Encora believes that companies adopting modern and emerging technologies have more in common with each other than with their competitive peers within their traditional industries. These companies operate in FinTech, HealthTech, EdTech, HiTech, Cybersecurity, LendTech, and dozens of other micro-verticals.
While they do not often compete directly with one another, they embrace the same challenges, and they seek market leadership through rapid-cycle product development. They are innovators, they are leading-edge technology companies. We call them Fast Growing Tech (FGT) companies.
A Global Crisis Catalyst
It’s easy to understand why FGTs are gaining prominence. The world is undergoing a period of unprecedented change, catalyzed by a global pandemic with far-reaching implications for consumers and businesses alike. Patterns of consumption have been disrupted, and as a consequence, businesses must scramble to adapt their operating models (and in some cases, revenue models) to survive. The sudden shifts in demand heighten the need for companies to innovate.
Innovation is a natural part of any company. For some, it is an ongoing process, enabling a perpetual state of reinvention. For others, it is a rigorously governed process that focuses scarce resources on initiatives with the highest risk-adjusted returns.
While the nature of innovation varies widely across companies, the COVID-19 pandemic has accelerated the pace of innovation across all industries, and the need for quickly forging ahead has never been higher than it is now. According to a recent McKinsey study, companies have accelerated the digitization of their customer and supply-chain interactions, as well as internal operations by three to four years. The share of digital or digitally-enabled products has accelerated by a shocking seven (7!) years.
Despite the urgent need for such acceleration, conventional development approaches have been further disrupted by social distancing, and the need for the global economy to support everything “from anywhere”.
Preexisting Technology Readiness
Even before the pandemic made it clear to business leaders across industries that the “status quo” could not persist, all of the necessary preconditions were in place for a broadscale avalanche of technology innovation. New and emerging technologies, many developed over the last decade, have made it possible for companies to reinvent the core building blocks of the largest industries in the global economy.
The Cloud as a Service
Two decades ago, pioneers like Oracle and Amazon introduced the world to a vision of “the cloud” that would break the chains of processing power in local hardware. Thin-client applications were a pre-cursor to myriad waves of “as a service” business models. Amazon’s introduction of AWS introduced the world to its marketplace model for e-commerce.
Artificial Intelligence and Machine Learning
More recently, Artificial Intelligence and Machine Learning (AI / ML) have evolved from being academic thought experiments to critical sources of commercial value. The proliferation of tools, platforms and even programming languages that support AI / ML have made these technologies much more accessible and pervasive.
In addition to supporting personalization engines and decision science, these technologies are also being applied to edge computing micro-services, creating efficiency within and across platforms in complex technology ecosystems.
Blockchain
Blockchain is yet another example of new technology that has the potential to fundamentally reinvent core building-block functionalities underlying major swaths of the economy. Many people associate blockchain with cryptocurrencies like Bitcoin or Ethereum, and therefore expect that blockchain’s contributions will be concentrated in the Financial Services industry.
While this is reasonable, and may yet prove to be true, what this perspective overlooks is that Blockchain is actually a distributed ledger platform. Its capacity for inventory management, asset tracking, auditing, and information security all potentially eclipse the (perhaps sexier, but regulatorily fraught) cryptocurrency use cases.
The Internet of Things
Consumers are rapidly adopting a broad proliferation of “smart” devices—including appliances, alarms, cameras, lights, microphones, etc.—all of which can be controlled by remote devices. Over the last 5-10 years, the core capabilities underlying the Internet of Things (IoT) have matured, including networking and action through platforms, embedded systems, partner systems, and middleware. Consequently, mass adoption of IoT is now underway.
Looking forward, as the connectivity and associated data arising from IoT technologies continue to expand, new applications will emerge based on real-time analytics and personalization.
These new and emerging technologies illustrate the opportunity for companies to reinvent their industries. The companies that embrace and invest in innovation built on new and emerging technologies have the best chance to establish themselves as the leaders in their respective industries in the economy of tomorrow.
The Economy of Tomorrow
One of the hallmarks of FGTs is that they challenge the order of the world as it has existed to date. The companies that invest in these technologies are not only more likely to grow quickly, as adoption of these newer technologies eclipses older, less flexible technologies. In addition, these companies are more likely to redefine the industries of the future.
Uber and Airbnb introduced the world to the “gig” economy and challenged the hegemony of the established incumbents. Not only have they both grown exponentially, but they have forever changed the competitive landscape and re-drawn the lines of their respective industries. Lines between traditionally established industries are blurred, and in some cases, new industries are invented.
Another unique characteristic of these technologies is that, unlike monolithic legacy platforms, if FGTs are expertly architected, they support rapid iteration and extension. When you are continually innovating, you can be nimbler, faster, and more responsive to market needs, which will fuel growth. But it also means you need to rethink how you design the technology. Your engineering team needs to keep up with the rapid pace and be agile and responsive to iteration. Speed of innovation is an increasingly important competitive advantage.
Key Takeaways
- Fast Growing Tech (FGT) companies operate in multiple microverticals such as FinTech, HealthTech, EdTech, HiTech, Cybersecurity, and LendTech. Their adoption of leading-edge technology and rapid-cycle product development position them as market leaders
- As the COVID-19 pandemic has accelerated innovation such as the digitization of operations, across all industries, FGT companies have gained prominence
- Some of the emerging technologies developed over the last decade that have made it possible for companies to reinvent the building blocks of the largest industries include the cloud as a service, artificial intelligence & machine learning, blockchain, and IoT
- The economy of tomorrow will be enabled by FGTs. Companies that wish to compete and win in the future must be thinking and acting now to ensure they are making use of the most relevant technologies that can withstand the growing demands for change, speed, and innovation
Fast Growing Tech – Encora’s Perspective
Encora specializes in accelerating innovation for Fast Growing Tech companies. With over 4,800 engineers in innovation labs spanning the United States, Central & South America, India, and Asia Pacific, Encora works with leading-edge technology companies to ensure that they are making optimal use of new and emerging technologies. Our mission is to make innovation acceleration and speed to market a source of competitive advantage for our clients, and we achieve it through proprietary agile engineering methods, deep industry-vertical expertise, and an extraordinary global talent pool.
We believe that Fast-Growing Tech companies have the power to transform not only their industry but also the economy more broadly. We work with companies that are already market leaders, as well as those who wish to accelerate their path to market leadership.
If you are interested in becoming a Fast Growing Tech company, we would welcome the opportunity to partner with you to speed your innovation cycles and accelerate your growth. Let’s talk.
