Do Startups Have a Tech Advantage? - eMarketer

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Do Startups Have a Tech Advantage?

Many rely on startup technology but fear potential threats to their business

November 9, 2016

For marketers, digital start-ups offer opportunities as well as a potential threats. Many marketing organizations have incorporated startup partners and their technology tools into their marketing efforts. Yet many are also wary that these partners could become competitors in the future.

Reasons that Digital Startups* Pose a Threat to Their Business According to Business Leaders Worldwide, March 2016 (% of respondents)

According to March 2016 research from Vanson Bourne for Dell Technologies, around three-quarters of business leaders worldwide worry that digital startups pose a threat to their business, either now or in the future. Among those concerned about the threat, 41% worry about startups’ early adoption of automation and “smart” machine technologies. Meanwhile, another 40% worry that digital startups are more agile because they are free of “legacy” technology and traditional business practices.

Yet even as many business leaders acknowledge the disruptive threats posed by digital startups, they’re often uncertain about how their organizations should respond. When asked what actions they were taking to counter the threat from such startups, close to 50% of respondents said they were obsessively focusing on customer engagement and satisfaction. Another 42% said they were growing their software development teams, while 39% said they were “embedding digital” across their organizations.

Actions that Their Company Is Taking to Counter the Threat from Digital Startups* According to Business Leaders Worldwide, March 2016 (% of respondents)

One reason for the varying responses to the threat posed by digital startups is that many marketers are already partnering with start-ups on a variety of marketing projects. A September 2015 survey from the Association of National Advertisers (ANA) found that more than half of US client-side marketers were already working with a startup on marketing tactics related to social media, while another 49% were partnering with a startup on content development and management.

Striking the right balance between gaining the benefits of working with such digital startups, and the potential disruption caused by these organizations, will be the challenge for executives in the years to come.

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