One of the keys to longevity and relevancy as a business is to stay ahead of the times. Uber didn't stay content with disrupting the taxi industry. They're also steadily moving into the food delivery realm with Uber Eats.
McDonald's with their recent $300 million acquisition of a tech company is further proof that no matter the industry, it's imperative to be forward thinking with your eyes set toward the future.
With this in mind, Spotify is set to buy its third podcast company, Parcast, which specializes in mystery-themes and crime audio content. Spotify's other two companies purchased were Gimlet and Anchor.
Spotify is known as the world's largest and most popular music streaming service. But these moves are an indication that Spotify has its eyes set on a much bigger target: becoming the Netflix of audio.
Spotify has quietly morphed into the world's largest podcast publisher since it has more in-house shows than their competition. Spotify subtly shifting over to podcasts makes complete sense since they would have a new revenue model that is more in their control as opposed to music.
With music, Spotify doesn't have total ownership. Therefore, they have to pay royalties out to the various music labels each time you listen to your favorite artists.
Perhaps your operation isn't as complex or as grand as Spotify. However, there's still a key lesson that is critical to adhere to for your future success.
What segment are you going to own?
When reading this and thinking about it a little more, I couldn't help to think that the business world is becoming more micro-focused.
Even companies such as McDonald's is getting more specific with their strategy by aiming for customized drive-thru menus based on customers previous history. In essence, they're going to own the personalized drive-thru experience (and personalized fast food segment as a whole if we're honest).
While Spotify is the largest streaming service, they still can't take complete ownership of it due to the royalties needing to be handed out.
With the podcast avenue, potential audience development and various brand sponsorships can arise in which Spotify has full control of it. This becomes much more profitable long-term while still staying top of mind for consumers.
How can you adopt what Spotify is doing to not only stay relevant but profitable in the long term?
It first starts with narrowing your focus, especially for early-stage entrepreneurs. Next, what's a possible segment of people that aren't being serviced properly and will only grow in the future?
If you're looking inside the health industry, for example, baby boomers are a prime target. It's a segment that will increase plus will have available funds for the services offered.
Just as Spotify assessed the current market and then forecasted where things are going to stay relevant and competitive in the future, you too can do the same for your particular industry.