“Demand Triggers” prove elusive in emerging businesses — at least for me

19Aug09

Those who have been following this blog since I fired myself from the lawyer training biz to seek out my next big thing may recall that my expectation was that, by following the conversations in a handful of industries undergoing transformational change, I would spot a high-impact problem I could solve (in the parlance of my former business, a Demand Trigger) and that would form the basis of a new venture.

I still believe that’s true, however, after absorbing information through a firehose since June, I’m reminded of some wisdom repeatedly offered by my friend, Mike Shetzer, who raises capital for some truly unusual stuff: “Whatever it is, it will take twice as long and cost twice as much as the entrepreneur projects.”  Right again, Mike S.

It seems that demand-triggering problems are easier to spot in mature business categories, perhaps because more of the conversation is centered on problems, whereas in emerging industries the conversations seem more frequently to be about opportunities, milestones, etc.  Why, you may ask, would conversations about opportunities not be exactly what I’m looking for?  IMHO, if people have already found the opportunity, I’m inherently trailing the play. I realize that I might recognize a way to improve someone’s approach to their opportunity, but it’s been my experience that, until a strategy or tactic proves itself deficient, there is limited appetite to challenge it.

Now, it may simply be that I’ve not yet figured out how to leverage “opportunity” conversations as well as I know how to do so with “problem” conversations, and I may have to learn how to break out of an old thought pattern to get out of my own way.

So, I guess it’s back to crowd-sourcing.  (With a nod to Blanche DuBois, I’ve always been comfortable depending on the kindness of strangers.)

Here is a short (certainly not exhaustive) list of industries that I perceive as undergoing fundamental change:

  • Healthcare
  • Education
  • Construction
  • Automotive
  • Media, publishing
  • Mobile tech

What do you see as some of the most significant strategic or operational issues/decisions facing these industries?

What information sources would you suggest to help me answer this question for myself?

To whom would you encourage me to speak to progress down this path?

Thank you in advance for your thoughts, suggestions and, where needed, bops upside the head.

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One Response to ““Demand Triggers” prove elusive in emerging businesses — at least for me”

  1. In many cases, it appears that industries undergoing change — and certainly companies undergoing change — forget what they’re solving for. Rather than staying focused on “We help people do X” they focus on “We sell Y because it helps people do X.” When Y is displaced by faster, cheaper Z, companies and industries struggle to adapt because their P&Ls are tied up in Y.

    I have amusing memories of my old employer, which offers legal research to law firms, confronting the Internet in the mid-90s. The official corporate line of “The Internet is a fad” which was a reflexive response to the fact that the company had invested gazillions in its own software and telcom infrastructure, and it couldn’t envision another way of doing business. In actuality, the Internet’s ability to provide ubiquitous access to the research service improved profits immensely, once they recalled they were solving for access (i.e., the more people who have access, the more people will use our service) rather than selling telcom and software.

    In most cases, the companies go too far off the reservation and are really just solving for profit. Now I’m a die-hard capitalist, but I make very different business decisions if I’m solving for generating a profit to please the short-term traders rather than solving for the long-term investor. Most senior CEOs I’ve met and worked for can’t tell you much about their product lines, but they can quote share price to the hour. It begs the question, what are they solving for?

    For the specific industries you mention, I have no particular insights into their challenges, or access to materials that brilliantly summarize the issues. But that’s sort of the point, I suspect even those in the midst of things don’t have good perspective. Are they protecting their widget or their profit stream, or are they solving for helping people do X, even if it means that product Y and all of our infrastructure surrounding product Y is inherently at risk?

    There’s great profit for the company that wishes to be the last provider of Y — the apocryphal buggy whip manufacturer comes to mind. But the last one standing is clearly solving for max profit until it’s over. Companies and industries that wish to evolve and continue to be a going concern should know the difference. In many cases, I suspect they don’t. So the industry periodical that succinctly lays out the problems may be more elusive than you think.


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