Accelerating digital Europe: Matthias Schrader’s long term perspective on what comes next
Matthias Schrader has been part of digital transformation for a quarter of a century. Here's what he told the audience of our online show about what he's learnt about digital success.
Matthias Schrader leads Accenture Interactive in Germany, Austria and Switzerland. Since the early 80s, he has specialised in the world of technology and the internet. During this time, the IT industry has experienced exciting change and development, which Matthias witnessed and experienced himself.
During the first episode of the second season of What’s NEXT, he explored the longer-term perspective on digital disruption, and what Europe needs to do to accelerate transformation in the post-pandemic period.
Perspective is an undervalued trait, and with nearly a quarter of a century at the leading edge of digital innovation, Matthias Schrader has plenty of it.
Germany has actually deinvested in digital, he suggested. In the pre-dotcom era German founders launched companies, many of which went on to great things, but after the bust, retreated and left digital innovation to the American startups.
Germany already has companies that have the potential to be truly global successes. Unfortunately, Schrader has seen a repeated pattern of underperformance from such startups. Why? They think too small. They fail to achieve that growth before they sell to, and are subsumed by, US companies.
Europe needs to think big
What does thinking big look like to Schrader? Well, for a start, he thinks that something often cited as a disadvantage of digital businesses in Europe is actually its strength.
“Europe has no shortage of capital or talent,” he said. “We have cultural diversity across Europe, which is hugely valuable. These are the ingredients to put together something truly remarkable. We should be excited.”
Accenture Interactive, which acquired the company he founded, SinnerSchrader, back in 2017, reflects that diversity. It has a female CEO, and around half of the leadership team is female.
“Many of the startups of the past have been started by males, so we need a more diverse gender perspective in the next wave of startups,” he said. Part of the challenge within Accenture that he enjoys is creating a platform where the cultures of people with differing skill sets can come together to deliver value through combined work.
The pandemic has changed our behaviours.
“The mobile phone has become the universal remote controls for our lives,” he said. “What doesn’t happen on that screen doesn’t happen at all.”
However, it’s still too early to judge the consequences: is this an overlay of temporary changes on a familiar situation, or an acceleration of transformative change? he asked. While it might feel like the pandemic has been with us forever, we’re less than a year in, and so we lack the perspective — yet — to be sure.
That was the consistent message of his talk: always keep your eye firmly on the long term. Every startup that is really successful has a decade-long roadmap to take them there. You can duplicate and disrupt a product that is purely software.
Businesses with a defensible position combine the digital and physical in interesting ways, be it Amazon with digital retail, or Apple with the hardware/software combination.
The 10-year horizon
You need a years-long vision of how your company will succeed. And that means planning how you are going to combine physical things with software to create new businesses and opportunities. Without hardware, businesses are vulnerable. New software competitors can spring up quickly. We’re seeing this with social networks in the US, as new ones spring up in response to Twitter and Facebook clamping down on misinformation.
Do AI and machine learning change that dynamic? “No. Differentiation of services and products is always critical — just using AI isn’t a magic bullet to resolving that,” he said.
Schrader had one piece of advice for anyone looking to build a new business now: aim for 10 times more money than you think you need.
“There are high-profile, well-funded failures, sure, but there are so many more failures of small and medium-sized bets,” he explained. “Money makes it much more likely you will succeed.”
It’s time for Europe’s digital scene to think big: and seek the big funding to accelerate it.
This is a summary of an interview with Matthias Schrader, conducted by David Mattin and Monique van Dusseldorp during the NEXT Show on November 12th 2020. You can catch up with Matthias and his work on Twitter.