How to build competitive digital services

You are compared to everyone

All companies with any form of digital presence will be evaluated and compared against their competitors. And they don't even have to be competitors within the same market segment; our behavior is the same regardless of which digital service we use, and we compare services and products with those we use daily. Does the service work as it should? Is it easy and intuitive to use? Does it feel fast? Can I use it everywhere?

A user has the same high expectations of a digital service regardless of who is behind it or what industry it's in. Some call it free competition, others see it as unfair. Google is an example of this unfairness. They have all the prerequisites to build the world's best digital services: the money, the brains, the company culture, the infrastructure and the channels to reach users with the service. But how is a relatively small player in a local market with a significantly smaller budget supposed to measure up to Google, Netflix and Amazon? The simple answer is: you can't.

The point is not to compete directly with Google over their core business, and that's not what we want to highlight with this example either. What we want to point out is that you will be compared with other players, including Google. A user doesn't see and doesn't care that one service had a budget of 1 billion while another digital service had a budget of 1 million. They just want the best service and the best user experience.

This leads us to the next question.

How can you build competitive digital services?

Assuming you are not aiming to build the world's best, biggest and most used search engine, you actually have every opportunity in the world to build competitive digital services. It is in the concept of "best" that you find the opportunities.

• Best for whom?
• Best at what?
• Best where in the world?
• Best in what way?

By thinking in this way you open up a host of new opportunities to compete, even with large players. Just because a player is big does not mean they are always the best.

Imagine a digital service that does everything everywhere in the world in an optimal way — for everyone. It does not exist. There is always room for variation and innovation. By focusing on a specific market, and with unique knowledge of it, you can manoeuvre larger global competitors out by tailoring the service linguistically, culturally, functionally and in terms of support for that particular market. The services of global players easily come across as identity-less and somewhat irrelevant in comparison.

The dimensions of the concept of "best" that we listed above are therefore about finding a niche within which your service is competitive. Best for a certain audience, at a particular thing, in a certain market or doing something in a way that is better than your competitors'. Fortunately, the fundamentals of a functioning market economy also apply to digital services.

We've all at some point sat at the computer with a specific problem and searched for a service or product we wish would solve it. And we've all at some point run straight into a dead end and been forced to realize that there actually isn't a service or product that solves the problem in a — in your opinion — good way. This has historically been the starting point for many new companies and is proof that there are always opportunities to compete as long as you do it the right way.

If you're small, you're close - make the most of it

Many years ago it was already clear that two big trends were coexisting: the global and the local. We use global services, e.g. Facebook and Instagram, to communicate locally, with our family and friends. We buy things from global giants like Amazon and Wish while also shopping locally at our grocery store or at the local bike shop. We search on Blocket and narrow the searches to the local neighborhood while Blocket as a concept today exists in over 40 countries.

So even if you are not a global player, there is room for and demand for high-quality local digital services. By local we don't mean the small village but rather Sweden or an industry within the Swedish market. As a smaller player you can leverage knowledge about your local market and use it to build services that people understand, like and want to use. Many services that are global today once started out as local. For example, Blocket was originally a regional classifieds market for the Skåne region.

There are therefore advantages to being small. Take advantage of being close to your target group, design the service in a way that makes them feel at home and see it as relevant to their needs. For a global player this is hard (and not always desirable) to achieve because their organization is structured to act globally with the mission of building general digital services that suit everyone. In that process you often have to compromise away specific details that would otherwise be desirable for the local market.

If you've ever scratched your head and wondered what to fill in when eBay asks which "State/Province" you live in and you can't skip it because it's mandatory, you know what we mean.

"The service already exists" is not an argument

You've probably heard the phrase "There's an app for that" — a nonchalant way to answer a question or respond to complaints about first-world problems. The phrase originated as an Apple ad campaign, but it has taken on a life of its own. And indeed there are plenty of digital services that promise to solve all the world's problems and prove indispensable. In light of that, it's easy to give up and think everything's already been done.

But scratch the surface and you quickly see that many digital services are both poorly thought-out and poorly designed. So despite the fact that a service already exists today, we mustn't forget that there's always room for improvement and innovation in terms of idea, business, experience and technology. All of these parameters can be tweaked over time to beat the competition and thus become the best.

We would even venture to claim that it's fairly easy to become a successful provider of digital services within industries and market segments that, for various reasons, are overlooked or underdeveloped. As a digital agency and partner to our clients, we often come into contact with a wide range of industries where, with a mix of horror and delight, we are surprised at how underdeveloped many of the existing digital services are. It can be anything from missing important target groups to the user experience not being world-class and as good as it could be.

Play with the idea that you would be allowed to keep five of the digital services you use today and be forced to delete the rest. Would the service or product you and your company designed and built be allowed to stay, or would it end up in the trash?

Use the services of the major players as components in your own service

There's a worn expression that goes "If you can't beat them, join them." Contrary to what you might think, it doesn't mean you should give up. Instead, you should use the same tactics as your opponents to win.

As we've touched on before, it's not realistic to challenge the really big players in their core business. It's smarter to think the other way around: which of their offerings can I incorporate into my own service. Google, Amazon, Microsoft and Facebook are four companies that fall into the category of digital service giants, all of which provide cloud services, components and platforms that speed up the development of other digital services.

If you don't have very specific needs, there's no reason not to take advantage of the infrastructure they provide, often at very competitive prices. Looking at how many start-ups set up their digital services, cloud services often form the base in the form of data storage, authentication and APIs.

Summary

Let's summarize what we think you should take with you when you plan either to design and build a completely new service or further develop the one you have today. And as always you are of course welcome to contact us so we can discuss and talk more specifically about your particular needs.

• Find a niche and a target audience that you know and that is underdeveloped, and build your digital service around it.
• Don't see end consumers as the only target group for your digital services. There are plenty of other overlooked audiences with clear needs, not least in business-to-business.
• Realize that your target audience will compare your service with all the other digital services they use in terms of design, functionality and usefulness. Make sure your service holds up in that competition and has a clear, distinct identity.
• Take advantage of not being a global giant and build your service specifically for your market and your audience. This way you can add details and value for a local audience in ways that large global players don't want or can't.
• Look at what others have done but don't get stuck there. Many digital services are poorly thought through and poorly designed or built — learn from their mistakes and build something that beats them.
• Let the large digital service companies do the heavy lifting when it comes to basic technology. Use their infrastructure, components and platforms as a foundation for your own service.

Also read