Over on answers.onstartups.com today someone posted an interesting question:

what happens when you made a product for an industry that doesn’t exist? i mean it sells, it makes revenue but the industry cannot be defined ?
is this a bad sign or a good sign ?

When you start looking at who is buying or subscribing to your software, you might start asking yourself this same question. Don’t. Because it misses what I think is a key reality of Internet-disrupted economics: What we used to call industries don’t exist anymore.
Once upon a time….
Once upon a time (say 1800 to 1999) when the logic of industrialism defined developed national economies, everyone (except children, “homemakers” and the unemployed) fitted neatly and firmly in very specific categories. You were in the steel industry because you worked for a company that made steel. You lived in a city, a small town, a suburb or in the country. People and businesses tended to fit in well defined categories that made mass production, mass consumption, mass education, mass culture possible, feasible and desirable. People who didn’t fit the mold were labeled as “bohemians” or “hippies”. Businesses that were neither fish nor fowl – like supermarkets that sold hot coffees or snow tires were thought to be a best “odd” and soon went bankrupt.
But a funny thing happened to all this standardization: it went post-industrial. Almost overnight the rules of the game changed. Cheap to the point of free global communications, computing power equal to everything NASA had to get to the moon can now be found in any mobile phone, and first a generation that did not like being categorized and boxed and now a new generation that looks at standardization and says, “what’s the point?”
This is not a kumbaya moment.
This is not a kumbaya moment brought on by the rise of the internet where we will all join hands, that is those of us who haven’t already got an iPhone glued to one hand. Brave new world = brave new problems and lots of them. Nor am I’m suggesting that there are no more well-defined lines between different industries – just that more and more companies and people happily jaywalk across those lines – and you should too if you want your startup to succeed.
Two statistics I happily swiped from this excellent post sums up the situation:

  • For decades the norm would be that 9 out of 10 new businesses (that means you) would fail in their first few years. Now, at least in the U.S., 74% succeed.
  • The number of zero-employee businesses (that’s you again) rose from about 15 million to over 21 million between 1997 and 2006.

Looking at internet-disrupted industries as the monoliths they once were, or hunting for your One True Market are approaches that hurt rather than help your business. They are maps that no longer reflect the reality of what’s happening out there.
Don’t draw within the lines. It doesn’t work.
Startups and their less-respected but much more numerous siblings microISVs succeed best when they disrupt the most. Want your startup to crater or your microISV to fail? Just do what someone else has already done.
Want to succeed? Profile what your customers have in common, regardless of “industry” or “market” and find more people with the same problems and circumstances. You don’t sell to an industry or market – those are just convenient, and increasingly misleading – labels. You sell to people. Understand how your product or startup will help them in an increasingly de-massified world and your odds of success will improve.

1 Comment

  1. It’s really tempting though to put yourself into an industry. For those of us not yet launched it makes it easier to think of who you will market to and how you’ll market.
    Completely agree with you, just don’t know what you do when the people aren’t there yet.

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