If you went back to Times Square in the 1900’s and counted all the big brands at that time, you would have been able to count them all with you ten fingers. Present day?
You’ll need a mathematical genius to figure out the number of businesses now. Over the past two decades it has become much easier to start a business. The costs of starting up are low and because it’s primarily software, the initial capital is just human capital. Not every business needs a million dollars in funding.
What this has done to the world of business is, bring in a lot more creators. There are young people who are learning how to code and are shipping their products over the weekend. So that’s all it takes to really start a business these days.
Have you heard of the term ‘Saturated’ when people talk about certain industries. Well, the business world in a sense has become saturated with there being a lot of competition in starting a business. A few decades back, an average entrepreneur was in his mid forty’s and in today’s world an average entrepreneur is in his early 30’s. This marked shift is because everybody is starting a business and they are starting it younger as well.
There are a few disadvantages to this.
As an aspiring entrepreneur and when you are starting out, you would like to be the only company in your space, ideally. But, by the time you get of the beta phase, you can already see competitors cropping up. This is because the barrier for entry is so low.
You are competing against competitors in hiring talent, you are competing to get more customers, you are competing to get funding from the right venture capitalist and even sometimes competing for the domain name.
It’s not like competition is bad, it’s just that you put yourself at an disadvantage the moment you start a business. To aspiring entrepreneurs and also serial entrepreneurs looking to start a new business, here is my proposition to you.
Start a business in an emerging market or something completely brand new.
Many years back, the idea of a business was very prized, people would think that if you had a great idea then you had a shot at succeeding. In the present day it’s lesser about the idea and it’s all about the focus. Nothing wrong with this, but the idea is important as well. Back in the day, people would start a business because their idea was novel, wasn’t there in the market. Now, people start a business because a space is hot or the fact that there are just few companies vying for a $50 Billion dollar market.
What I mean by an emerging market is something that is coming up, but nobody is doing anything about it.
Let me give you an example.
There was a company called Kiva systems started by Mick Mountz who had worked on the failed delivery startup Webvan. Kiva systems was a robotics company that created robots that moved around the warehouse that helped with better stocking and movement of goods.
Kiva systems was acquired by Amazon in 2012 for $775 Million.
This is a perfect example of a company that used technology in a space that nobody had an idea about. There was always the concept of robotics, but they put it to use and created so much value that they were acquired.
Another example is Nest Labs.
Nest Labs was founded in 2010 that made an electronic, programmable and self-learning and Wi-fi equipped thermostat that helped with heating and cooling in the most efficient way possible. They were there In 2010 when there was little talk around home automation.
Google acquired them for $3.2 Billion.
Now these are the companies that aren’t widely spoken about, but they do exist. They are ahead of their times and solve an actual problem and there’s not a lot of rush from competitors to be making similar products because they have no idea.
The fact of the matter is, even an Industry like the space Industry will get crowded if there is a lot of buzz around it. The space race has companies like SpaceX, Blue Origin, Virgin Galactic.
So the Idea for an aspiring entrepreneur should be to focus on a brand new space much before anybody really thinks anything about it. The focus should be on building a serious product that solves a problem and there shouldn’t be focus on getting press or anything frivolous initially.
How do you look out for such opportunities?
The world is all headed a certain way and if you listen closely then you will be able to pick up trends. Of course there are articles and content put out there about what the world will look like in 30 years and so on.
Scientific papers or official technology journals can also help in identifying emerging technologies that would play a major role in the near future.
Building for an emerging industry could also be a game-changer. Everybody knows that driverless cars are going to be a thing, so building products for driverless cars can have a big impact.
These are the ways to think of emerging ideas. It might take some time to zero in on the idea and even convince venture capitalists to invest money, but if you get going and if you are able to bootstrap your way, then you stand a great chance in building a world changing product without too much competition to make things work for you.
Different companies are built in different ways and you need to look for future trends to build the companies of the future.
If you also take a look at lot of the top companies in the world, the dates they were founded and the dates where they actually had an impact in the market will be completely far apart. This is because it takes time to make impact and the sooner you enter a new sector, the bigger advantages you’ll have.
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