Is it a requirement to have experience of the industry in which you’re setting up a business? Richard Branson has said ‘Not at all, just create something different’. That’s advice which can apply to almost anyone: if you see an opportunity to improve on the way an industry is run, or to do it better, act on it. That could lead to a transformation of that industry in the way that we’ve seen Uber transform transport, Airbnb change accommodation and a whole industry emerge in the ‘fintech’ environment. The secret to for success? Spot an opportunity, then get stuck into making it a reality.
So, how do you spot that gap? The answer to that is deceptively simple. In your everyday life, you are a customer for tens if not hundreds of service providers and industries. Your customer experiences across these industries is likely to vary widely, from deeply satisfying, easy exchanges where you get what you need with no hassle, to other ones where hoops have to be jumped through to get the desired outcome.
The ‘Eureka’ moment comes when you recognise the ability to do the same thing while taking out those hassle factors.
Not knowing ‘how the industry is supposed to work’ can be a significant advantage. When you arrive with no preconceived ideas, no baggage and no legacy, you’ve got a fresh set of ideas of how things can be done. That unrestricted thinking gives rise to ideas of what may be possible, which can sometimes come as a bit of a surprise to old hands in the industry. Just ask the taxi operators; they would have said ‘no way Uber can work, there’s too much regulation’ – or they would have come up with any one of a number of ‘reasons’ why the concept was dead in the water.
In Electric Kiwi’s case, we recognised that the ‘traditional’ way of retailing electricity left customers with little choice, while there was no differentiation in the service provided. Couple that with the dramatically accelerated availability of consumer technology, on the one hand, and enterprise cloud technology and smart meters on the other, and here was an opportunity to make things better.
It seemed so obvious to an outsider, a customer of a big uncaring electricity company. But for those in the industry, an absence of customer intimacy, for example, was just the way things had always been done. It probably didn’t even occur to them that the customer experience was pretty poor; that absence of innovation and change meant there was an opportunity to use technology to make the process of paying for power cheaper, faster and more convenient.
Of course, having a great idea of how things can be done better is just one part of the puzzle. Just as essential is knowledge of applicable regulations and operating realities in any given industry. It is here that the hard work of turning an idea into reality has to happen. That necessitates creating a team which combines vertical industry knowledge with innovative thinking.
There are fundamentals of business which don’t change by industry. The most important of all is customer experience, which has always been driven by information exchange: you take some information from customers, you store it somewhere, you interact with third party suppliers to create and deliver a value proposition. That’s universal.
What isn’t universal is how the customer experience is created and delivered. By applying Branson’s ‘screw it, let’s do it’ logic (which is also the title of a book by the Virgin founder), it is possible to design a better way, and the industries which can – and are – being changed are unlimited. Old business models are in the firing line and that means opportunities for those with ideas and it means customers can expect better service, more convenience and lower prices. And that’s an exciting prospect for all of us.