doing well and their product is successful, there seems to be no need for innovation because the product is working,” says Dementjev, pointing out the banking sector as a genuine example of this kind of mindset.
Smart phones dominate people’s lives, but banks were unable to catch the moment and turn the rapidly developing digital economy to their own advantage. That’s how large banks gave way to the rapidly developing fintech services that displaced the banks’ own outdated products.
This is a syndrome that goes far beyond the banking sector, says Dementjev. “Have a look at large players like Google – yes, their product portfolio is immense, but advertising still accounts for 90% of their total sales,” he adds, explaining that such a share of advertising in sales is disproportionate and makes the company dependent on a single source of income.
Fortumo has gone through four or five business renewals during its history, both in terms of customers and products. In his presentation, Dementjev speaks about Fortumo’s experience and the principles of redefining its growth strategy.
Dementjev points out six important principles underlying Fortumo’s innovation policy:
- Finding the time for innovation in addition to the core business. Here process automation is vital for making this happen. This will not only leave more time, but improve the motivation of staff, as it reduces the share of routine work.
- Innovation and new lines of business must be part of corporate strategy.
- Designers of new lines of business must be given the freedom to create and validate new prototypes.
- Innovation rarely begins from the desires or visions of a customer – the competitive advantage of a service or product provider is defined by its ability to offer novel solutions to its business partners. Questions should be put to customers and answers should be sought at a level beyond teams, as each team has its own viewpoint.
- Don’t create a product only for it to collect dust on the shelf. First you have to sell the idea; the willingness of customers to buy and use a product is more important than your technical readiness to deliver the solution. Obtain a signature on a contract and only then develop the product or solution you offered to the customer.
- A product should not be targeted to a single customer’s needs. Your goal should be offering the product to many users. The more interested customers you have to test the product, the better the end result in terms of its technical solution and cost-effectiveness.
According to Dementjev, it is important to also ask the right questions of yourself when designing new lines of business. “What is the core value we offer our customers through our product? In what other areas can we apply this solution and do we have the competence to do that?” Dementjev gives examples of the basic questions that should guide development activities.
According to Dementjev, you should not be discouraged if someone already offers a solution to an issue. “Even if a customer already uses another product, we can always think of ways to offer a better solution.”
The Estonian mobile payments company Fortumo has Google, Facebook, Spotify, Sony, Alibaba and Electronic Arts among its customers. Fortumo employs 70 people in Tallinn, Tartu, San Francisco, Beijing, Delhi, Singapore and Hanoi.
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Analysis Disruption is a conference born of the initiative of analysts at the Nortal software and business consultations company as a platform for analysts to share their knowledge and experience. The event began in the form of morning seminars in 2014 and was extended to a conference in 2016. The conference is organized by Nortal in cooperation with Brand Manual, Fortumo, PwC and Testlio. |