How to identify opportunities in seemingly mature sectors

How to identify opportunities in seemingly mature sectors

You wake up, make coffee, and wait for the toast to pop up from the toaster. You pour the coffee into your favorite cup, add milk and sugar. The toast pops up, you place it on the plate, and you start your day. Every day we repeat this routine without asking ourselves if there is a more efficient way to have breakfast.

Something similar happens in companies. After years of operating the same way, questioning the status quo can be difficult, but that doesn't mean it's impossible to discover new opportunities in seemingly mature sectors.

Why is it important to shake things up once in a while?

It's easy to think your company will continue to operate the same way forever, but you can't ignore the fact that customer needs, technology, and the competitive environment are constantly evolving. Changes are happening faster and faster: we have seen how AI threatens certain jobs, how electric vehicles surpass traditional ones, and how the consumption of entertainment has changed forever. Startups continuously emerge to meet the needs that others have left behind. Embracing these changes not only ensures a company's survival but also allows capitalizing on opportunities that arise from the new context.

How to identify an opportunity

First, you need to understand what an opportunity might look like and where to find it. Innovating doesn't just imply new products or functionalities; it can also come from distribution channels, business models, or cost structures.

Understanding your business in depth is key to discovering opportunities. This may seem obvious, but it's not always simple. Challenge ingrained assumptions about how your business works: How does your company make money? What competitive advantages have you developed? What do your customers really pay for? Do you meet all their needs, or do they have to complement them elsewhere? These questions will help you break down your business and discover hidden opportunities.

Looking for opportunities

There are many places to look, but let's focus on three main areas: Product, Business Model, and within the company itself.

Product
When looking for product innovation, you must always think about customers and users. Trying to create new functionalities without considering the user is destined to fail. Talk to your customers, understand how they use your product, observe your competition, and discover what’s missing in your value proposition. You can gather this information through usage data, surveys, focus groups, or individual interviews. Remember that customers will always want more for less money, so understanding their real motivations is key to innovating correctly.

Business Model
Your company has been successful in generating value and optimizing processes. But now what? You can stay in your comfort zone or move forward and seek disruptive improvements. Customers evolve, so distribution channels might change dramatically as well. People used to go to bookstores until someone decided to sell books online. You used to take taxis until someone wondered if there were other ways to meet the same need. Questions as simple as "why pay for annual insurance if I only use the car three days a week?" gave rise to "Pay as You Drive" insurance. Deeply question the ingrained assumptions in your business model to innovate in how you sell, whom you partner with, and how customers perceive your business.

Within your company
Your internal assets and experience can also be a great source of innovation. No one knows better than you the competitive advantages you have built over time. The knowledge you have about customers, competitors, and partners is a goldmine for innovation. When you understand your advantages, it's easier to extrapolate them to new activities. For example, if you deliver thousands of meals and have accumulated valuable information about culinary preferences, why not advise restaurants on their menu?

The tricky part is recognizing what unmet needs you can address using your assets. Define what innovation means for your company and set clear medium- and long-term priorities. Then ask yourself how to use your advantages to meet new customer needs. Once underway, you will be innovating not for the sake of innovating, but aligned with your strategic vision.

Easy to say, but how to get started?

Although easy to propose in an article, internally it can be complex. Companies are often so immersed in daily operations that they forget to stop and think about innovation. Having an external partner for innovation is key to overcoming these challenges. While it requires effort and perhaps an initial leap of faith, it's worth having an external perspective.

At Byld, we have been helping companies in various sectors navigate the turbulent waters of innovation for over five years. This has allowed us to deeply understand different industries and develop our own competitive advantages. We know that lessons from one sector can be adapted to another with slight adjustments. Our team has experience in moving from imagining the future to building business plans for new initiatives, thereby reducing the risk of launching new projects.

We will probably continue making coffee and toast the same way every morning. But I am confident that more and more companies will look for new ways to do business, take risks, and embrace innovation. At first, it may be scary, but it's worth shaking things up. You might discover a great source of innovation closer than you think.