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Learning from digital natives

Zenyk Matchyshyn
17 August 2022
capgemini-engineering

Today’s market leaders are digital-native companies. They were born digital. But what makes them so successful, and can your business compete with them?

Digital native companies are entering every industry. Many of them did not exist 20 years ago, yet today they are among the most significant engines of change in our society. They do not need digital transformation initiatives because they were born digital. Airbnb launched at a time when large hotel brands were dominating the accommodation industry. Everybody was betting against it, but through a combination of a disruptive business model and a focus on experience design, Airbnb has become a household brand and the number one choice for many travelers and holiday-goers.

When the COVID-19 pandemic hit, Moderna, a company that produced vaccines to help us combat the virus, was able to designa vaccine in just two days. Moderna describes itself first as a software company.

These businesses share common themes. They’re resilient, disruptive, and often defy the odds before achieving great success. They’re also digital-native companies, but what does that mean?

What does it mean to be a digital-native company?

All companies, old and new, have come to rely on software. Some companies that have been around for decades might have a large team of software engineers and a software portfolio that dwarfs their digital-native competitors. So, what is it about digital natives that sets them apart?

Tesla wasn’t the first automotive company to write its software. Other automakers developed software too, and at a much larger scale. But Tesla had something these other automotive companies did not – a digital native culture. Companies that are born there tend to have a different approach when it comes to problem-solving and adaptability. Being digitally native is about culture, way of working, and mindset –these elements are hard to replicate for behemoth companies that have been around for decades.

Culture isn’t just about what a company says. It’s about what it does. The “two-pizza team” approach was introduced at Amazon, which meant that every development team should be small enough to be fed with two pizzas. There were limitations in how effective teams could be as they grew, so the intent was to keep them small, agile, and productive. The most important part was that they should own what they do. They needed to be both small and self-sufficient.

This type of approach to productivity is what it means to be a digital native, and for non-digital natives, it can be quite a dramatic adjustment – but it’s not impossible.

Think about products instead of projects

Another key difference between digital natives and non-digital natives is that digital natives think about building products rather than implementing projects. You figure out what your client needs and then create a product that hopefully fills that need with some measure of success. Then you move on to the following product.

On the other hand, projects are more focused on requirements, timelines, and resources. The success of a project isn’t just based on how happy a client is with a product, but on the effectiveness of the overall journey, from planning and budgeting to management and execution. It is difficult for non-digital native companies to think about projects instead of products, but it is possible with the right culture and mindset.

Agility and Flexibility are critical

Digital natives’ success is not built on having an extensive software portfolio ready for every situation. It took Stripe less than 3 years to become a $1 billion dollar company and now they are on track to become a $100 billion company in 10 years. While doing product in highly competitive financial services market, which exist for a very long time.

Conclusion

The best way to develop and grow a digital culture and philosophy is by modeling an organization that’s already a digital native. Capgemini Engineering is ready to assist you in becoming a digital native by sharing our decades-long experience working with startups, including digital native companies.

Author

Zenyk Matchyshyn

Chief Technology Officer, Software Product Engineering