Starting your own company in a time of unprecedented change seems daunting but, in the business world, change means opportunity – to find it you just need to know where to look.
Changing technology constantly opens new doors for business and slams old ones shut. If you’re considering starting a business, you need to understand the latest trends. What are the potential new developments and disruptions, and what do they mean?
What is disruption, and how do you spot it?
Kate Eriksson, who leads Disruption for PricewaterhouseCoopers’ The Experience Centre, the professional service firm’s digital services accelerator, explains disruption in three easy steps:
1) A new way of doing things becomes possible. A glaring example is the music industry where artists who previously sold music on CDs through record stores now sell online.
2) Someone gets cut out of the process aka “disintermediation”. In the music industry, a record company is no longer required for an artist to publish or sell work.
3) The new way is scalable and able to grow. When iTunes, Apple’s online music platform, became accessible to music fans everywhere, disruption was complete.
Before starting a business, it’s important to recognise the hotspots where disruption is likely to happen and what its effects may be. Even better is to be in control of that disruption by identifying opportunities before they exist, says Eriksson.
These five business trends are thought-starters for wannabe entrepreneurs.
Trends to watch in 2016:
1. The rise of the sharing economy
Uber, Airbnb, goCatch, Divvy… All are trailblazing examples of successful businesses that have embraced the notion of the ‘sharing economy’ or collaborative consumption. This is an ecosystem built around the sharing of spare human and physical resources.
As long as you have excess capacity and a technology platform, alongside broad demand for a service, you have a recipe for success in the sharing economy.
Now that we have an abundance of things, we are less concerned about the materialistic nature of having or owning something exclusively, Eriksson says.
“People are now more interested in experiences than assets. So you can share your house, car, bicycle, even your dog when you go on holiday.”
People considering starting their own business or working in a business should think about their business, or the company they work for: what do you really need to own and what could be shared. “Is there an overlap, or a match?” asks Eriksson.
2. The power of the crowd
It used to be only big business that was able to exploit the power of people, to bring thousands together behind a brand or a cause. These days, anyone can do it.
Platforms such as VentureCrowd, Chuffed, OzCrowd and Pozible help connect businesses with interested individuals to get support for new ventures.
Why is this important? Just because somebody says ‘no’ in a traditional context – the bank won’t lend you money or the real estate agent won’t rent you any space – it no longer means you can’t kick off a new venture or have to end an existing one, Eriksson says. “Brands launching on Kickstarter are good examples of this.”
US crowdfunding platform Kickstarter helped Rob Thomas, creator of the Veronica Mars TV series, raise more than US$5 million to breathe life back into his characters with a Veronica Mars movie. The creators of one of the first smart watches, Pebble, a precursor to the Apple watch, also raised a cool US$10 million the same way, only to land US$20+ million for a more sophisticated version earlier this year.
“It is said that the difference between who you are and who you want to be, is what you do,” notes Eriksson. “Crowdsourcing allows busy people who are passionate about something to do something about it, by donating or helping out some other way.”
3. Robots and other digital helpers
It is predicted that 40 per cent of businesses will use drones for various purposes within the next five years. Already, the Civil Aviation Safety Authority (CASA) in Australia has drawn up regulations around their commercial use, and those controlling the drones must be licensed.
Driverless vehicles and ‘robo advice’ – automated advice that determines, then executes, a specific course of action – are further examples that the future already is upon us.
“This is interesting not necessarily because of what it does but because of what it means,” she says. “For example, what do driverless cars mean for insurers, and for public transport? What do drones mean for privacy? What is the knock-on effect of these technologies? That is often where you will find the business opportunity.”
4. The internet of things
Smartphones, web-connected lighting, movement sensors… Individuals typically own an average of 12 devices capable of communicating. These are the ‘things’ in what’s known as the ‘internet of things’.
“These things gather and can communicate a mass of data that can be aggregated with other data sets to give a more holistic picture of something,” says Eriksson. With that ‘big data’ in hand, a range of possibilities can be programmed.
“[The data] might reveal that a vending machine is empty, or the fridge just stopped working, or an elderly person has not moved in their house today.” This technology will affect a wide range of industries and areas such as safety, motoring, health and retail.
Right now, such technology can be an effective way for businesses to reduce high-cost, poor-value tasks, such as ones that involve a staff member driving around to various locations to check on things.
“Cost seems to be the main driver for this at the moment. How do you stop manual processes and create new value out of the way that you coordinate and arrange your devices?” Eriksson says.
5. Wearables for health and fitness
Wearables and fitness trackers are in a range of information-packed devices now, including smartphones and watches. They count our steps, check our heart rate and monitor our blood sugar and oxygen levels.
Eriksson says wearables are the focus of a study being conducted in Australian corporate offices to explore the link between mental wellbeing and physical health.
“This will help to predict something potentially dire before it happens, such as depression or a heart attack,” Eriksson says. “It can help us with self-management around how we are feeling and performing.”
Wearables might also tell you if you get too hot during a workout, if your elderly uncle has wandered away from home or help relieve pain by sending messages to the brain. Exploration of their potential has only just begun.
How to identify a game-changing startup opportunity
Two things are important when you’re considering new developments in business, Eriksson says.
First, act locally but think globally. In other words, if you are developing a solution for an issue your grandmother is facing, or a problem her aged care facility is having, then also consider that this same problem might be faced by elderly people around the world. Work on your idea and perfect it, always with the awareness that you may be able to scale it into a far bigger business.
Secondly, but perhaps most important, is to follow your passion.
"The best examples of inspiring successes are ones where people care a lot about what they are going to design or create or build or solve,” she says.
“These people don't set out to disrupt, they set out to succeed because they care so deeply about their idea that they are always going to get around whatever is put in their way. Passion creates a significantly greater chance of success.”
Want to take your business acumen to the next level? Check out our guide to careers in business.
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