Keeping your finger on the pulse: How to start a business in the right industry
You can't always be in the right place at the right time, but starting up in a flourishing sector will up your chances of success
How do I start a business in the right industry? When you think about it, it’s a tough question simply because the what’s ‘right’ isn’t easily defined.
With trends, technology, and everything in between constantly changing, it can be tough to know what you need to look out for when you’re sizing up a potential idea.
Naturally, there are many factors that go into the definition of the ‘right business’. However, there are some that stand out as more useful than others. In the section below, we’ve outlined three things you need to consider when you’re searching for your next business idea.
Make sure the time is right
Business, in many respects, is all about timing. A good idea may always be a good idea, but it can only be a money-making idea if it’s launched at the right time.
Perhaps the most obvious example of this concept is Myspace. When it launched in 2003, the idea of social media was merely in its infancy. Although the site took inspiration from the likes of Friendster, it was the first site to connect people’s profiles in a meaningful way.
By 2007, the site had 300 million users and was valued at $12bn. However, in 2011, it was bought by Specific Media for a mere $35m. Now, there are many reasons why Myspace took such a monumental nosedive, but one of the most significant is timing.
Yes, the site redefined (or defined) social media, but it was too early to the party. For evidence of this, you only have to look at Facebook. Essentially taking what Myspace started and improving it, Facebook struck the right chord at the right time and may soon become a $1 trillion business.
Just as timing is important, trends also play into this dynamic of knowing what’s hot and what’s not. In fact, what’s interesting about trends is that it often throws up industries and ideas that you may not have thought about. For example, if you look at the stats, lottery sales in the UK topped £7.6bn in 2016. According to National Lottery operator Camelot, that figure represents a £317m (4%) increase.
Off the back of this rise in popularity, online lotteries have become popular. Combined with the ongoing trend for greater access and diversity via online technology, the online lottery industry has flourished. Indeed, at recent start-up Lottoland, players can now jump on the bandwagon and bet on lotteries from around the world.
By accepting wagers on draws instead of offering direct buy-ins, sites such as this make it possible for a player to play a variety of games. Without the recent rise in popularity of lotteries, innovations such as this wouldn’t have occurred and businesses wouldn’t have prospered.
Make sure there’s money in the market
The final point to consider when you’re sizing up a start-up idea is money. If the market isn’t lucrative or potentially lucrative, you’re always going to struggle. A great example of this at the moment is virtual reality.
According to the International Data Corporation (IDC), virtual reality as an industry will be worth $162bn by 2020. Although other analysts have suggested a different value, all the roads are pointing to significant annual revenue in the near future.
With this being true, it’s little wonder that the number of virtual reality (VR) start-ups is booming at the moment. A Venture Reality Fund report noted that the number of VR companies operating in the market grow by 40% in 2016. From Discovr Labs and its learning-based VR games to Roto VR’s gaming chair, the industry is expanding and diversifying at a rapid rate and it’s all because there’s money in the market.
Now, we’re not suggesting that if you can find a business idea that fits into all of these categories that you’ll become super rich. However, they are some of the fundamental bases you’ll need to cover if you want to start the right business at the right time.