When Airbnb threatens to become the largest hotelier within just a few years, and you own a large hotel chain – what do you do?
When an innovator like Tesla begins to turn the auto industry upside down, and you have hundreds of billions invested in traditional manufacturing plants – what do you do?
When Uber transforms a centuries-old business model, and you own an old-school taxi company – what do you do? Today, we’re seeing a new kind of organization that is growing faster than ‘traditional’ companies ever did. They work faster and cheaper, thanks to exponentially growing technologies. But this change also leads to tension. How will more traditional organizations, with their heavy investments in the past, survive?
I started my company, RES Software, because of my own passion for innovation. I had a vision about how corporate IT could and should improve. And that vision has filled a real demand in the marketplace as RES has since grown into an international enterprise. But I’ve never forgotten that RES began with this goal: to develop groundbreaking technologies and to boldly go where no IT has gone before… But why?
For A Better World
Startups like Airbnb, Uber and Tesla are today’s leaders in innovation, and they are growing exponentially. Where it once took companies ten years to reach one billion Euros in revenues, startups can now reach this goal within a year. How do they do it? In their book Exponential Organizations, Salim Ismail, Mike Malone and Yuri van Geest interview the CEOs of some of the fastest growing companies in the world. They explore what makes these “exponential organizations” perform at least ten times better than average. They produce 10x faster, they deliver products that are 10x better, and they realize 10x more profit per employee than the average organization in their industries.
These companies are driven by a clear ‘why’: a higher goal to change something in the world. For Airbnb and Uber, the goal is to make better use of the available capacity of rooms or cars for increased efficiency. Likewise, the fast-growing platform for inventors, Quirky, has the higher goal of making inventions accessible to all. Goals like these ensure that people inside and outside your organization will become excited about what you do. A positive contribution to the world motivates people much more than simply aiming for higher profits.
To Tap the Power Of The Crowd
How do we discover new, innovative ways of solving problems? All too often some of the most brilliant innovations may exist without our knowledge. But exponential companies use the ‘community’ and the ‘crowd’ in the right way. This is why they’re building committed and enthusiastic communities around themselves, developing new functionalities and apps for them, and marketing and even financing these communities. And they’re reaping a huge advantage in knowledge in return – an advantage they could never achieve in a traditional way.
This form of crowd sourcing will become more and more common. The company of the future will no longer be about investments and assets, but about having a vision that people can endorse. It will become increasingly important to activate the masses and to innovate for a higher purpose. The power of communities enables virtually everyone to build the world’s most successful business from a garret.
To Come Together
Airbnb does not own any rooms. Uber taps into a people-carrying capacity that was already driving the streets. WhatsApp enables cross-platform messaging using existing smartphones. These companies use the resources of their customers and partners as platforms for their own products. This lowers their risk, reduces their capital requirements, and empowers them to grow very quickly. The rise of the cloud ensures they require less initial investment so they can spend their resources entirely on research & development. It is almost impossible for large, traditional organizations to compete against them – unless they actively seek cooperation with others. This is why RES is working together with other specialists – companies with proven solutions that complement our own portfolio. We also open up our APIs enabling the community to build on them and add new functionality.
To Be Hopeful
This new, flexible industry brings hope for the future – hope for a better world for everyone. Traditional companies are about making money. There is nothing wrong with that – money is the oxygen for businesses. But with new business models that reach out to and embrace the masses, it suddenly becomes possible for enterprises to build towards a better world, not just make money. Google wants to create internet access anywhere in the world with cheap WiFi balloons.
SolarCity brings solar energy within the reach of every homeowner, arranging everything for them from grant application to installation. The more we harness the power of the masses, the more world-changing technologies will come within the grasp of the whole planet. The more people have access to inexpensive technologies. The more people will get access to information that can improve their lives and save the world. And even though it takes courage to rally your organization behind a transformative purpose, it will eventually become easier – and even inevitable, if you want to survive in a world where it is harder and harder to keep up with innovation.
The growth I’ve experienced at RES has been a great journey. But it’s also led me to face something equally real. The more we’ve grown, the less time I’ve spent pursuing my reason for starting RES to begin with: to develop groundbreaking technologies. Today, we’re on the eve of a new phase at RES. And we’re doubling down on innovation. I am returning – and moving forward – to a role solely focused on innovation. Tapping into the same spirit of innovation that launched this company, RES is going to reinvent itself again and again.
As Microsoft CEO Satya Nadella said, “Our industry does not respect tradition – it only respects innovation.” He was right. And that’s why simply maintaining existing products and services won’t be enough. There’s too much at stake. Change is happening too quickly. Innovate like a startup, deliver like an enterprise. It’s no longer the big beating the small – it is the fast beating the slow.
The real fun starts now.