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Now that we‘ve talked about that crucial element of entrepreneurship, the IDEA, we‘re going to take a step back and consider some current trends in the business world. The reason we‘re doing this is that you should start tweaking your idea right away – and reflecting your idea against current trends might help you do just that.
There are a lot of new trends out there. The clever entrepreneur will spot the opportunities in these new trends and find ways to exploit them. New trends, technologies and norms are born every day and part of what it takes to be a successful entrepreneur is to keep your finger on the pulse. Stay alert and stay curious. Keep your eye on the news, both the traditional media such as newspapers and television, but also less traditional platforms such as blogs and social media.
I‘m going to talk about a few of the current emerging trends, but remember that there are others and there are new ones every day.
The first trend is simpler business models. Think about a traditional book store that requires a building and an extensive inventory of books to be able to offer a good selection. The traditional book store has a lot of fixed costs, such as rent and/or property taxes, and any books not sold end up generating no revenue while creating real costs. To succeed a traditional book store has to cater to a broad range of customers. This means that niche customers – who in the case of books are customers interested in esoteric topics – are not served well.
Now contrast this with an online book store, such as Amazon. Amazon does not need buildings for shops and Amazon does not need to stock any inventory to ensure good selection. When a customer orders a book, Amazon ships it from a fulfillment center or – when it‘s a niche book – might actually print a copy for the customer. And don‘t forget the customers who order their book as an e-book to be read on a digital device. For them, Amazon doesn‘t need to handle or ship anything. It just sends the content electronically. Amazon can serve a very broad range of customers, but Amazon can also serve tiny niches of customers interested in esoteric topics. In it‘s operations Amazon collects a huge amount of data about it‘s customers and these data can be used to make suggestions to individual customers as well as to spot industry trends. We‘ll revisit the topic of this kind of „big data“ later in the course. As an aside, it‘s fun to mention that Amazon has now opened a physical book store in Seattle – so things are coming full circle!
The possibility of simpler business models, particularly those that reduce or eliminate the need for large starting investments, create interesting opportunities for entrepreneurs. How could you exploit this idea and come up with a simple business model?
The second trend is outsourcing, which means transferring work to where it can be conducted better, faster and/or cheaper. You will probably think of something like call centers in India when you hear about outsourcing. Outsourcing a call center for a US company to India makes good economic sense because salaries are lower in India than in the US while quality is equal.
Another form of outsourcing involves getting a hard-to-find expert to undertake a defined task. As an entrepreneur you can think about outsourcing both to reduce costs and to obtain specialist knowledge you might need.
Another form of outsourcing involves outsourcing tasks to machines. Advances in artificial intelligence and robotics make it increasingly feasible to get machines to do things it used to take humans to do.
How could you exploit this trend to outsourcing?
Related to both simpler business models and outsourcing is the third trend commonly called the „sharing economy“. Referring to it as the sharing economy is actually a misnomer, because there really isn‘t any sharing going on, but we won‘t let that throw us off course since this is the term commonly used. Businesses in the sharing economy exploit resources and infrastructure that are there anyway, rather than building new ones. AirBnB exploits rooms and apartments that are empty anyway rather than building or buying hotels or apartment buildings. Uber exploits cars and drivers that are available anyway rather than buying or leasing cars and hiring drivers. Yes, there is a good deal of controversy around both AirBnB and Uber, and some of it is well founded – particularly around the personal data collected about where people stay and where they go. Another source of „big data“. But actually much of the controversy is driven by the hotels and taxi companies that stand to lose the most from these unanticipated competitors. How could you exploit the sharing economy trend?
The fourth trend is globalization. It‘s an increasingly smaller world. Globalization means that you‘re not competing to be better at whatever you do with the person or company down the street; instead you are competing with seven and a half billion people around the world. That‘s scary, but the bright side is that with increased globalization the market for whatever you offer as an entrepreneur has become much, much larger than your neighborhood, city or country. How could you exploit the trend of globalization?
A related trend is the emergence of micro-multinationals. Opportunities that were only within the reach of large businesses 10 years ago are now available to small start-ups.
For example:
Small companies have access to highly talented employees or contract workers anywhere in the world, so you are not limited by the talent pool available in your neighborhood.
There are advanced software solutions sold as services, for example accounting software, so you don‘t need huge investments in legacy systems.
Cloud data storage and processing could eleminate your need to invest in and operate computer servers.
Anyone can create a web site that is indistinguishable from a „big firm‘s“ web site
You can access sophisticated logistics, such as through Amazon, and payment processing, such as through PayPal
How could you create a micro-multinational?
The sixth and final trend we‘re going to talk about is print-on-demand. Print-on-demand means if your product can be printed in some fashion, you don‘t need to manufacture it yourself and you don‘t need to keep it in stock. This is revolutionary. Many entrepreneurs have had to abandon their cool ideas for new products for lack of funding to build manufacturing facilities or because manufacturing large quantities to stock was too risky and expensive.
Here‘s how print-on-demand works. Let‘s say a photographer has taken a bunch of really cool photos of lighthouses. She believes these photos could be made into a book that people would want to buy. She downloads a piece of software from one of the many print-on-demand providers out there, for example Blurb, and sets up her book. When the book is ready, she lists the book on the service provider‘s e-commerce site or on a site such as Amazon. When someone orders her book, the print-on-demand provider prints it.
Print-on-demand started out being primarily for books, and initially it was just for text. But things have progressed a great deal. It‘s not just text or photos printed on paper any more. You can now find print-on-demand services for printing onto fabric, for example T-shirts. Threadless is a good example.
And where it really gets interesting is 3-dimensional printing, or 3D printing. Additive manufacturing technology (which is what the technology for 3D printing is called) is advancing rapidly, so although current 3D printers are slow and expensive, they will soon become fast and affordable. As an entrepreneur, you could invest in a 3D printer and 3D print your products as needed to meet demand, and there is a growing number of 3D printing service providers, so you wouldn‘t even need to have your own equipment and worry about keeping up-to-date with the latest technology. How could you exploit the print-on-demand trend?
As an entrepreneur you need to stay ever on alert for new and emerging trends because in one of these trends might lie your big opportunity.
Guy Kawasaki suggests a useful thought exercise when faced with new trends. Ask yourself „therefore, what?“
For example:
“Everyone will have a smartphone with a camera and Internet access.”
Therefore, what?
“They will be able to take pictures and share them.”
Therefore, what?
“We should create an app that lets people upload their photos, rate the photos of others, and post comments.”
And, voila, there’s Instagram.

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