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How to Create a Digital Business: 10 Principles of Success

Starting a digital business requires technological competencies and implies the uncertainty of the target state and, as a rule, short deadlines. There are no ready-made “boxed” solutions, it is difficult to predict it, and the usual algorithm of actions is not applicable, so large companies need to take a different approach to starting and managing a new business.
be-in-the-loop - How to Create a Digital Business: 10 Principles of Success

Starting a digital business requires technological competencies and implies the uncertainty of the target state and, as a rule, short deadlines. There are no ready-made “boxed” solutions, it is difficult to predict it, and the usual algorithm of actions is not applicable, so large companies need to take a different approach to starting and managing a new business.

Ten Principles of Creating a Digital Business

Team Building

1. From the very beginning, among the top 3 team leaders, there should be at least one with experience in the field of product management, even better if there are several specialists with such skills. Their task is to formulate an exact correspondence between the product and the needs of the client, which he is called to satisfy. Such leaders must be able to formulate a common vision for product development, launch and promotion, monitoring product metrics and monetization.

2. The team should have an experience-designer – a specialist in customer experience design. This is not a graphic designer or interface designer. His task is to build the optimal customer experience that the user of the product receives. Building customer experience requires iteration, when all hypotheses are regularly and promptly tested “on live customers” — firstly, from the point of view of the product concept, and subsequently — the demand for its specific functionality.

be-in-the-loop - How to Create a Digital Business: 10 Principles of Success

3. From the first day of the project, the team should have at least five to ten high-level technical experts. Although the developers market is overheated and it will be necessary to pay so much for an experienced and talented specialist, you should not save on this asset. An “Expensive” qualified developer is much more productive than average, and the project will not be successful without good engineers.

4. Team leaders must be co-owners of the new business. This will ensure their involvement and interest in increasing the value of the business, rather than meeting planned targets. The motivation, at least for team leaders, should be long-term. For example, they may participate in option programs.

Product Development

5. Do not ask the client what he needs. Form hypotheses about which product will be in demand and then test their consistency constantly.

6. Focus on the product and product metrics. Firstly, you should forget about the number of customers and revenue. If you start to take care of financial indicators, the team will be tempted to catch up with traffic and make beautiful graphics in the form of a hockey stick that all investors dream to see.

7. Be prepared to change the direction of the business or product paradigm, even if it is a 180 degree turn. Define objective indicators of the market reaction to the product and its changes — product metrics, build the process of their collection and stimulate discussion of the product strategy in a team taking into account the “market feedback”. The main thing is to not to delay making decisions about changing directions.

Process Management

be-in-the-loop - How to Create a Digital Business: 10 Principles of Success

8. Do not tell the team how to do something. They must find solutions by themselves. The team is responsible for achieving the business result agreed with them, and not for performing a specific set of actions leading to its achievement. Instead of fixing the work plan with a list of tasks and terms for their implementation, establish a clear rhythm of monthly or quarterly discussion of what has been achieved (what has been done) and plans for the next period (what is planned).

9. Provide the team with the necessary authority, ensure their autonomy and remove internal bureaucratic barriers. If this approach to management is contrary to the culture of the main business, you need to develop digital business in a separate perimeter. Imagine you are a venture fund that invests in startups. Create an investment committee with relevant experts, possibly external, and entrust it with making strategic decisions.

10. Refuse to the traditional budget and move on to financing rounds. From round to round, the team must prove its worth and ability to make the product demanded by the client, as well as demonstrate financial returns. If you reached your goals in the previous round then get money for the next one. If you did not achieve them then, perhaps, you should change the team strategy or make important staffing decisions.

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