
Ask YC: Can you learn an industry without working in it? - alex_c
Let's forget Twitter and Facebook for a bit.  I think some of the most interesting opportunities are in industries not directly related to software, where creative application of software can make a huge difference.  Octopart is a great example.<p>The reason there are many such opportunities is that very often software people focus their efforts on rehashing the same themes - software for developers, software for "business", social software, or software for its own sake.  And the reason behind this is that many developers aren't exposed to the other industries - mechanical, chemical, transportation, hospitality, farming, industrial fishing... the list can go on and on.<p>So, a long-winded way to get to my question:  Can you learn an industry without working in it, to the point where you can spot the gaps that can be filled with software?  If so, how?
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josefresco
A story to share: My wife worked for a local Land Rover dealership for a short
time a couple years back. I visited one day and saw the computer system they
used and was _shocked_ at how ancient and horrible the interface and hardware
were. For a dealership selling 80K Range Rovers I thought it was downright
crazy that they were using software that looked like it was from the 80's.

I realized however after talking to her boss that I couldn't just waltz in
there and tell them I'd solve all their problems with my new shiny software
app. I needed a connection, several steps up the corporate ladder to have any
chance of landing that gig. Which in turn would require years of working
within the corporation or at least experience in a related field to give me
credibility (and designing/building web 2.0 apps doesn't count)

Something so simple to me was in fact tied up by a very traditional model
where "who you know" is more important than what you know or what you can
deliver.

Some uber geek walking in to your industrial fishing plant and offering to re
design your software (for a fee of course) is not going to be welcomed with
open arms. Pre-existing relationships are very important and still play a
major role in where money gets spent (software industry or not).

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steveplace
My wife has the same problem. She's a public school teacher, and their
software makes my eyes want to bleed. They still use a text-based GUI for
their attendance system.

And they've got a piece of software to input your lesson plans, but you still
need to print it out at the end of the year.

However, the school and the district have leadership problems, so software
should be a little lower on their priority list.

I've thought about hacking up an easy classroom/school management app that
would be similar to WordPress. Install and go.

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mattmaroon
There is actually some (relatively) good software out there for public school
teachers though. Some are even web-based, SaaS models.

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whalesalad
The startup I work for :)

<http://schoolrack.com>

We're extremely (this week) close to launching student and parent account
types, so students and parents will be able to easily collaborate with
teachers via the already existing features we've got, plus we're going to add
a gradebook, discussion board, and quite a few other features.

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SwellJoe
This is what business partners are for.

I've considered entering the medical billing industry on several
occasions...because my sister owns a medical billing firm with several small
to mid-sized clients in Atlanta (large clients have in-house billing
departments). And the software in the field is atrocious and expensive. But I
wouldn't consider it, if I didn't know just the right person to partner up
with that would allow the software to be used _immediately_ for real work with
real clients.

Such a partnership doesn't need to be 50/50. You can certainly find someone
who is experiencing pains in the industry you're interested in. Invite that
person to dinner, bring a note pad, and figure out the smallest functional
piece of their infrastructure you could replace that would solve a real
problem better than existing tools. Once you've done that, get commitment from
that person that when you build it they will use it (not buy it, just _use_
it, for real).

From there, keep working to replace pieces of the existing solution with
better ones, while marketing directly to the people who need what you're
building. Every new customer will increase the word of mouth network effect
within that particular industry, and when they love your first widget, you can
then start campaigning for them to buy your second widget. Lather, rinse,
repeat, until you've replaced every component in their existing system with a
better product.

Another way in is to build ancillary tools that make aspects of the existing
solution nicer. Think Lotus evolving from the charts plugin that Mitch Kapor
wrote for Visicalc.

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edw519
"Can you learn an industry without working in it"

Why would you want to?

Maybe I'm in the minority here, but I write software to enable me to do other
things, not just for the sake of writing software (although that's pretty
cool, too).

I've worked in many different industries and the software needs are
astounding. Between what you will witness and what people tell you, you will
never lack for ideas or opportunities. I can't imagine sitting in some ivory
tower (or cubicle farm) trying to come up with ideas and building solutions. I
_have_ to get out there and see what's happening.

Make no mistake about it, I _do_ enjoy sitting and hacking, but only as a
means to fulfill much greater ambitions. I can't wait to get out there and
implement. For me, that's way more fun than writing the code.

If you wrote code and no one ever used it, would you still be happy? For me,
that's a resounding "no". Probably because I've spent so much time in
"industry" that I realize there's still so much more to do.

Ask a different question: Where can I find a place in an industry that would
give me a better chance to blossom?

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colortone
No, unless you can find some information independently (via research or
people). That info is hard earned and you will be a lot less convicted (and it
will be harder to convince people that you're right) if you have no direct
experience.

If I was a hacker, I'd be looking for smart/irreverent/idealistic people in
industries with big problems to partner with. That sounds a lot more fun.

See Fred Wilson's post from today.

I think this very point is why there are soooooooo many "productivity apps"
and "music reccomendation" apps. All software people listen to music and want
to be more productive.

What about fashion? What about auto mechanics? What about schools in India?
What about transportation in rural China?

I strongly recommend Umair Haque's article on "Hacking the Industrial
Economy":

[http://discussionleader.hbsp.com/haque/2008/05/last_week_i_a...](http://discussionleader.hbsp.com/haque/2008/05/last_week_i_asked_how.html)

Great question!!!

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danielrhammond
I think one of the best ways to break the barriers software
developers/entrepreneurs face in understanding industries outside of the
normal niches is to sit down with people in the industry and have a therapy
session of sorts. Don't sell anything, but instead listen and learn carefully
to what their concerns and problems are.

People in industrial fishing may not think that they have a need for new
software, but there are undoubtedly needs and issues within the fishing
industry that are completely opaque to those outside of it. And where there
are pain points there are opportunities to innovate.

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prakash
Yes & No.

Yes, because, you don't come with the pre-conceived notions, assumptions that
hamper that particular industry. you come with a fresh set of eyes, you ask
why a lot and come away with a lot of interesting observations.

No, because, you don't have enough data points; meaning what you observe could
be representative of one company or the entire industry.

To the how part of your answer. Work at a job that gives you the data points.
You could speak to the founders of all the companies in the hospital health
records and HIPPA compliance industry for eg.

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michael_dorfman
Yes, you can. It may be easier if you do work in it, of course, but even that
doesn't always help, because you may be mistaking your particular problem with
a more general need.

The trick (if you can call it that) is to speak to a number of people in
different roles in the chosen industry, and try to elicit different problems
that need solving. Then, run the results by the others, and listen carefully.
Read the trade journals, and see what solutions are out there, and you'll see
what the gaps are.

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foodawg
I have to agree with this point. No, you do not have to be part of an industry
to do work in it. It will certainly make the proposition very difficult
however.

One of my YC ideas was a product aimed at the HR industry. I personally have
no affiliations with it but my co founder was a part of it. While my ideas
were very interesting from a freshness perspective, I was often was off from
what our client base wanted the most.

The benefits of being part of the industry is having connections, knowing
where to look, and what to look for. If you are not part of it, this can be
time consuming and costly. It's extremely beneficial to have a co founder, or
just an adviser with industry experience. Like Michael's comment, their leads
give you many heads to run ideas by, and the resources necessary to understand
your clients.

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michael_dorfman
The ideal situation in many ways is to partner with somebody from the
industry. As you say, this can be a great source of domain knowledge, and
contacts. A domain expert with business skills makes a great co-founder;
alternately, a trio of techie, domain expert, and business manager.

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mkull
I would say yes, but it really depends on the industry and situation.

We entered the powersports vertical because we saw that the best of breed
ecommerce sites really were not cutting it. We planned to differentiate
ourselves on technology, infrastructure (due to our technology) and user
experience. We are about a year in and are exceeding. We came in with really
no experience in this market or industry. See my past comments to see what
startup I am referring to.

We did however, spend a lot of time researching our market as we went a long,
so their certainly has been a learning curve. However it was not the most
difficult obstacle we have faced.

Quick iterations on our product / agileness in our software and listening to
customer feedback has been key.

Feel free to drop me a line if you have any specific questions.

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gaius
The answer to this is that it depends what their problem is. There is a lot of
horizontal stuff that is applicable to any industry. You could get a lot of
experience building (say) workflow software in one industry and reuse that
knowledge in any industry. This is the classic systems analysis approach.

But if that industry uses software to solve problems directly, then you will
need domain knowledge. You could be the best C programmer in the world, but
without the domain knowledge all you could offer (say) a biotech company would
be help in optimizing their code or writing generic functions such as the user
interface or the data access. How could you write code to simulate protein
folding without knowing it yourself?

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dennykmiu
I think you are asking a very important question for any entrepreneur which is
"how do I go about finding a substantial business opportunity upon which I
could build a viable enterprise?"

Recently I wrote about "entre-sumer" which I believe is an important
cornerstone for bootstrapping startups. Basically I am arguing that we need to
refine the "Build Something People Want" concept further by narrowing it to
"Build Something I want".

That is, to maximize our chance for success, we need to be the "entre"preneur
who creates the solution and at the same time, be the con"sumer" who has a
burning need for such solution.

So in that sense, the Founders of Google, YouTube, Facebook and Twitter, etc.,
were doing just that. They were the representatives of their generation and
they were the "alpha" dogs. By eating their own dog food, their success is
assured since by definition there are plenty of "beta" dogs who would follow.

But rather than saying that these are "software-related" opportunities, I
would say that these are E2C opportunities, building an "E"nterprise to sell
to "C"onsumers.

My own opinion is that while these are interesting and highly visible
opportunities, they have the fundamental problem that more often than not, you
will be competing with "free". It is difficult if not impossible to get
consumers to pay, however much they might live to depend on your products and
services. So typically the viable business model is advertising, i.e.,
monetizing eyeballs.

The other side of the coin, and I believe this is the gut of your question, is
E2E, building an "E"nterprise to sell to other "E"nterprises.

Then the answer to your question is YES. Someone in your team would need to
come from that industry who can be the "surrogate" customer.

My experience with selling to enterprises is that customers are actually not
the place you start when you build a company from scratch. They know how to
criticize an imperfect product but they have no idea what to do with a perfect
PowerPoint. You need to have someone inside your team who has the insights to
guide your vision. If that person is you, it is the best.

Hope this helps.

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tadej
I think that not working in an industry often gives you a unique perspective
that might as well make you more likely to spot a particular gap its regulars
are taking for granted.

Of course you will need some insider knowledge, but oftentimes not all that
much - a lot of industries develop similar approaches to solving similar or
analogous problems, but with varying access to the underlying knowledge/skill
needed to making it effective.

You will need to be a bit of an anthropologist and a good communicator to get
the relevant information from people whose working days you plan to
optimize/improve with software.

I'd say observation with an unspoiled eye can work wonders :).

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elad
In my case I didn't work in the industry that I'm trying to serve now, but
instead realized that a solution from an industry I did have experience in
could be applied to another one.

The problem is that you're guaranteed to get it wrong at first, simply because
you don't fully understand what people in that industry need or want.

What we did was build something, show it to some people, get feedback,
improve, repeat the process. We're in our third iteration now, and I believe
that we're closing in on a real solution. Of course, if it was a solution for
the software industry, we could have been there much earlier...

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HeyLaughingBoy
Of course. I have a hobby that is also practiced professionally by a lot of
businesses and I have been thinking recently of building a software package
for the smaller providers since I have a lot of insight into what they need.
Because it's also my hobby, I'd be eating my own dogfood and can see what
works & what doesn't.

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Xlp-Thlplylp
Can you learn an industry without working in it? My boy, that, or rather the
converse: that you can work in and manage an industry without learning it, is
the great promise that MBA programs make to their students. The idea that
there are abstract principles of management, of dressing down subordinates, of
bringing in new business and cutting costs (that's all that CEOs do,
essentially) that free the MBA from ever having to dirty his or her hands with
the business--their primary, all-consuming interest, they protest--is for them
a feature, not a bug. It's business processes all the way down...

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marcus
If there is an industry that interests you, go to a few trade shows in that
industry space, you can meet the key companies, see demos of all the latest
things, learn the lingo and so on.

Most professional trade shows aren't cheap (expect to pay 500-3000 dollars)
but they are probably the most time efficent way to get to know a new
industry.

This also works great as a creativity boost, learning about different problems
and different solutions can generate a ton of new ideas for your domain
problems.

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aggieben
You don't have to "learn an industry", you only have to be made aware of a
problem in enough detail for you to solve it.

That can be done by learning an industry, but that's the expensive way.
Cheaper is to have broad first-hand experience, or a large network of people
who will tell you about problems that need to be solved in their industry.

