Digital Transformation Project: Is Symbid your match?
Symbid, The Funding Network, is an online platform that brings together investors or institutes looking to invest and entrepreneurs in search of capital. Symbid abides by their mission statement “to simplify the way small and medium enterprises are funded through efficient and transparent technology”. The platform operates in a two-sided market in which it serves both investors, being the subsidy-side of the market, and entrepreneurs, the money-side of the market. Symbid integrates its information strategy into its business strategy successfully, but after thorough analysis a misalignment emerged from the value proposition. It was found that as a result of this misalignment Symbid is not able to offer its customers the success-rate of funding campaigns that it endeavours to achieve. This leads to both lower revenues on Symbid’s side and a lower incentive to use the funding network on the customer side.
Looking at the market situation, it was established that the threat of new entrants is medium to low since the know-how and customer base Symbid has built are not easy to replicate. In addition the threat of substitutes is moderate. There are few competitors offering the exact mix of funding possibilities Symbid offers, however there are many platforms offering part of this package that will collectively be able to offer a surrogate to Symbid’s service. Moreover Symbid has low bargaining power, both in the relation to its suppliers and buyers. All taken together this makes up for a competitive environment with both direct and indirect rivalry. The low success-rate of campaigns funded is leaving Symbid in a suboptimal situation. Firstly, it causes process inefficiencies, since the matching process takes long. Secondly, since the matching is done manually at the moment, the process is prone to human error. Thirdly, there is a loss of knowledge since the data gathered about customer preferences are not put to use.
The introduction of an automatic recommendation system could solve the low success-rate of funded campaigns. It is expected the system will proliferate the matching between investors looking for projects and entrepreneurs in search of funding, increase the number of projects funded, and provide an incentive for Symbid’s customers to use the funding network and hence create a stronger network effect. The implementation of the recommendation system will encompass both beneficial results and risks for Symbid. The first risk defined is a possible lack of data to deploy a well-functioning algorithm on which the recommendation system can base itself on. In addition there is no guarantee the recommendation system will inherently improve the success-rate to a great extent. However it is believed the benefits of the employment of the recommendation system outweigh the risks. Firstly, it will trigger more data driven management. This, combined with business vision could make up for good decision-making. Also, it will convert the tacit knowledge previously available into explicit knowledge. This will enable Symbid to automate parts of their process, which will reduce costs.
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