The Challenges Facing Born-Digital Companies

Digital framework

Business has drastically changed in the last half-century. The traditional definition of the word as a brick-and-mortar establishment is all but gone, replaced by tech moguls and giant mega-corporations that are born, live, and die online. These are the born digital companies—a new player that faces old problems.

While they have newer tools and more flexibility when it comes to their operations, born-digital companies are still susceptible to the usual problems that have plagued their older counterparts. In some areas, they may be even more vulnerable than what you’d usually expect.

Here are some potential areas of concern that digital companies should keep in mind:

Intangibility

As their business structure more or less exists solely online, it’s often difficult for born-digital companies to have a sure accounting for their profit margins—or even their product. Unlike traditional companies that can concretely account for their products and profits via real-time sales and actual product handling, digital companies suffer from intangibility: the difficulty in putting a face behind the concept of their goods or services.

This can be a problem when it comes to dealing with a market segment that prefers handling real products. It’s not easy trying to explain the merits of software to someone who is used to handling analog items, and burden of proof will often fall on the company to have something to show for their efforts.

Succession Planning

At the same time, the succession planning of born-digital companies can be surprisingly difficult. As their structure doesn’t exactly operate from a single space, accountability for duties and tasks can often run into resource management issues if roles are not properly defined. In brick-and-mortar spaces, you know who the manager is. It’s much more difficult pointing out a system or server admin that can immediately respond to a crisis.

This is why backups like consulting services for business continuity management is critical for the survival of a digital company. Since their corporate hierarchy can often stretch across the entire globe, it’s essential that a plan is placed (and can be executed without any hiccup) in case of a crisis.

Market Trends

Digital Market Trends

One of the biggest challenges facing born digital companies may be the very market trends that made their existence possible. Digital ways to transact business have made dealing with analog goods and services easier, but it was never really meant as a substitute. The danger here for digital companies is having their “digitalness” run away from them, and fail to provide their customers with tangible, workable results.

It’s critical to keep in mind that digital companies are using new tools to expand an old space of interaction between business and consumer. While there are areas where this kind of interaction can certainly be moved into a digital space, completely digitizing the entire process of business may still be something that our society is not yet ready for.

For any born-digital company, avoiding these pitfalls is key to staying alive. Because while we’ve certainly made things easier by moving the business online, we’re still very much an offline customer base that’s using these products.

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