There are articles that you read to pass the time, articles that educate and articles that actually radically transform your outlook. The latter don't come along very often, in fact for someone as old and set in his ways as I am they are as rare as hen's teeth but I came across one such article last week. And it wasn't so much an article as a phrase. One of those phrases that you feel will turn out to be hugely significant in the not too distant future. That phrase was 'full stack start-up'.
I am not going to pretend the phrase is new (it may be that you are all reading this wondering how it has taken me so long to discover it) but I think that it has a particular resonance right now because it describes something that fundamentally changes the relationship between business and technology. Up until this point the relationship between business and technology has been a fairly simple one. First someone has an idea for a service or a product, which evolves into a business and then technology is developed/ bought in to support that business. What we are starting to see now however (and what the phrase 'full stack start-up' describes) are businesses that start with technology and then layer the business on top.
You could argue that this isn't new. Arguably businesses like Google and Facebook did the same thing in that they are essentially technology companies at their heart but ones who are delivering a service direct to consumers. The difference is that what Google delivers (to both consumers and business) is a service that is in itself essentially digital. They are digital services delivered on digital platforms. What is different about the 'full stack start-up' is that they are now transforming more traditional services and that is why we all need to sit up and take notice.
Let's take for example three of the best known digital start-ups – Netflix, Buzzfeed and Uber. Netflix is probably the most disruptive and potentially threatening business out there if you are a traditional media supplier. What they do is deliver a traditional service (TV and movies) via the latest tech and using the most up to date data analytics to differentiate themselves. Netflix didn't evolve from a traditional media company, it came straight out of the digital ether bypassing every other stage of the development of the media industry. This means no legacy systems, no expensive physical supply chains, and so on. And Netflix have the rest of the media industry both here and in the US running scared.
Let's look at the second of these, Buzzfeed. Buzzfeed started small and grew (worth listening to this podcast if you want to hear more about why they are successful) but again they have been part of this quiet revolution of what are essentially tech start-ups who are now offering consumer services. As Buzzfeed board member Chris Dixon says: "The most interesting tech companies aren't trying to sell software to other companies. They are trying to reshape industries from top to bottom."
You only had to be out on the streets of London in June to understand the impact that Uber has had on the taxi cab industry.
So why is this relevant to you as a CIO? Well firstly it demonstrates the power of technology not just to drive business change but to actually create new businesses. The same principles that apply to the way in which Uber, Buzzfeed and Netflix were built can apply to the way in which your business creates and launches new services, both internal and external. In order to do this however - and to get real competitive advantage from it - you need to be doing something that is both different and transformative. That requires getting out there and looking at what is possible, what is exciting and what is different and then bringing it in-house and getting your brightest minds to see what it is possible to do with it – a Lab in effect.
I have talked about the power of labs before and it will come as no surprise to you that I am a huge advocate of them for many reasons. If you needed any more convincing however just look at the impact that these three companies have had on their industries and imagine what would happen if a product or service your company developed and delivered did the same – either as part and parcel of the existing business or as a spin-off. It is that kind of thinking that I believe marks out the CIOs that will be the board room of heroes of tomorrow.