Distrupt - or die like a dinosaur
Business needs new thinking to grasp a digital landscape transformed in a generation. Which is why we’ve created the Disruptor 10 list, powered by The Sunday Times Fast Track, says Peter Kelly, Managing Director of Virgin Media Business.
It sounds incredible, but none of the companies that appeared on the first Fast Track 100 list of the UK’s fastest growing companies in 1997 had a website.
Jump forward 20 years and I’d wager all those on this year’s table would consider themselves digital businesses, in part if not entirely.
For instance, one of the apparently most ‘real world’ companies of our Disruptor 10 - Leeds-based Pure Gym - still owns physical assets, rents premises and directly employs more than 1,000 people. But at the core of this disruptive force in the UK’s fitness market is its technology platform. This does everything from automating membership services to security and personalised training regimes for more than 800,000 customers, all as part of a low-cost business model. Having grown from nothing to become Britain’s largest player in seven years, its disruptive impact on its sector is undeniable.
Achieving disruptive potential
There were disruptors on the first league table 20 years ago, perhaps most notably the chip designer ARM Holdings. With just £17m of sales, this small Cambridge firm was already thinking differently, rejecting the accepted wisdom that companies should make the microprocessors they designed, as giants such as IBM did.
Instead, it licensed its intellectual property to manufacturers, so it became embedded first in desktop PCs and then in smartphones and tablets around the world.
ARM’s sale in the summer to Japan’s SoftBank for £24bn shows what British disruptors can achieve.
We support them by providing the digital infrastructure they need to achieve their potential. Today a digital platform that is secure, reliable, high-quality and ultra-fast is essential for every business.
Tech is all important
We wanted to highlight the next generation of businesses, which is why, working with Fast Track, we have identified some of the most promising disruptive businesses in the UK in the Virgin Media Business Disruptor 10 list. You can see the full list below.
Of the 10, three appear on the main 2016 Fast Track 100 league table. The other seven do not meet the financial criteria to be included. But they are all making significant waves, driven by innovative thinking and investment in technology.
Many of our disruptors aren’t just adapting to the increasingly competitive climate of the digital age, but have made the opportunities it brings the core of what they do. By exploiting technology to become more efficient and save customers money, they are reaping the rewards.
Made.com’s “lean ecommerce model” is a great example of this. It has brought designer furniture to a mass market by cutting out the middle men. As co-founder Ning Li says: “We launch collections every week in low volumes to test the market, which our competitors can’t do as they don’t have the infrastructure to manage connections between designers, manufacturers and customers.”
In made.com’s case, adapting hasn’t just meant survival, but triumph.
The power of crowds
Crowdsourcing is giving disruptors an edge over incumbents. For example, the currency transfer firm that made the Virgin Media Business Disruptor 10 list, TransferWise, says it primarily relies on its network of fans on social media to help it gain traction in new markets. It now operates in 68 countries and is valued at more than £1bn.
Likewise the Scottish craft brewery BrewDog has crowdfunded more than £3m from 53,000 investors in its “Equity for Punks” campaign to help it grow, with a new brewery in Ohio due to open soon. Its co-founder James Watt says: “We don’t just see it as 53,000 investors. We have created a community that is helping us grow at home and overseas.”
Many consumers clearly love craft beer, but just as many are passionate about the environment. Ecotricity has tapped this to raise almost £40m through its “ecobond” initiative, from investors and customers who back its commitment to green energy.
Meanwhile Crowdcube, the crowdfunding platform, has helped more than 450 businesses raise capital from its 300,000 registered investors. Clearly in this age of disruption there is power in crowds.
Visionaries of tomorrow
The next generation of entrepreneurs are thinking, from day one, about why they are in business and many have a clear “vision” or “purpose” beyond simply a healthy bottom line, and at Virgin Media Business, our purpose is to help all businesses fulfil their digital potential.
Consider bitcoin wallet company, Blockchain, for example. Its co-founder, Peter Smith, says his vision is to “make it as easy as possible for people to do business with each other, which means making it easier to transfer value. I want to make it as easy to do that as it is to communicate.”
The team at Alphasights are just as focused. They connect the experience-based knowledge held in people’s heads with senior corporate decision-makers, thus challenging the established consultancies to rethink how they access expert information.
This sense of purpose is rooted in reality, as Ian Thomas, co-founder at online property finance provider LendInvest notes: “The mortgage market is ready for disruption, but it is so big you must start in a niche. If we’d gone straight for the end goal then we wouldn’t have had enough money to compete.”
A £92bn opportunity
Instead, LendInvest has secured “about 10 per cent” of the short-term mortgage lending market, which it estimates is worth £5bn a year.
In business, keeping it simple is far from stupid. The prize if we can create more digital world beaters like the Virgin Media Business Disruptor 10 is enormous.
Work we conducted with Oxford Economics estimates it could be worth an extra £92bn a year to Britain’s economy.
Even today, some companies might view IT as a discretionary expenditure, a cost that can be turned on and off when trading allows, but we see it as fuel. You can’t run a business without people, but you also can’t run a digital business without resilient IT.
Our Virgin Media Business Disruptors 10 and this year’s Fast Track 100 companies are in the vanguard – and when it comes to tapping untapped business potential, there is much to learn from them.