How to Make Money in Tech
Quick, what's the first universal rule of success in a startup?
Answer: Find a market gap screaming for satisfaction and make people happy for a price they (and you) can live with.
Satisfying customers when their needs have been ignored offers some great benefits:
- They value what you have to offer.
- They're generally willing to pay for what they want because they can't easily get it another way.
- You have little to no competition.
If only finding a real market gap that is largely unexploited was easy. Even modern civilization can seem long in the tooth. Even relatively new things such as cell phones, airline travel, and television are entrenched after decades of of existence.
But don't give up, especially if you're in high tech. Technologies that help solve all sorts of problems that people faced can sometimes create a whole new series of challenges that the public never realized that it would have. Find those gaps and you could be on the way to massive success.
For example, consider password keepers or vaults. Every time there is a large security breach at a site like LinkedIn or eHarmony, consumers are told that they need to have better passwords that are longer, more random, and generally impossible for the non-Rainman set to remember. A password vault puts all of your passwords under encrypted storage. You only need remember one password to get to them all.
I've mentioned of a couple of these--LastPass and RoboForm--before. The point this time isn't to improve your online security (though that's usually a good idea). Instead, think of the respective companies behind the products. They saw a market need and responded early enough that they were able to develop an offering before there was too much competition.
A newer example is Rbutr.com, a site and application that uses crowd sourcing to match articles online that present one point of view with others that take a different opinion or offer facts to challenge the original articles.
Talk about a brilliant idea. For the millions of people who don't want to buy one party line or another, whether the topic is politics, religion, or technology, being able to critically read what they find online is a difficulty. Rbutr goes right to the heart of the issue and lets those who are interested in finding a balance of information work with and support each other.
Not that finding a market gap or exploiting it is easy or a smooth road. Here are some suggestions to make the process a little smoother:
Look at what annoys you.
You're not just in business; you're also a consumer. What bothers you? Where could you use a little more convenience because products and services forgot some important step? Chances are others feel the same way.
Keep an ear to the ground.
Maybe some of the best possible problems to fix aren't ones that bother you, and that's OK. But listen to other people whose complaints overheard on a train, read on an online forum, or aired anywhere else might give you the clue you need.
Just how bad is that annoyance?
It's fine to find ways to make life easier, but remember that there must be enough irritation to make people willing to pay for a solution.
Who's the specific market?
Just as some things may not bother you, they may not bother significant portions of the population. They don't have to so long as a large enough block of folks are irritated and willing to spend the money. Try to find what they have in common so you can identify other prospects.
Finding the right prospective market gap isn't enough either. You still need to find an elegant answer, learn how to reach the right people, develop a monetization model, and market like mad. But getting the market gap puts all the rest into perspective.
ERIK SHERMAN | Columnist
Erik Sherman's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.