This post originally appeared on Entrepreneur.com - #Growing Your Business
Entrepreneurs should be on the lookout for these massive market opportunities.
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Before Amazon, people purchased almost everything in person at a brick-and-mortar store. And while consumers still like to go shopping offline, 76 percent of adults in the U.S. now also consistently make online purchases, according to a recent poll conducted by Marist College and NPR. As Amazon’s customers discovered the undeniable convenience and ease of purchasing books online, it disrupted the entire retail experience.
Today, Amazon is the most successful company on the planet, with a net worth that’s inching eerily close to a trillion dollars, and consumers all around the globe expect to find the products they love with a quick Google search — not just from Amazon, either, but from all of their favorite brands. Retailers that don’t sell products online are now at a serious disadvantage.
But that’s just one example of a startup that made massive ripples in its industry because it did something new and exciting during a time that was ideal for disruption. How do you know when your market is ripe for disruption? Here are five undeniable signs.
Related: Disruption vs. Innovation
1. Consumers don’t trust the current system.
Since the rise of Facebook, social media users have been giving away their data to advertisers entirely for free. And that’s how practically every social media site now operates — the user is the product and the advertiser is the customer. The problem is, social media users don’t actually like that — a whopping 66 percent of Facebook users said they don’t trust the site with their data, according to a Huff Post/YouGov survey.
Right on cue, startups like Ello and 23snaps are exploiting that distrust and working to create new social media platforms that meet user demand for data protection. Both Ello and 23snaps refuse to sell their user’s data to third-party advertisers. And since most social media users don’t trust the way Facebook and other big platforms handle their data, it’s only a matter of time until users opt for social media platforms they do trust and ditch the ones they don’t.
Don’t get it twisted though: Consumer mistrust doesn’t stop at social media. Advanced tech like facial recognition, AI, politics and even housing are all targets and have experienced recent levels of disruption. Tri Nguyen, founder and CEO of Network Capital Funding, has seen the writing on the wall for decades in the housing market, which has served as a classic example of consumers uneasy about an ambiguous, non-transparent system. Nguyen’s company has flipped the industry upside down by taking a different approach like providing quality loan advice, automating the process and eliminating lender fees to streamline decision making.
2. New technological innovations remain unutilized.
For a long time, big cable companies held the reins on television broadcasting and entertainment. And as with most companies that have nearly monopolized an industry, they let it get to their heads. For decades now, we’ve had the technology necessary to create streaming services like Netflix, Hulu and Amazon Prime Video, and to their own demise, cable companies turned a blind eye to those useful innovations. Data from eMarketer shows a continual, annual decline of about 3 percent in cable subscribers, and that percentage is accelerating.
Meanwhile (also according to eMarketer’s data), 192 million people stream via YouTube, 147 million acess Netflix and 88 million watch Amazon Prime Video every single month. Nothing reeks of industry disruption quite like big businesses refusing to adapt to technological advancements.
Also consider short-term rental property management, an industry booming with potential. With travelers continuing to turn to short-term rental services like Airbnb, entrepreneurs are scrambling to build property-management companies that support this trend. And in 2015, a whopping 88 percent of property-management companies increased their rental rates, according to Rent.com. For the most part, those entrepreneurs have had to build their businesses without the technology and software that support so many other industries. But now, tools like Guesty — a platform with features that streamline and automate operational tasks that accompany short-term rental management — allow property-management companies to communicate with guests, manage and update listings, automate to-dos and process payments all in a single dashboard and mobile app. Sometimes, building a successful business is simply a matter of doing what’s already possible in an industry where no one has done it yet.
3. The product or services aren’t affordable for the general population.
All of business history is riddled with instances of savvy entrepreneurs and their startups delivering the crown jewels to the general population — that is, creating a way for middle-class citizens to buy something that was otherwise very expensive and out-of-reach.
Think of building a beautiful website. Years ago, you’d only be able to accomplish that by hiring a designer and paying them thousands of dollars. Now, using WordPress, Squarespace or one the many other web-builder platforms, anybody can create one for $100 or less.
Or how about creating and managing an investment portfolio? Not long ago, to invest in stocks and make your money work for you, you’d have to hire an expensive accountant and cross your fingers that they’d steer your hard-earned cash in the right direction. Now, with the use of apps like Acorns, anyone can add pocket change to their investment portfolio with the click of a few buttons.
The point is, if a product or service is out of reach for the everyday consumer, then the industry is just waiting to be disrupted (high-end restaurants, plane tickets and day-care expenses are a few additional examples of industries that might currently fit the bill).
4. Inconvenience is at an all-time high.
Convenience has a lot of sway over people’s buying decisions. If the consumer can get great food delivered rather than go out to eat on a night when they’re tired, then they’re likely going to do just that. If they can buy products by pulling out their phones and ordering online rather than going to a store, then they’re going to take the easy road more often than not for one simple reason: It’s convenient. This is probably why Steve Jobs famously said, “You have to start with the customer experience and work backward to the technology.” And since technology moves as fast as it does, it’s relatively easy for industries to digress into inconvenient but familiar processes.
Only recently, for example, has the banking industry caught up with technological innovations and embraced tools allowing for greater speed and processing times for its customers. The companies at the forefront of that innovation (the disruptors, if you will) are also the companies that grow the fastest and become the most successful. In banking, JP Morgan Chase and Bank of America took first and second place for being the most technologically advanced banks in America, as ranked in research by UndercoverRecruiter. Unsurprisingly, those two banks are also the nation’s most lucrative, with over $2 trillion in total assets each.