This past five years has seen an unprecedented growth in agencies that focus on Digital Innovation. Recently, startups have been blessed with the massive amount of choice in agencies available to them, providing every kind of startup-related service imaginable. Now that the industry is starting to mature, there are a few trends that everyone involved should seek to understand in the London Startup Ecosystem.
One striking feature over the past five years is the amount of companies offering to develop the Minimum Viable Product (MVP) and provide very early stage business services.
While this is still very much the case, agencies are starting to realise that it is more profitable and less risky to allocate their resources to companies that have already proven themselves in MVP stage. Such companies have proven that their MVP works, but lack the resources to effectively scale up their business model. Agencies that are able to help this scaling process are compensated by the revenues that likely follow.
Large corporations were initially slow to tap into the innovation in innovation. Large, burdensome Research and Development departments tended to needlessly waste resources, and new ideas were rarely tested before being ‘finished’ products.
Recently, we have seen the emergence of what is known as Corporate Accelerators; corporate branches focused on mentoring and building successful companies. Some of the biggest names include Microsoft Ventures and Accenture Digital.
If a client wants a service that an innovation firm cannot provide, that client will likely turn to a competitor. To avoid losing out on such business relationships, there is a pressure on innovation firms to provide every service a digital start-up will need. As Innovation Agencies grow, they are able to accommodate a wider range of services.
In order to accommodate supplying more services, it is often easier to partner with another firm that supplies this, than to build an in-house team. The fact that 36% of businesses report working with double or more partners than they were 2 years ago emphasises this. As the industry matures, stronger relationships are formed between companies, and co-venturing becomes more prominent.
With the market becoming more and more saturated, the number of new Digital Innovation Agencies cannot keep growing at the same speed. New firms will find it increasingly harder to compete with the resources of corporates or established innovators. With a large playing field of responsive competitors, startups with a narrower selection of services to offer will struggle to find profit.
Innovify is a fast growing digital innovation & product management company.
Offering a wide range of expertise, Innovify helps clients to develop innovative products that enable them to focus on key business drivers using a collaborative work model that functions on an Agile & Lean philosophy. Innovify has become a trusted partner to its clients by going beyond the typical scope of application development through a range of digital products such as websites, apps, and software