Integrated or specialised

Over the past decade, entrepreneurs, investors and the media have stressed how important it is for companies to specialise on one thing and do that thing really well, better than anybody else in the world. From a pure theoretical standpoint, it makes a lot of sense: the less you do – the higher the chance you’ll do it really well.

But there’s a saying in Romania that sounds something like “the reckoning you make at home will never match the one at the market”. In other words, what sounds good in theory is highly unlikely to be true in practice, especially when there are more than two parties involved.

I’ve experienced this first hand recently, in an interactive video campaign we’re involved with at Brainient. The parties involved are: a big global household brand, a media agency, a creative agency, a production agency and Brainient. Each party had at least two people involved in all conversations. It started off well, with everybody understanding what needs to be delivered, when it needs to be done and what Brainient needs in order to be able to create the campaign. We delivered the first iteration of the campaign a day before deadline, and then all hell broke loose. Feedback started coming from all fronts. One email thread turned into twenty. Everybody started freaking out that we’ll miss the deadline. None of the assets were sent on time. The client had no idea where the project was or whether it was going to be live on time. It was very painful and required a lot more work than it should’ve, but we ended up delivering on time. The launch went great, and everybody’s happy. But it made me ask myself whether the best way to build a business these days is by being integrated (doing everything yourself) or “specialised”.

The strongest case for integration is, of course, Apple. They’ve always tried doing everything themselves, from hardware to software to distribution. It’s worked quite well, I’d say. Then there’s Microsoft, who’ve recently announced that they’re going all in and focusing on launching complete products, not just software: Xbox and the Surface Tablet are good examples.

Then there’s the case for complete decentralisation & specialisation, like Facebook. They’re not building any hardware, not doing any content deals and not even building all that many apps. They’re all about being a platform that others integrate, one way or another. Or Oracle, who build the database & tech stack technology that you can build on top.

And then, of course, there’s the case for the consumer (or customer if you’re in enterprise sales) who wants either specialisation or complete integration, depending on trade-off for quality / price. If the price is similar and the specialised product doesn’t provide a major advantage compared to the integrated one, customers will always go for the integrated version that provides a wider range of stuff. Think about it: unless there’s a 15%+ difference in price, we make most of our online purchases on Amazon because it’s integrated (it has your card details, your address and you know exactly what to expect when being delivered something).

This will happen to the ad-tech industry over the next 18 – 24 months. There are too many suppliers, media owners and tech providers servicing media agencies and brands so these guys are looking to integrate everything. It’s why the agency trading desks and DSPs have grown so quickly. So if you’re an ad-tech startup, it’s OK to be specialised but you also have to be deeply integrated into the ecosystem. It’s something we’re doing more and more at Brainient and it’s really difficult but it pays off big time.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s