By Andrew Amann, CEO of NineTwoThree Venture Studio. He and his team have created 45 products and nine startups & were featured in the Inc 500 in 2021.
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Many startup businesses exist for the express purpose of disrupting the industry sector in which they operate. This is especially the case with certain startups armed with either a transformational or revolutionary business process leveraging a technology innovation. A variety of currently successful companies leveraged this concept, with Airbnb, Uber and even Amazon all providing their own unique examples.
However, other startups decide on a more altruistic approach by serving their targeted business sector. In this scenario, entrepreneurs—in many cases with meaningful domain experience—provide innovative solutions using recent technology to solve pressing pain points within that industry. These startups provide a road map for other businesses to improve their operational efficiency while serving their customers more effectively.
In the end, any emerging entrepreneur needs to understand the differences between disrupting or serving the chosen industry for their startup. While everyone wants to become the next Amazon or Google, a focus on reengineering outdated business processes ultimately provides a clearer path forward and a greater chance of success. Let’s take a contrasting look at both approaches to help you make the best decision for your new business. After all, new tech doesn’t have to completely change how a business sector operates to be impactful.
Successfully disrupting a business sector remains a rare occurrence.
If you formed a startup expressly for the purpose of disrupting an industry, your chances of success diminish as a result. As noted earlier, trying to become a new Google and/or Amazon ultimately loses sight of the fact that those types of revolutionary businesses remain exceedingly rare in the modern business world. This type of startup also requires massive continual backing from venture capitalists. Building a new business around this strategy increases the chances of a failed startup, especially when setting goals for the new business at the highest possible level.
This entrepreneurial arrogance becomes even more exacerbated when the startup’s leadership boasts little experience within that chosen industry. This makes it difficult for them to understand the relevant operational pain points within the business sector that stand to benefit from an injection of innovative technology. In these kinds of scenarios, meaningful domain experience becomes crucial to ensure a business idea boasts a real opportunity for success. Any startup ultimately relies on the strong vetting of its core business idea as well as the target market.
Additionally, setting realistic goals also plays a crucial role in the subsequent success of any startup. So instead of wanting to be the next Jeff Bezos or Larry Page, focus more on serving the chosen industry for your emerging business. Boasting a positive and altruistic attitude eventually pays dividends in the long run. Let’s take a closer look.
Serving your startup’s industry sector offers a better shot at success.
As highlighted above, successful startups that truly revolutionize and disrupt a business sector typically happen only on a generational basis. This remains why taking a more supportive strategic tack provides your business a better chance of becoming successful. Remember, optimizing various industry pain points by making operations more efficient with technology still offers multiple benefits to any new business.
This approach allows your startup’s leadership to truly make an impact as they take advantage of relevant domain experience to solve critical operational issues with the intelligent application of technology. If your emerging business lacks these relevant business insights, quickly hire talented professionals with the right background. They play a crucial role in understanding domain-specific pain points, in addition to vetting the business ideas crafted to potentially solve them.
This knowledge also helps in researching potential target markets for your startup’s mobile app, interactive website or digital platform. If it becomes difficult finding the talent with the technical and business experience in your chosen domain, consider working as a consultant in this area to gain that exposure. This upfront effort ultimately pays off in the long run. Simply flying blind and winging it rarely works as an alternative approach.
In fact, consulting offers a proactive approach when it comes to researching various industries as sources for intriguing market opportunities. This tactic serves well to discover underserved market niches where your startup has a chance of making a meaningful impact. It’s a strategy where having a positive attitude combined with a desire to serve the industry simply increases your startup’s chances for success.
Also consider forming a digital agency as an incubator for new startup businesses while performing project work for other businesses. This client work provides exposure to a variety of industry sectors, helping your startup build vital experience, expertise and a professional network as a resource for new business ideas as well as talented technology and business professionals. Your organization also earns revenue to be used as seed capital for new startups. Ultimately, it’s the best of both worlds for any entrepreneur.
If your goal as an entrepreneur is to launch a successful business, knowing as much as possible about the industry you’re in is the first step. The best way to do this is by helping serve other businesses, solve their pain points and learn about weaknesses and opportunities.