The unknown and uninvited competitor at your door
This competitor is not burdened by size. It may have no shareholder mouths to feed. And can react quickly to change. Technology accessibility has made it easier to turn a good idea into good business. And this competitor has done exactly that.
In 2015, Seattle-based Convoy, developed an on-demand technology platform that enables trucking companies and shippers to connect via an app instead of relying on a broker to make the match. The goal: to make truckloads more efficient. This is saving truckers time, money, and has cut CO2 output in the process. Today they are worth $2.7bn.
In 2000 there were 3.5 million small businesses, today there are more than 6 million. That is a lot of new ideas, presenting considerable choice, and a great deal of potential competition.
Today, you are competing against low-cost, multi-service, digital native providers. And being digital makes them accessible from anywhere, on any device, at any time, and to anyone. Data is at their fingertips. But this isn’t the only challenge they pose.
These disruptors are creating a reputation for offering a better customer experience and greater convenience at a lower price.
They can do this because of their comparatively small size and connected systems and data - they are able to create and provide a greater range of services and capabilities fast, and in a variety of different ways.
For example, FinTech’s enable customers to access accounts through mobile phones.
Make payments with wearables. Increase mortgage repayments using a phone. Reduce overdrafts via chatbots. Apply for credit. Move money to investment funds. Funds designed by an AI (artificial intelligence) engine based on savings goals and risk appetite profile. And much more besides.
The type of digitally enabled and data literate competitor isn’t the future. It’s today’s reality.
In 2018 there were 12,131 Fintech startups worldwide. In just two years, by 2020, the number of Fintechs rose 42% to 20,825.
In that time, Fintech revenue more than doubled.
One of the reasons for this is the lower barrier to entry.
The financial crash of 2008 damaged the reputation to such an extent that consumers have sought refuge with alternative providers. Providers who have identified and targeted parts of the value chain that offered poor experience.
They then innovated upon it with new, conveniently accessible, products and services.
But things are changing. You can compete. You can win. And here’s how.