Ask HN: Starting a new business venture in new markets and industries | Hacker News Reader

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

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I'm looking to transition from web development to starting a new business venture, not necessarily within the tech industry.

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.

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.

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.

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.

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.

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

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)

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.

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.

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