A small business is an amazing way to serve and leave an impact on the world in which you live. Small businesses are the backbone of any economy. Most people start their exodus into entrepreneurship by analyzing the market to see what is out there. They then do one of two things – they either look for gaps they can fill with new ideas or they look at old businesses and find ways to improve them. Both are valid starting points, but I would propose that there is a better starting point. Instead of looking outwards, look inwards. Find what makes you unhappy, anxious, and frustrated – and then find a way to alleviate these maladies.
Jeff Bezos says you should start with the customer and work backward. You need to understand the needs and desires of the user and ensure that your product or service meets that. Many entrepreneurs start with the product or service and then work to deliver that to the market. Recall the scene in Cinderella when the ugly sisters are trying to force the glass slipper onto their fat feet. That business strategy is not going to cut it in the 21st century. You need to spend time profiling your potential customers and you need to be ultra-specific. What better place to start than the person you have known your entire life – YOURSELF.
You need to dig deep and be honest about what pisses you off, what frustrates you, what causes anxiety. You only need to look back at great businesses to understand the needs they were solving. Facebook was founded on the need for companionship and social connection – the fact that it has morphed into something exponentially larger is beside the point. Uber, Lyft, Didi, and Bolt come out of the frustration of finding a safe, clean, and reliable taxi at 3 am after a bender with your mates. Tinder is deeply embedded in our fear of loneliness and the inherent sadness of trying to meet single people in the produce section of your local grocery store. Airbnb was borne out of the desire people have for new and unique experiences that avoided having to check-in at the lobby, the inconvenience of being accosted by a handful of bellboys trying to grab your luggage (which may or may not be filled with your fetish gear) and being ripped off for a bag of peanuts from the minibar. You get the idea.
Many great businesses were set up to address basic human needs and inadequacies. All human beings are neurotic. We all experience feelings such as anxiety, worry, fear, anger, frustration, envy, jealousy, guilt, depression, and loneliness. You want to find ways in which you can monetize solutions to these modern maladies. The bigger and more original the problem you are trying to fix, the more successful you are going to be. To get you started, here are some examples.
1) Modern Education Sucks
You may have young kids and their education may keep you up at night. Is school teaching them the skills they need to be happy and successful later in life? The current global education system is in a state of crisis. More than 617 million children and adolescents are not achieving minimum proficiency levels (MPLs) in reading and mathematics, according to new estimates from the UNESCO Institute for Statistics (UIS).
Education methods have not evolved in over 100 years when schools were created as receptacles of information. How is it possible that kids, the most curious and creative creatures around, find school boring?
Teaching techniques have not changed in a hundred years. The teacher stands in front of the class in his tweed jacket and Clark Kent styles classes and recites the five reasons why World War I was started. This may have been the best way to teach 30 years ago when schools and universities were the repositories of information, but now we have the internet. If there is anything you want to find out, you can find it on the World Wide Web. Kids do not need to be taught things. They need to be taught how to find these things and left to study at their own pace.
To make money in the education space, you want to do the following. Firstly, you want to find innovative ways to incorporate technology into the classroom – such as augmented and virtual reality. Secondly, you need to realize that a one-size-fits-all approach does not work. Not all the kids are on the same level. You need to find a way in which kids in the same class can learn at their own pace. Thirdly, you need to flip the classroom – learn at home and do homework at school. This will go a long way to allow kids to learn at their own pace. Finally, you should look at project-based education and practical fields trips – this will help to bridge that massive gap between theory and practice.
2) Everyone Hates their Bank
No one loves their bank. In a world where people tattoo brands like Harley Davidson, Netflix, and Apple, why is it that there are no bank logos on body parts? If banks launch a new product, do people call up their friends, raise a posse of disciples with camping chairs and a basket of sandwiches, and camp overnight outside the branch waiting desperately for it to open so they can storm in and fondle the new service? Do people sneak out of the office early on a Friday, head straight home, storm through the front door, and log into their bank accounts so that they can binge-watch the educational video on internet banking? Do people spend hundreds of dollars on hipster leather biker jackets with their bank logos emblazoned on their backs? I think not because banking is as enjoyable as sucking on Gandhi's dusty thong.
The Millennial Disruption Index reports 71% of millennials would rather go to the dentist than listen to what banks tell them. That is a monumental kick in the nuts for the banks. Millennials would rather lie flat on their backs, open their mouths, and have sharp needles and drills perforate the soft vulnerable skin tissue around their teeth than interact with their banks. Banks suck and technology is going to drive many of them out of business.
Finding what is broken in the finance industry is not difficult. Make a list of all the things that piss you off about your bank, stockbroker, pension company, insurance company, and financial services company. Then find companies that are working tirelessly to solve these pain points, or start your own company that will focus on filling these gaps.
3) We are Killing the Planet
The thought of a dying planet may be a source of extreme worry to you. The sight of old commuter busses belching black smoke into the air as you drive to work may put you in a bad mood for the rest of the day. Over the past 10 years, we have made great strides towards the incorporation of renewable energy into the mainstream. Solar panels are getting cheaper, battery technology is improving, and power emissions are expected to peak in 2027. This means that the solution is in plain sight and you are able to monetize the salvation of the planet.
The move towards renewable energy is happening in parallel with energy deregulation. In the past, energy was provided by large state-owned utility monopolies. They controlled the whole energy process from transmission to distribution and consumers had no option other than being on the grid. There was some government oversight that insured that these monopolies did not gouge the eyes out of the poor defenseless consumer. Maximum prices and tariffs were set and environmental standards were laid down. This meant that the health and profitability of these utilities were essentially set by the government.
Then, in the 1980s, airlines, railroads, and telecommunications started to be deregulated in the U.S. The results were overwhelmingly positive so the government decided to replicate this same model in the energy sector. The U.S. started to allow independent energy providers into the system, forcing the utilities to buy their output. By the mid-1990s, deregulation laws required utilities to sell their plants to these independents, which then created a retail market for energy suppliers. This deregulation is starting to happen globally.
One way to make money from the move to renewable energy is by leasing your land or building a solar plant. It is simple and straightforward. You do not need to have a huge amount of technical expertise or capital.
4) Retail Revolt
The only things that I hate more than shopping are root canal and slow internet. I, however, come from a family where the women are obsessed with shopping. In the weeks leading up to Christmas, I would drop them off at the mall at 10 am and when I offerred to pick them up at 6 pm they look at me as if you have taken leave of all my senses. Eight hours is not nearly enough time to do all that they need to do.
For me, shopping is a military operation. You get a plan of the shopping mall. You then look at the weather to forecast the potential foot traffic in the mall. Rain means a higher than usual flow. If the flow is expected to be high, you investigate the opening hours. You then find the parking entrance closest to the store – find the closest parking spot, secure the perimeter and then make a full-scale assault on the store. You need to limit civilian casualties but if someone has to be sacrificed, that is the cost of war. You locate and then liberate the merchandise, pay with cash (credit card delays are too much of a risk), and then head for the exits. The entire operation is done within the 15-minute parking tolerance and you are out in the clear. Door to door you are looking at 30 minutes tops – you are back in the man cave watching rugby and drinking beer before the wife has chosen the pumps she is going to wear for the day.
In retail, the trends are clear. Firstly, the move to online. Physical stores are under pressure as people migrate online. Amazon is the greatest thing since the 30-minute guaranteed pie delivery at Dominos. It has irrevocably changed the life of the simple man and to you, Mr. Bezos, we are all eternally grateful. Even shopaholics are welcoming e-commerce with arms wide open. They go to the store, find what they want and then go online to find the best deal. Secondly, the move to second hand and rental. By 2028, 13 percent of the clothes in women's closets are likely to be secondhand, up from 6 percent in 2018 according to ThredUp. The secondhand market, which includes resale, thrift, and donations, has grown 21 times faster than the retail apparel market between 2016 and 2018, to a $28 billion industry in 2018. It is projected to be $51 billion by 2023.
5) We Own Too Much Shit
I get stressed out by too much clutter. The bottom line is that we own too much shit and we need to declutter. One way to do this is through minimalism which has become easier with the sharing economy. Forbes says that the sharing economy blows up the industrial model of companies owning and people consuming. The world's concept of ownership and usage is changing. There has always been a great debate of rent versus own. Within the rental camp, there are now two subcamps – exclusive rental and shared rental. The shared economy falls within this second subcamp and makes for a compelling argument. Most people cannot tell the difference between an asset and a liability. The definition of an asset and liability is very simple. An asset puts money in your pocket while a liability takes cash out of your pocket. You want to get rid of those liabilities that you believe are assets – such as houses, cars, offices to name three. Tech companies have already jumped onto this opportunity with companies like Airbnb, Uber, and WeWork. Maybe you have a spare room you can rent out, or you can create a co-working facility downtown. You can tap into the anxiety that people have of long-term commitment to things. This helps to solve the essential need for many to declutter and simplify their lives.
The future is uncertain. We do not know what is going to happen in five or ten years. For many, the desire to start their own business burns strongly within. Technology is forcing redundant workers and job market entrants into a corner where the only option is to start a business. Instead of entrepreneurship being an option for future generations, it may become mandatory. Many great businesses were set out to solve basic human unhappiness. Entrepreneurs refer to this as a pain point. The bigger and more original the problem you are trying to fix, the more successful you are going to be. Find that personal pain point and find ways to monetize the solution.
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