Born Digital companies are considered to be agile and always on the cutting edge of technology which are the key ingredients needed to tide over any challenging situation. This would imply that such companies would have performed well during the pandemic. But it is important to find out the challenges they may face as things get back to normal and how they can continue to have an advantage over their traditional competitors.
Impact of the pandemic on born-digital companies
The general perception about born-digital companies is that they have flexible work hours, a healthy work-life balance, and employees are mostly working from home. Madhu Gopinathan, Senior Vice President, Data Science, MakeMyTrip shared how the pandemic has impacted his organization. “The pandemic has created havoc in the travel industry. And it has been the biggest challenge for us. But as a born-digital company, we already had a business model and technology in place. We were already attuned to working remotely. Our biggest challenge was how to navigate the business environment when travel came to a standstill. But our leadership team managed that very quickly and with some changes without sacrificing on core agenda, we were able to capitalize when travel picked up again. And despite all the challenges, we managed to make a profit.”
Autotech has boomed after the pandemic. Talking about the same, Naresh Mehta, Vice-president, Data Science and Machine Learning, CARS24 said “As a brick and mortar company that deals with pre-owned automobiles, we have observed that the need for pre-owned cars shot up because, given the risk of the pandemic, people could no longer use public transports. That’s why we saw our buyer traffic tripling after the lockdown. The things which we had planned to achieve in the next 2-3 years, we had to accelerate all of that. We tried to create a 100% online answer. Our idea was to use the pandemic to double down on that. As far as business is concerned, things have only gone up during the pandemic.”
Within a year, because of the pandemic, many born-digital companies became household names. The brand-building which otherwise would have taken three years, is now achieved in one year. Ranjan Sakalley, Head of engineering and tech, Vedantu said, “I come from an ed-tech space. The spirit of ed-tech is to be able to provide education online to remote as well as cosmopolitan cities. To that effect, Vedantu has been able to serve very well. We have been able to solve students’ problems and because of that, and we observed tremendous growth in the last few years. The students have been affected the most during this time because they can see their elders getting affected, exams getting cancelled, and their inability to communicate with their teachers. But we are glad that we can help them in this tough situation.”
How born-digital companies can manage the risks because of immature governance processes?
While born-digital companies excel at agility, speed, customer access and automation, many of them face problems in scaling up their operations while managing the risks because of immature governance processes. Viswanath, Co-founder, CTO, Upstox added, “If you are in financial services specifically then you have to look at governance and compliance very seriously. There is a regulatory body that you have to work with. The regulatory body and the actual B2C company are the two parties that make everything safe and secure for consumers. Our job is to ensure that the norms and standards set up by the regulatory body, can pass that on to the end consumer to make sure that everything is safe and secure. Many times compliance and user views may not go hand in hand. And if you are not thinking about compliance as a very key pillar then you are probably not thinking about that when you are building your application.”
According to Shrini Viswanath, while building the organization, it is important to have a compliance team separate from the rest of the team so that you don’t put the fox in the hen house. “Involve them while making product decisions so that they are well aware of the kind of decisions you are going to make and they can advise you on how you should be able to do that and achieve your business goals while keeping compliance in mind,” he said.
Shantanu Preetam, CTO, PayU added that “Anywhere we deal with data that is sensitive or can be misused, compliance or audit is not a matter of choice but a matter of practice and principle. Even before the pandemic started, we have seen tremendous growth in the digital economy. The advancements done in the digital economy are mind-blowing. Now, to keep all this infrastructure and growth running seamlessly, there is an implicit trust in the system by the customers on the payment systems.
Can technology become a foe for born-digital companies?
Technology is a friend but for born-digital companies, it can become a foe as well. Many first-wave born-digital companies are praising the pace of innovation that is rendering their technological underpinning obsolete already. This may make it difficult for them to keep their grounds running. Madhu Gopinathan thinks “It has become a habit that we continue to innovate, and all the innovation, customer-facing or what we are doing internally are subject to disruption and it is better that you disrupt yourself than waiting for someone to do it. From that angle, making it a habit and being part of the process- that mindset is helpful. If you don’t innovate then someone else will. You constantly have to upgrade yourself. It is in fact a pleasant journey where you constantly learn and improve.”
To that Naresh Mehta adds- “You have to keep iterating, you have to keep on pivoting. Rather than falling in love with a solution, you need to fall in love with the problem and as the context changes, the ideal solution will also change. You need to react to the changing ecosystem.”
Ranjan Sakalley said, “I think the security aspect is also crucial. In the last 3-4 years, there has been a flurry of a lot of hacks and data leaks. In our case, being secure, being able to predict abuse and being able to prevent abuse is extremely important. As product organizations, we need to build products that are easier to use and also make sure that our users are protected from abnormalities.”
What should be the new wave of innovation for born-digital companies to keep growing?
In the upcoming days, born-digital companies will continue to pivot and innovate. “When it comes to Autotech, we are not far from the day when people will buy used cars online like you buy shoes online. It is going to happen and we are going to be a part of that future. People are no longer using online channels for discovery and research, they want 100% online transactions, documentation and finance happening online.” said Naresh Mehta.
Madhu Gopinathan added “The pandemic has created new habits. There is a shift from offline to online. Every transaction we do is getting captured. So we have to think about how we can utilise that to improve our products and customer experience. Data and machine learning can play a significant role in improving and revamping their operational processes.”
