The Next Big Entrepreneurial Thing? Look to the Past for the Answer
Recently, Dallas Maverick owner and Shark Tank investor Mark Cuban commented that he sees an impending tech bubble that could be worse than 2000/1's collapse. Now his reason for this potential collapse is based on the assumption that many of today's tech investors are private individuals rather than the deeper pocketed professional investor. Cuban is certain that most of these private investors' investments in tech companies are worth less than what they paid and with a non-existent small tech IPO market they have no way of exiting their investments. But what underlays the bubble is the same problem that created the ideal environment for the last tech meltdown: a blind rush to throw money at any entity that claims to have created the next big "digital thing" without foundation or proof of concept. Regardless of what happens with the fickle trends in the world of tech, entrepreneurial opportunities are still plentiful. But sometimes instead of getting in line with the crowd, it's best to take a different path and look to the past to see your future.
An Answer Seeking a Problem
Entrepreneurial success does not depend on technology, apps, or the latest trends. Creating a successful business starts with a simple premise; identify a need or problem; find a large enough market which needs the solution, and develop a product or service that satisfies the need or solves the problem. Success becomes difficult if we reverse the premise by seeking problems for our answers. This, I find, is the issue with today's entrepreneurial dreamers, who first decide that technology is the answer, because it is "hot" and "buzz worthy" and then must now define, find, or create a problem it will solve.
Now, lest you think I am stuck in the past, a technology resistor, I am a mentor for a tech start-up accelerator organization, and I am witness to some innovative ideas that are based around tech, the cloud, and apps. But I also counsel well meaning "would be" entrepreneurs who are heading for disaster because they are clueless about the most basic requirement of a successful business—it must actually make money. And the only surefire way to make money is when customers buy your product or service, over and over again.
Technology Must Be a Useful Art
Unquestionably, technology is a huge influence on how we do business but at the core there must be a human need fulfilled for a business idea to be viable. My suggestion is to use one of the human needs of sustenance, acceptance, recreation, and domicile as your foundation, and study the historical demand for a product or service that meets these needs. Once you identify the appropriate need in which to build a business, then determine how to utilize technology to make the customer experience superior. And remember this about technology: no matter how digital our world becomes, humans can only process analog signals and still have to eat, drink, and have domicile and personal relationships with family and friends. Let's face it: there are tens of thousands of entrepreneurial opportunities that will satisfy one of those basic needs and are not dependent on an app or technology to be successful.
Beer, Booze, and Grilled Cheese—Everything Old Is New Again
Success with old school ideas and business models is plentiful. In Tampa, Florida, where I live, and in many other cities there has been an explosion of small craft brewers. Beer has been brewed since the fifth millennium BC and therefore would hardly be considered cutting edge technology. Yet entrepreneurs have embraced the risk of taking on the mega-brewers such as Miller and Budweiser not with mobile apps but yeast, hops, grains, and water, and are making a huge impact. We are seeing the same with distilled spirits such as bourbon, vodka, and even good old fashioned moonshine. And the explosion of food trucks on our streets has its lineage with the chuck wagon of the old west and the pushcarts in the city neighborhoods, which served our pre-automobile urban brethren.
Old Cigar Factories and the Proper Use of a Wrecking Ball
As we become more conscience of the impact development has on our green spaces and sensitive lands, it becomes clear that the next big migration will be away from the suburbs and reclamation of the city. New urbanism is an idea as old as the village square, yet presents an opportunity to reclaim blighted city neighborhoods and profit from this growing trend. Scattered around Tampa are the most gorgeous examples of early 20th Century architecture and a symbol of it's glorious past: boarded up cigar factories. Risk-embracing entrepreneurs, with the help of local redevelopment concessions, are transforming these shuttered factories into career college campuses, breweries, and office condos.
My wife and I are building a new home right in the heart of an old neighborhood. While my first choice would be to renovate an old Victorian home, as my parents did when I was growing up, Tampa's options were limited so we tore down a depilated house and replaced it with a new one.
Instantly we have benefited, as has the entire neighborhood, by transforming something that was of little value into an appreciating asset. All around us there are opportunistic entrepreneurs doing the same thing except with multiple properties and building successful businesses.
Somewhere along my journey toward entrepreneurial success, I was told, "When everyone is leaving town, that's when you need to be going to town." While the literal interpretation is actually playing out for me, the underlying meaning is to not follow the crowd like a lemming. Success comes to those courageous enough to find opportunity, independent of trends, which fulfill a historical need or problem. As entrepreneurs, we must resist the temptation to follow the crowd and instead create a different, personal expression of one's entrepreneurship.
Tom Panaggio has enjoyed a 30-year entrepreneurial career as co-founder of two successful direct marketing companies: Direct Mail Express and Response Mail Express. He is the author of The Risk Advantage: Embracing the Entrepreneur's Unexpected Edge.