If you’ve got street smarts, ambition, and the willingness to work harder than your most diligent competitor, you don’t need to be a degreed expert in a particular industry to get a business off the ground there.
At the same time, you can’t simply pick a field out of thin air. You need to do your due diligence to ensure that an opportunity exists.
This presents a chicken-and-egg problem: if you don’t have expertise in a given field, how can you identify genuine opportunities in it? Many businesses fail, after all, because entrepreneurs fell for an apparent temporary opportunity riddled with underlying weaknesses.
This is how. These five tips and best practices should help you identify an opportunity wherever it’s to be found. Although, it’s important to remember that every company, industry, and entrepreneur is different, and absolute generalizations aren’t advisable.
- Identify Secular Shifts
Look for a major, lasting shift in consumer tastes or business decision-making processes, then start a business that exploits it. For instance, restaurant chain Chipotle is widely credited with bringing wholesome, high-quality, sustainable ingredients to the fast food business, essentially inventing a new segment — fast casual — in the process.
- Bundle Existing Products or Services
Many of the world’s most successful startups are in the business of bringing basic services to a wider audience, as opposed to trying to reinvent the wheel with a flashy new idea. Some popular new inventions “bundle” two or more existing functions in the same product or service package, adding value for customers and boosting margins for manufacturers. For instance, the camera smartphone merges the desktop computer, telephone, and camera. Scan/copy/print machines blend the scanner, copier, and printer.
- Help Others Help Themselves
Many companies are in the business of helping others also end up helping themselves. Like “bundlers”, these firms don’t seek to reinvent the wheel. Instead, they provide straightforward, understandable services more cheaply and effectively than their clients can provide for themselves.
For instance, telephone answering services take service concepts (receptionist, call screening, appointment taking, call forwarding, and more) that have been around for years, apply new technologies and economies of scale, and create an opportunity for clients who can’t afford to provide those services for themselves in-house.
- Go Local
Consumers have always craved local products, services, and experiences, but this trend has lately accelerated. Nothing is off-limits here; whether you’re a great homebrewer looking to sell liquid gold to a local audience or a knowledgeable tour guide who wants to educate others about their own backyard, put your idea to the test with your friends and neighbors.
- Use Adversity to Your Advantage
All the market research in the world can’t change the fact that there’s no substitute for personal experience. Learn from negative experiences, and use what you discover to improve outcomes for those who come after you. For instance, the founder of doctor rating service MD Insider got the idea for his revolutionary service after contracting a post-surgical infection that nearly killed him. Years later, he’s at the helm of a successful startup that aims to make the healthcare system safer for all. In other words, when life gives you lemons, make lemonade.
Which industry are you most excited about in the near term?