Why digital-native unicorns and startups must focus on digital experiences to maximise business success

Digital experience is rapidly becoming a major battleground for organisations in almost all industries. The opportunity for startups to disrupt and steal market share by delivering brilliant digital experiences is vast; but the risks of slipping up are just as great, with consumers turning their back on any brand which fails to provide a faultless digital experience.

Founders should take a moment to consider the extent to which their businesses are in a position to deliver seamless digital experiences at all times. The worrying reality is that within most organisations, IT departments and app owners are facing crippling complexity and are struggling to get visibility across an increasingly fragmented IT and application estate. The lack of tools or insights required to easily identify IT performance issues increases the risk of poor digital experiences for customers.

As a result, technologists across India are looking to implement full-stack observability to generate a unified view of application performance and internet experience so that they can quickly identify and fix issues before they impact end users. Full-stack observability, linked to real-time business KPIs, can ensure technologists within startups to prioritise their actions and investments based on what matters most to customers. And in doing so, they can drive the digital experiences required to accelerate the next phase of growth.

Thriving on increased appetite for digital services

According to a PwC report, a total of $10.9 billion was raised in 347 deals from July to September - twice the amount raised in the same period in 2020 and 41 percent more than in the second quarter of the year. The Indian startup scene has scripted a phenomenal success story, particularly against the backdrop of a global pandemic and fragile market.

Technology and innovation are transforming the Indian business landscape, with digital-first startups disrupting almost every corner of the traditional economy. Whether it’s fintech, edtech, e-commerce, healthtech, foodtech or SaaS, digital native brands are identifying underserved markets and moving quickly to design customer-centric solutions that are more accessible, faster and personalised for consumers. And given the size of the Indian market, those startups that get it right and are able to deliver engaging and faultless digital experiences, have almost unlimited opportunities to grow.

According to the recent App Attention Index 2021 report by AppDynamics, the average Indian consumer now uses more than 60 applications and digital services on a regular basis, far more than people in the US, Europe, and Japan.

Lockdowns and tight restrictions on movement and face-to-face interaction have forced people to explore new applications and digital alternatives they might not have otherwise considered. And interestingly, an astonishing 84 percent of global consumers report that digital services have had a positive impact on their lives during the pandemic, enabling them to get through this challenging period and to cope and function in most areas of their lives.

More than anything else, it is this seemingly insatiable appetite for innovative digital services that is fuelling the dramatic growth in the Indian startup scene this year. It explains why more than half of India’s unicorns have reached that status in 2021. And given that most consumers expect their reliance on digital services to increase even further over the next 12 months, it seems likely that this level of hypergrowth will continue throughout 2022 and beyond.

Expectations around digital experiences

As consumers have become more sophisticated in their use of applications, tolerance for poor digital experiences has diminished. With the advent of high-speed internet, digital intolerance is ubiquitous and latency is now perceived as the new outage across the country.

In our research, 69 percent of Indian consumers reported that their expectation of digital services has changed forever during the pandemic and more than two thirds readily admit that brands have only one shot to impress them. 

This is the tightrope that digital-native brands in India are now walking. Even the smallest slip-up in performance can lead to more than half of their customers walking away, possibly never to return. Add to it, the negative press and publicity that outages create, which further damages the reputation of the brand and impacts valuations and investments.

Caught in an innovation race

By their very nature, hyper-growth startups rely on constant and rapid innovation to disrupt established incumbents and create differentiation in the market. But the speed of digital transformation has soared to new heights over the last 18 months as startups have scrambled to meet changing customer needs and exploit new opportunities during the pandemic.

In another recent study conducted by AppDynamics, Agents of Transformation: The Rise of Full-Stack Observability, technologists in India stated that digital transformation within their organisations has been running more than 3.5 times faster than it was prior to the pandemic.

This rapid innovation is firing India’s startup economy, but the danger for hyper-growth companies is that this pace of transformation can quickly become unsustainable without the right infrastructure and processes to scale operations in line with demand.

After 18 months of constant innovation, technologists find themselves attempting to manage an increasingly sprawling IT estate, complicated further by massive adoption and proliferation of technologies like micro-services, APIs, and other cloud-native technologies. In response, most startups have recognised the need to monitor and manage the full application and IT stack, from customer-facing applications through to core infrastructure such as network and run-time application security. But this enhanced observability has meant that their technologists are now being overwhelmed by massive volumes of performance data from across their IT estate, further adding to the complexity they face.

Technologists need visibility to sustain hyper-growth

Unfortunately, many startup technologists find themselves without the right tools to cut through complexity and turn this mass of data into meaningful and actionable insights. They haven’t got the visibility they need to monitor IT performance and identify issues early so they can be fixed before they impact end users.

Our research found that as many as 86 percent of technologists in India are still relying on multiple, disconnected monitoring solutions, more than in any other country. And this is making their day-to-day extremely challenging, if not impossible.

It is important for hyper-growth companies to ensure that they get unified, real-time visibility into IT performance so that their technologists can quickly identify causes and locations of incidents and sub-performance, rather than being on the back foot, spending valuable time trying to understand an issue. In short, they need to migrate to observability from the traditional approach of just monitoring the performance.

But, more than this, they need to ensure their technologists can connect full-stack observability with business metrics, so that they can immediately identify the issues that could have the biggest impact on customers and focus their efforts in exactly the right places.  

Indeed, our research found that 100 percent of technologists in India believe that it’s now important to be able to monitor all technical areas across the IT, application, and network stack and directly link technical performance to business outcomes.

The worrying reality is that unicorns and startups are currently asking their technologists to optimise application experience and performance at all times and deliver the innovation required to fuel their next phase of growth, yet many aren’t providing their App Ops and SRE teams with the tools and insights they need. If their technologists are unable to deliver seamless digital experiences to their customers, then startups are jeopardising much of the success and brand equity they’ve built up over the past 18 months.