The pace of change and competition in today’s business environment is arguably faster than ever before. This situation has occurred, thanks in large part to the adoption of technology across virtually every aspect of business and culture — especially in light of the pandemic. Here is how your organization can get proactive about market erosion.
Be more flexible, adaptable and remote-friendly.
Businesses increasingly realize they need to be more flexible, remote-friendly, and adaptable. In many cases, technology is powering those changes.
The Problem with so Much Demand
In the short term, the influx of demand for technology is good. But over time, it brings more competition into markets.
As a result of technologies evolving rapidly and ideas spread more quickly than they once did — businesses using the same new technologies to deliver more modern services see increased competition in a short amount of time.
Prices then decrease, and the commodification of more and more products and services occurs.
Add to this the increasingly fickle nature of consumer demand and the ever-present possibility of another disruptive technology changing the entire landscape as we know it, and you have an environment perfectly set up for market erosion.
Is There a Solution?
How can companies prevent this? When even successful services quickly become commoditized or replaced, is it still possible to forecast future trends rapidly enough to avoid market erosion?
The Three Horizons Model
One of the most effective ways to combat erosion and stay on top of future trends involves changing how you approach growth. The three horizons model is designed to help businesses do just that.
In its most basic form, the “three horizons model” is a strategy designed to help you manage and better understand growth by breaking it up into three distinct categories (called horizons).
1. Core business.
2. Emerging opportunities.
3. Cutting-edge business.
The horizons model enables businesses to maintain their current profitable services and best determine what customers will want next. It shows companies how to focus not only on their present successes but also on adapting to maintain market position.
How the Horizons Create Staying Power
Based on my digital marketing and advertising experience, different services come and go — and have been forced to adapt to those changes. Flash banner ads, campaign microsites, and Facebook apps are just a few of the technologies that seemed to be the next big thing one minute and then quickly faded away the next minute.
It’s telling that not every company that trafficked in these services is still around. In today’s world, businesses that keep track of supply and demand data while watching for the changes to forecast future trends will be the ones that stick around for the long haul.
Maximizing the Three Horizons Model
The three horizons model can help you develop the habits you need to confidently bet on growth and be ready to handle anything thrown your way. Here are four practical ways to maximize results with this growth management plan:
1. Take full advantage of your CRM.
This is one of your best weapons in the fight against market erosion, and it’s one that you’re likely not using to its fullest extent. Use your CRM to define funnel stages and probabilities that make sense for your business. Enter every deal into your CRM in the appropriate stage, being as clear as possible about what’s required for a deal to move from one stage to the next. This will give you the full, clear picture you need to keep everything moving forward.
2. Price and plan deals in your CRM, starting now.
Too many organizations don’t take the time to price and plan early deals because of the work involved. Making the effort up front means you can understand resource demand. Resource demand, in turn, lets you better predict potential project margins and points at which revenue might be recognized.
Understanding resource demand and projecting potential will give you insight into the evolution of your business that’s much more valuable than a simple revenue percentage. You’ll also get a better idea of your differentiated value proposition.
3. Treat the first and second horizon differently.
The three horizons model is designed to help you tackle separate revenue areas concurrently, but that doesn’t mean you should approach each horizon in the same way. This is especially true when it comes to how you handle your bread and butter (horizon one) and your emerging innovations (horizon two).
The first is all about extending the life of your foundational services and making them as profitable as possible; the second is about identifying the work that’s growing and how it’s influencing business.
4. Pay attention to culture.
To successfully forecast future trends and keep each horizon strong, you can’t just focus on your business. You have to pay attention to changes and trends in the world at large. What forces are at play in the broader culture? How might these forces change the demand for your services?
What new demands might be on the horizon? Ask yourself these questions regularly to prevent erosion. In the words of Ferris Bueller, a kid wise beyond his years: “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.”
What is the Strategy?
The three horizons model is neither an innovation strategy nor some sort of miracle plan that will insulate you from market changes. It’s simply a model designed to help you manage growth and prevent market erosion — and a model that works.
Ultimately, it’s up to you to put in the work to ensure each product area is where it needs to be. Pay attention to supply and demand data, cultivating each horizon in the unique way it requires. That effort will be rewarded with sustained growth and a real chance at staying on the cutting edge for years to come.
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Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!