Getting a new venture off the ground takes business savvy and the ability to serve a demand in the marketplace,but timing and trends also play a role. Businesses that know where the market is going can tap that momentum of growing industries and position themselves for tremendous growth. If you’re an aspiring entrepreneur in search of a sector, check this list of seven that are ascendant right now.
Custom-made products and services
“Custom-made” has had a huge comeback, now aided by technology that helps shoppers order customized products online. Warby Parker, an eyeglass provider, was one of the first to make a splash in this area in 2010, but the industry has since exploded with services that send shoppers personalized packages of clothing, accessories or other items.
“Electronic shopping and mail order houses” took the top rank in a 2014 year-end list of best industries to start a business, according to data analysis company Sageworks. Supplying products directly to the consumer lets startups avoid inventory costs and helps keep prices competitive. Starting a company like this requires a firm grasp of target markets and supply lines, with the addition of interactive websites that users can tap to craft their perfect order. To gain an advantage in this area, think about the services or products that are likely to be in great demand in the coming years. How are consumers and businesses getting these now? Can you improve upon that by inserting yourself into the process? Then, develop ideas that create convenience or promote unique services.
Controlling objects via the Internet — a concept known as the Internet of Things (IoT) — is an industry unto itself. Some sensor-based initiatives, like self-driving cars, require advanced technical prowess and significant capital investment, but other IoT innovations simply bring new efficiencies to old practices. For instance, the Dutch startup Sparked implants sensors in cows’ ears to let farmers track their movement, and the smartphone-controlled Aros Smart Air Conditioner lets users remotely operate their window units and can be set to “learn” from their schedules and preferences so it automatically adjusts temperatures.
A 2015 report from tech services company Accenture predicts that the Internet of Things will contribute $14.2 trillion to the world economy by 2030. If you’ve got an idea for how a sensor could make life better, take it to an invention lab like Proto Labs, Shapeways or Quirky for help developing your prototype.
The “sharing economy” lets people lend their possessions, skills or time to those who can use them. Airbnb’s website allows homeowners to charge strangers to stay at their homes, for example; Uber and Lyft apps link drivers with people who need a ride. These services are now global players, but a second wave of the sharing economy is now building momentum. New sharing websites and apps offer more personalized, targeted services, such as EatWith, which pairs travelers with dinner parties hosted by local chefs, or StudyTree, which pairs university students with peers who can tutor them.
A 2015 report from PwC shows momentum for this sector: 86 percent of consumers said these services made life more affordable, and 83 percent said that they were convenient and efficient. More niche services are popping up to capitalize on that enthusiasm, and entrepreneurs in this area will succeed if they have a firm grasp on legal issues relating to their services, as well as a strong vetting process to ensure that users are getting high-quality goods and services.
America’s aging population, plus advances in video technology and monitoring and diagnostic tools, are driving a huge boom in medical services that are delivered through the Internet or the phone. This tech makes it easier to have a “doctor’s visit” without setting foot in a doctor’s office, or to see a specialist located a thousand miles away. IBISWorld projects a growth of nearly 50 percent in telehealth services this year, up from revenues of $585 million in 2014. The health care industry is hungry for innovative startups to find ways to get blood pressure meters, pulse oximeters, medical software and more into the field. Get in touch with university technology transfer offices — groups that are dedicated to finding useful, accessible applications for new tech — for opportunities. Digital health startup supporters such as AthenaHealth’s More Disruption Please initiative and StartupHealth also provide support for entrants in this field.
Brick-and-mortar services like cleaning, landscaping and pest control landed in the top 10 industries for starting a business in 2015, according to Sageworks. Fast-growing companies in this space seek to deliver their services in a new way, such as by providing a high-tech solution, marketing to new populations, or promoting environmental consciousness or other pluses. For example, Alterra, named by an industry magazine as the fastest-growing U.S. pest-control company in 2015, cites a mission statement that promotes a culture of innovation and states a commitment to environmental and social consciousness.
The best way to start in the industry is to get some experience working for an existing business first to get a feel for the industry, then branch out from there. Look for a unique position if you choose to put a stake in an established industry. Define your core value and then market your company with an emphasis on this.
More U.S. workers are striking out on their own: Independent contractors and freelancers grew 12 percent over the past five years, according to a 2015 report from contractor support services provider MBO Partners. As those numbers continue to tick upward, both employers and contractors have to navigate the changing nature of employment. Both sides need help scheduling work, navigating legal and tax requirements, and connecting with each other. A host of services have sprung up already — such as Intuit’s self-employed version of its QuickBooks software, freelance marketplaces such as Elance, and legal help sites such as Docracy or LawGuru — but there is still plenty of room for new ideas on how to solve common problems.
To develop a new business that addresses employers’ or employees’ pain points, get to know them. Conduct interviews and research to find out what problems aren’t being solved fast enough for the new workforce, and narrow your focus by keeping your research to a single growing industry or type of worker.
Healthy lifestyle products and services
Many startups are finding ways to distribute health products and allow shoppers to buy a la carte exercise services, making them more affordable and convenient in the process. Thrive Market, for example, lets shoppers who pay a membership fee order healthy foods and other products at a discount. ClassPass is a membership program where users can pick and choose exercise classes at a variety of different local gyms. It may be wise to piggyback off an existing health trend — such as the current love of high-end juices, matcha tea, or the produce-share services called Community Supported Agriculture (CSA) — to blaze a new trail that eliminates some of the hurdles current users face. CSAs are much beloved, for instance, but users are often overloaded with vegetables they don’t know what to do with; some people may want to try out the health benefits of foreign goods such as matcha, but they may be unable to access the material itself. Research the marketplace to understand shoppers’ needs, and angle your business to meet those needs.
An understanding of marketplace fundamentals and the creation of innovative products will lay a solid business foundation, but riding the momentum of a high-demand trend can add fuel to a young company’s growth. Research each trend’s trajectory and study how it would fit with your target market. The right idea, the right place and the right time will all contribute to a company’s success.Print this article