With so much focus on new technology like artificial intelligence and virtual reality, it can be easy to forget the mundane items that we use every day in our lives hold the promise of lucrative business opportunities.
Startups trying to do something that nobody has seen before often struggle. Take, for example, the company that wanted to deliver pavement by drone. Or, the one that developed earbuds that allowed users to "edit" ambient noise around them. They both failed.
In contrast, many startups that didn't bring crazy new technology to the table--instead, opting to switch up the business models in established and mundane industries--have done quite well.
The new crop of online mattress retailers are one good example. A few years ago, mattresses seemed like one of those things you would naturally have to go into a physical store to purchase. Now, not so much.
According to a recent Financial Times op-ed, online mattress retailer Simba had forecasted in 2016 that it would reach $142.5 million in sales by 2019. Simba founder and CEO James Cox has since amended that expectation to reach over $427 million by next year.
The same article also mentioned clothing company Mahabis, which upgraded the slipper by making the sole detachable. The company had sold nearly a million pairs, retailing for over $100 each. Another mundane household product, razors, has been incredibly lucrative for Dollar Shave Club and Harry's. Similar to the online mattress stores, they simply changed the business model for selling these common products.
Lest you think it's just dull, everyday, household products that are doing well, online services that don't exactly get the blood pumping are also pulling in big profits. Look at free credit scoring and personal finance guidance service ClearScore, which Experian snapped up recently for close to $400 million. It had been in business for only three years.
These "boring" industries are close to my heart because I've done quite well with products that don't exactly get people excited: instant drug testing kits.
Years ago, when online retailing was just getting started, my wife and I saw that the drug testing industry was being underserved with online retailing, so we jumped in. Unless you're talking about major sports, drug testing isn't a headline-grabbing industry to be in---but it's done us well.
It's important for you to know that you don't need to unveil the newest technological marvel to be successful in business. Being in a "boring" industry can be lucrative.
Here are three ways to identify humdrum industries that are ripe for reinvention:
1. You find yourself getting annoyed by an industry.
One of the major complaints about the razor industry was always that they were overpriced, which businesses like Dollar Shave Club and Harry's exploited for their own gain by offering more affordable options. Dollar Shave Club also poked fun in their ads at the difficulty of buying razors from the locked/alarmed razor cases in stores.
If something annoys you about an industry, check around with other people you know and see if they share that same feeling. If it's a common complaint, that's a good sign there must be a better way of doing things. One of the reasons we started our drug test retailing company was because we heard from many employers about how difficult it was for a small business to develop a drug testing plan.
2. The industry hasn't changed in decades.
As Mahibas CEO Ankur Shah has proven, even something like slippers--which don't seem like they could possibly change that much from their basic design--can change enough to pique people's interest.
Major industries grow stagnant and bloated when innovation stops. Change for the sake of change isn't necessarily a path to success, but if you see an opportunity to bring progressive change to a stagnant industry, it could very well lead to success for you.
3. It seems impossible.
Buying mattresses online and having them shipped directly to your door probably seemed impossible right up until someone made it happen. You can say that about a lot of new companies popping up. "Nobody would buy [product or service] that way!" is almost never a true statement. It just means nobody has tried selling it that way yet.
In business, virtually nothing is impossible. You may need to get creative, but changing a well-established industry requires creativity. If an industry hasn't changed in decades, why not be the one to change it?