How to identify an opportunity in a seemingly mature industry?

How to identify an opportunity in a seemingly mature industry?
November 27, 2023

You wake up and prepare a fresh pot of coffee while waiting for your toast to come out of the toaster. You pour some coffee into your favorite mug and mix it with milk and sugar. The toast comes out of the toaster and then goes onto your plate. You are ready to start your day. Every single day, with some exciting exceptions, we repeat the same morning routine without questioning if there’s a better, more efficient way to have our breakfast.

The same thing happens with companies. After years of doing business as usual, shaking things up and challenging how things are done can be complicated. 

"But that doesn’t mean it is impossible to identify new opportunities in a seemingly mature industry."

Why is it important to shake things up from time to time?

It is easy to believe that your company will continue to do business as usual in the long run. However, it is impossible to deny that customer needs, technology, and even the competitive landscape are in constant evolution. Change is happening faster than ever, and in almost every aspect of business. We’ve all heard the echoes of AI threatening job security or witnessed the rise of electric vehicles overshadowing traditional fuel cars. We have even changed the way we consume entertainment and never looked back. It’s not uncommon to see new startups emerging solely to address gaps left by established counterparts. Embracing transformation ensures corporations not only their survival in the face of evolving trends but also the identification and capitalization of opportunities that arise from the shifting landscape.

How to identify an opportunity

The first thing we need to do is to understand what an opportunity may look like and where it could be found. It is important to mention that innovation does not only come from a new product or feature. We can find opportunities to innovate in distribution channels, in business models, in our cost structure, and in almost every aspect of our business.

Understanding the ins and outs of your business is crucial to look for opportunities. This, while might sound trivial, may not be as clear cut as it seems. A key point is to challenge assumptions rooted in the way our business operates. How does your business make money? What fair advantages have you developed over time? What are your customers really paying for? Are you solving all of your customers’ needs or do they need to complement your solution elsewhere? These are some of the questions you should be asking while dissecting your business in your search for opportunities.

How does your business make money?

What fair advantages have you developed over time? What are your customers really paying for? Are you solving all of your customers’ needs or do they need to complement your solution elsewhere? These are some of the questions you should be asking while dissecting your business in your search for opportunities.

Searching for opportunities

As said before, there are many places where you could potentially find threads to pull from in your quest for opportunities, but let’s dig into the top 3 where I believe you could find disruptive ideas: Product, Business Model, and inside your own company.

  • Product

When looking for innovation in your product, it is a must to think about your clients and users. Trying to come up with new features and functionalities without thinking outside of your walls, is doomed to failure. 

With this mindset, you must reach out to your customers to understand what they use your products for, how they interact with your product, what your competition is doing to attract them and if there is something your customers are missing from your value proposition. While the last question seems to be the most important one, going only for this answer might lead you to suboptimal decisions. 

There are several ways to collect this feedback. You can gather usage data from your product, launch surveys, run focus groups and do one on one interviews with customers. Regardless of the method you decide to use to collect information, you must bear in mind that customers will always want more for less money. That’s why understanding the motivations behind how they use your products and perceive your company is vital. That’s where you will be able to find clues for innovating in the right direction.

  • Business Model

Your company has been doing a great job generating value for quite some time, the way you do business has been improving and you have optimized the conversion of all your funnels to the maximum of your capabilities. What now? You could run your company as is, trying to stay relevant and afloat in this ever-changing landscape, or you can take a brave step forward and look for ways of improving even further your business even if that means starting all over again in different aspects.

Customers evolve and change, so why wouldn’t it be fair to assume that distribution channels in the near future can be different from the ones you have right now? People used to go to bookshops for their books until a former worker at a hedge fund decided to revolutionize the industry and take it online. 

Not so long ago, if you wanted to move around the city by car, and didn’t own one, you had to hail a taxi, until a computer engineer dropout with some experience launching startups decided that taxis were not the only cars with empty seats in the city capable of fulfilling customers’ needs. Customers’ demands were no different, they needed to get from point A to point B, but the other side of the equation was challenged: is it possible to have a supplier different from taxis for this demand?

Customers’ needs might still be the same as they were, and even the type of company filling this could be the same, but customers might start demanding payment terms they feel to be more fair for them. From a question as simple as “Why should I pay a year-long insurance policy when I only use the car 3 days a week?” new concepts such as “Pay as You Drive” insurance are born.

As seen before, groundbreaking innovation can come from re-thinking assumptions deeply rooted in our business models: the way your customers purchase our products and services, who is willing to be your partner to provide value to your clients, and even how the customer feels about your current business model.

  • Inside your own company

Last but not least, your own company, its assets and expertise could be a valuable source of innovation. No one better than you know what you excel in and what fair advantages you have been building over the years. All the knowledge you have gathered about your client base, competitors and partners is a gold mine for innovation.

"How can you exploit this information to create new opportunities for your company to grow?"

When you get to understand what your fair advantages are, it becomes easier to interpolate it to new activities. These advantages can come from the intellectual property you have been creating throughout the years, an incredible database of clients that allow you to know how they feel and what they need in different moments of their lives, or from an army of rockstar software engineers that you have in our payroll. For example, when you realize that by delivering thousands of meals to your customers you have built an incredible database of likes and dislikes in food, it is not hard to think of being the ones consulting take-out restaurants on what to put on the menu.

The tricky part of finding innovation from your internal assets is to be able to recognize unmet needs aligned with your priorities that you can fulfill. To begin this journey it is worthwhile to start by asking yourselves what innovation means for you and what you want to prioritize in the medium and long term. Not all companies start from the same point, some have already answered these questions and just need to find territories to explore. Others need to take some time to align on these aspects to be ready to advance in the right direction. 

Once your company has a clear vision of where you want to be, the correct question to ask yourselves is: 

"How can we leverage on X to meet customer needs of Y?"

Not an easy one, but once you have the engine started, you can be sure that you will be innovating not for the sake of it, but with your customer and your company’s roadmap in mind.

Easy to say, but how do we get started?

While easy to write it on a blog post, it is evident that doing this internally may be quite difficult. It is not rare that companies are too immersed in their day to day operations that can’t find the time to stop and think about what innovation might look like for them or what part of their business could be done differently. 

Having an external partner for innovation makes a lot of sense for tackling the most common shortcomings in corporate innovation. While it may take some effort and, if this is your company’s first steps in innovation, a leap of faith, the advantages of having a new pair of eyes are totally worth it.

At Byld we have been helping corporations in different industries navigate the turbulent waters of innovation for over five years. This experience allowed us to understand the ins and outs of different sectors ranging from mobility to banking to healthcare. And, following what has been said before, develop our own fair advantages. We are certain that learnings from one industry can be implemented into another one with some tweaks. Our team has experienced, more than once, the journey from imagining what the future looks like to building a business plan for a new venture. This has helped us develop our methodology and streamline our process by lowering the risk of launching new ventures.

It is very likely that we all continue having our coffee and toast in the morning the same way. However, I am confident that managers will start looking more and more at how business could be done differently in their companies, and this will lead to taking more risk and embracing innovation. It might be scary at first, but it is worth it.

Don’t be afraid to shake things up a bit, you might find a great source for innovation closer to home than you think.