A startup is only as good as the market it can exploit.
If it moves into an area that has either already been disrupted or that isn't ready for disruption, then the chances are that it will fail. For instance, a startup that tries to create a product that only slightly differs from another is likely to fail, while one that creates an entirely new approach to an everyday problem has a much greater chance of success. Equally, a startup that can establish itself as a leader in a new market has an even greater chance of success, as it won't need to fight against the tide of previous successes.
There are always opportunities for startups, and as we move further into 2016, we believe that the following 4 opportunities may be areas ripe for firms in the next year.
3D printing, despite seeming like it has been on the cusp of big things for the last decade, looks like it is genuinely ripe for the picking today. With the price of even the most cutting edge equipment decreasing, innovative companies have the opportunity to dominate the space. Given the relative remote aspects of the process, it also means that it does not require considerable investment in space to launch, removing a significant barrier to entry that other industries have found.
The process is also increasing in speed, accuracy, and efficiency, meaning that jobs that would have either been too complicated or time consuming can now be done much faster. For instance, Ford has begun to use 3D printing when designing new cars or car parts. The reasoning behind this is:
'With traditional methods, an engineer would create a computer model of an intake manifold – the most complicated engine part – and wait about four months for one prototype at a cost of $500,000. With 3D printing, Ford can print the same part in four days, including multiple iterations and with no tooling limits – at a cost of $3,000.'
With this kind of potential, there are numerous opportunities for startups to become market leaders in the field. There are already stories of bankers and lawyers leaving high salary roles to start 3D printing businesses.
Markets have predicted that the wearable technology market will be worth $31.27 billion by 2020, meaning that the industry is set for average yearly growth of 17.4%. This kind of growth will not come purely from existing companies, as innovative startups have already shown that they can have a huge impact on the marketplace.
Pebble, one of the first smartwatches and a Kickstarter success story have sold over 400,00 units, which is 16% of the total number of Apple Watches sold. Bearing in mind that Apple is close to a trillion dollar company and Pebble needed to get crowd funding to build their watch, this is an impressive figure.
One of the key reasons for this is that nobody has got the wearable market right yet. Apple, famous for their design and user focus couldn't crack it and it means that there may be a startup out there who can.
Virtual reality is another industry that has a considerable amount of hype surrounding it, with the next 12 months likely to see it hitting the mainstream. With the Oculus Rift, Sony PlayStation VR, Microsoft HoloLens and HTC Vive Pre (amongst others) being released this year, it offers startups a unique opportunity.
The market for VR headsets is heating up, with some of the biggest players in electronics all trying to outdo each other on the quality and price of the headsets. What few are doing is looking at the opportunities that VR may have in terms of content created. Here startups have the opportunity to create the kind of content that people want to buy for their new headsets.
In much the same way that a small Scottish Company, Rockstar, released Grand Theft Auto in 1997, by 2013 had the biggest selling game in history. The VR space is equally ripe for this kind of startup led innovation and 2016 looks like being the year that this begins in earnest.
Manufacturing For The Masses
Much like Uber democratized transport and AirBnB democratized accommodation, the manufacturing space is prime for this kind of work. Think about how Alibaba has come to dominate the way that manufacturers and clients communicate, but on a far more personalized level. This could link back to the potential for 3D printing, but will be more about the platforms that can be created to help build this relationship.
The struggles that China is currently facing mean that, whereas sending manufacturing requests there would have been a standard approach before, today companies may look at local manufacturers to decrease time to delivery and decrease any carbon footprint. It can go further than this though, with manufacturers potentially able to create something completely unique for an individual through new techniques and technologies. Where a custom product would have cost considerably more a few years ago, today this is not necessarily the case, yet few companies have done anything to exploit this gap in the market.