

Ask HN: Starting a new business venture in new markets and industries - orange5912

I'm looking to transition from web development to starting a new business venture, not necessarily within the tech industry.<p>I figured going into contracting and freelancing for web development would be a step towards owning a business, as I would be burdening the common business responsibilities of accounting, sales, customer acquisitions, branding, marketing, etc., while still being in a market and industry I am comfortable with.<p>Having recently read E-Myth, Illusions of Entrepreneurship, and The Business Road Test, I now have a different perspective on starting a business venture.  I've noticed the main emphasis and primary factor for success is deciding which markets and industries to go into.<p>My question is, if this is true, where do I begin this process of doing research on markets and industries?  Of course googling and possibly paying commercial services for data is one method, but as a first time entrepreneur attempting to go into new markets and industries, I find it very hard to really find concrete information, data, and whether or not it really is the right time and idea to go into a specific market and industry.<p>Are there certain markets and industries you would recommend?  Right now financial concerns (living expenses, financial barrier to entry for a specific market/industry) are not a problem, but obviously going into a market with a lower barrier of cost would be less risk, especially for my experiences of creating a business.
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fauigerzigerk
I think there are two pillars on which to base such a decision.

1) What domain knowledge do you have and what do you like to do?

2) What's changing in the world and in the markets.

I'm convinced that personal knowledge of what's lacking in a particular
business domain is invaluable. If you have that knowledge you know what people
want and that trumps everything else.

If you don't know anything outside technology itself you could read the paper
and look which sectors are in turmoil. I think the best sectors are the ones
that are most mature and the ones that are least mature and growing fast.

The reason why the most mature are interesting is that the competition is
weak. The competition there are the slowest most bureaucratic behemoths you
can imagine. Look at why Apple or Google (or Skype to some degree) could so
easily topple the powers of the media and telecoms industries. These
industries are very mature, very slow to react and very convinced of their old
broken ways. Or look at what happened in the airline industry. That's what you
want.

[Edit] Just one example that I have come across recently. I don't know what
it's like in the US, but here in europe the postal services are broken. We
used to have state monopolies that were slow and didn't innovate but package
delivery worked.

Now, the sender often contracts private delivery companies like DHL and they
optimise exclusively to the sender's benefit (that's their customer after
all). I received a computer from Dell recently. I was told to wait at home
from 9 AM to 6 PM. That's outrageous. If I missed the delivery they would try
again on the next business day and if that didn't work the package would go
back to the sender. They knock, wait for 30 seconds and then they're off. If
you're in the bathroom, that's your fault. You cannot collect the package
anywhere. That's a broken system that needs a new business model and new
logistics ideas.

~~~
orange5912
it definitely seems like identifying problems first and providing a solutions
is what most innovative entrepreneurs do.

i think whats less talked about is the less innovative business people who are
creating successful businesses being the middle man, buying and selling import
exporting, etc.

im wondering where ppl get experience in those fields too. im guessing you can
always start by getting employed in entry level positions such as sales, etc
in the respective industries. from that point on, thats where you're
'studying' begins

~~~
fauigerzigerk
I think many such small scale middleman situations start with someone offering
people a way out of thinking for themselves. Sometimes problems are not
difficult to solve, but you'd have to start to think about it and make a few
simple decisions and that would distract you from more important things.

So if you're the boss of a small TV station and you need some kind of IT
system and your seemingly computer savy acquaintance from your cousin's
birthday party comes up and says "hey man, I know how to do these things,
don't waste your prescious time on it, I'm gonna do it for you!" you're hooked
:-) There's trust, after all your cousin knows the guy, and even looking for
someone else would be a chore. So why not? That's how it starts. (This example
is not complete fantasy by the way)

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kynikos
Instead of trying to piggyback on to something that's just a new industry, see
if you can find something that is a new niche within an industry you're
already familiar with or are interested in working in.

I'd also recommend against freelancing as a first step towards starting a
company. Finding freelance work in itself can be a huge distraction towards
your end goal of creating a product--not to mention the actual work, dealing
with clients, etc.

Think about problems you or maybe your employers have faced in the past and
how a product might've solved that problem or at least facilitated its
resolution.

From there, do some googling, find some market research studies, talk to
people in the industry you want to break in to.

Unfortunately it can be hard to track down credible information among the
millions of "expert" blogs that populate most search results. The best source
of market data I've found to date is actually my old college's library. Now
that my student account is long since decommissioned, they do offer paid
access to info databases for alumni at a reduced rate.

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coopr
I've started businesses in a diverse range of industries: automobile parking,
gourmet packaged foods, real estate, online retailing, physical retail.

One key difference I've noticed between industries is the speed with which
they adopt technology. I believe many tech entrepreneurs mistakenly assume
that non-tech industries are as welcoming of new technology as tech-heavy
industries. Understanding the pace of technological uptake in your target
industry is highly important - and don't think you can change it!

One of the best ways I've found to understand a new industry is to attend a
trade show and talk with lots of people. Tell them you are new, and ask them
to explain the basics. Buy people drinks at the bar and quiz them. Get the
same few questions answered by a number of different people. Ask who the
industry experts are, then find them and get them talking - experts tend to
love to share their expertise!

I've found particular success by applying technological advances that give me
a competitive advantage in an industry that is otherwise slow to adopt
technology. Don't try to sell the technology, or otherwise compete on the
basis of the tech itself - instead, use the technology in a way that your
competitors would be slow or unwilling to do, and thus gain an advantage.

For instance, in my gourmet packaged food company I used a (then) new digital
label printing technology to allow me to experiment with new labels rapidly
and at very low cost. The labels weren't "perfect" looking, and my competitors
would not tolerate anything other than "perfect" labels, but customers didn't
care. I was able to quickly and inexpensively refine my labels, which resulted
in higher sales, without spending lots of money on new printing plates (which
my competitors assumed you needed to change labels). In this case, I used a
technological advantage (new digital label printing) to compete on an
industry-standard characteristic (label content) - I'm emphatically did NOT
try to sell digital label printers to the gourmet packaged food industry.

