Should You Reinvent An Industry As A Business Idea?

June 22, 2017

2:30 pm

No one has ever come up with a business idea entirely by themselves. Mark Zuckerberg revolutionized social media with Facebook, but Facebook was not even the first large social media website. The Bessemer process which made steel magnate Andrew Carnegie rich had been experimented with by other developers in the past, and every successful businessman’s innovations has almost certainly practiced to some degree by someone else.

That simple fact is proof that a new businessman should not believe that he must come up with some revolutionary, innovative idea out of nothing to earn millions. Established industries have plenty of niches and holes within them for a creative new business to exploit, while also having a foothold so that a new business has an idea of what can and cannot work.

Instead of thinking that you must invent a new industry out of scratch like many think Zuckerberg or Carnegie did, think about how you can reinvent an industry. Here are some things to consider for how to do it.

Look for Inefficiencies

If you want to look at a company which reinvented an old industry, look at Uber. Regardless of what you think about the company or its long-term viability, no one can deny that Uber has changed how we view transportation and how we get from Point A to Point B.

Obviously, Uber did not use new technology to invent taxis and transportation. What it did was invent new ways to connect the driver with the passenger, cutting out middlemen like taxi or rental car companies in favor of an easy to use app. Uber defined itself by using algorithms and technology to provide an old service in a different, better way which customers love.

Inefficiencies like this exist in any industry, and a smart, enterprising business can find ways to exploit said inefficiencies and find areas of improvement which will give your business its niche. A business should look to change how things are done, not trigger some industry-wide revolution.

Break Things Down

You have undoubtedly heard of the fact that in order to accomplish a large task, you should break the task down into several, smaller steps and accomplish each one in turn.

Finding inefficiencies in a business is a huge task, and thus should be broken down as well. But rather than breaking it down into steps, a business should break a large industry down to its fundamentals. Once it has a grasp of the fundamentals within the industry, a business can then ask the all-important question of “What is the problem?” If a business cannot find a problem and question to answer, it should not be in business.

What that question is differs in every industry. Uber’s problem was “How can I better connect passengers to drivers?” Carnegie’s problem was “How can I produce steel more cheaply and efficiently?” But a future businessman should take a look at existing industries and find inefficiencies by breaking things down to their fundamental levels and asking what problems exist within the industry as it currently exists. Once the answer to that question is known, then inefficiencies can be found.

Talk to People

After breaking things down, you may think that you have found an inefficiency in how an industry operates. But how will you ever know for sure if you don’t discuss your ideas with others?

A supposed inefficiency in an industry may actually exist for a very good reason. For years people were subject to restricted bandwidth on their 3G connections, having to use a signal booster to maintain connections. This severely limited the growth of the mobile app industry and related services. To go back to Uber, its detractors claim that Uber’s innovations in how it approaches its business ends up creating a worse product in the long run by hurting drivers’ livelihoods and letting disreputable individuals drive for others. You cannot know if complaints like these are relevant or now without talking to informed people within the industry.

Furthermore, informed people can help give your fledgling business the connections and resources it needs to survive. A business must fundamentally cater to all sorts of different people. Get their opinion early so you know how to.

Have Care and Passion

Finding inefficiencies and having good connections matters, but the most important thing a business owner needs is passion. You will not get past the initial stages of a business, when you will be working long hours on low wages for something that is more likely to fail than not, if you lack the passion to solve the problem which your business has found. While passion is not enough to create a thriving business, good startups survive because creating money is only a secondary goal compared to solving problems.

This means that a businessmen should look to reinvent those industries which he is passionate about. If you are passionate about an industry, you probably already know important people within the industry and ways it can be improved. And it is easier to work and fix an industry you know and care about than making up a new one from scratch.

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