Let’s talk about a utilities business.

The US Department of Labor Statistics just released an incredibly interesting report that studies business’ survival rates by business type from 2013-2023. (View the report here). Here’s a direct quote summarizing the report: 

Ok, let’s deconstruct this starting with the first half: 

“... agriculture, forestry, fishing, and hunting industry had the highest survival rate (50.5 percent still in business in 2023), followed by utilities (45.7 percent) and manufacturing (43.6 percent)”. 

Now think about that, how many posts on LinkedIn have you heard someone say “I’m excited to kickstart my utilities company.”?

But, let’s expand on that logic; if no one is thinking about it, no one is doing it; meaning there’s less competition in the space. 

Furthermore, if the execution of said company is difficult, any limited competition that might be in the space is going to succumb to pressure. 

One quick Google search on how to start a utilities company leads to a downpour of regulatory requirements, intensive capital requirements, and operational difficulties.

So, yeah, if you raise 50 million dollars and go through the regulatory process to form a utilities company in rural Idaho, you have a pretty high chance of success. But, importantly, let’s talk about the back half of that quote from the report.

Other industries with low 10-year survival rates were information (29.1 percent) and wholesale trade (32.1 percent).

That’s us! Information!

Now, do not be deterred by this statistic. Think about what it takes to start a tech company. If you know how to code, maybe 50 bucks and a computer. There’s (generally) less regulatory requirements, no required licenses, no geographical limitations, etc.

So, honestly, a 29% survival rate isn’t all what it seems.

However, there are some key things that can be implemented in the ideation phase that can improve these odds.

Let’s talk about the first type of tech business: overlooked.

We love when we’re dealing with an overlooked solution. Perhaps the best example of this is our logistics clients.

In logistics, everything is decentralized, trucking companies are running off of scattered systems built decades ago, a good portion of the industry is still running off of pen and paper, and yet; the entire country comes to a complete standstill if there’s a supply chain issue.

Furthermore, it’s an extremely specialized industry, even understanding what to build in logistics typically requires years of experience with exposure to various sides of the supply chain.

It took us 3 years of working with multiple logistics clients to get a hold of the terminology and practices. But there’s a ridiculous amount of opportunity. Still, and I want to emphasize this, realizing the potential of the industry requires a fundamental understanding of the business.

No clearer is this point emphasized then a release by Gartner:

So, I know I just threw a lot of info at you, but let’s compile this into an executable.

You can make the general claim that formulating a niche idea in an industry that you understand can instantly increase the viability of your business. 

How to approach building a niche solution.

Well, with a niched idea you typically want to be a bit more solution oriented.

With a problem in a niched business, the solution itself is going to be a lot harder to develop and the fact that the application functions as expected is going to be the biggest draw.

I’m sure you have used university software before or banking software before and the design has just looked terrible. And, I know I’ve done this, you think, wow why don’t they just change this?

But oftentimes, the system works, and it was hard to build, so who would care about the design, as long as it works.

We’ve dealt with this before with difficult integrations.

We would spend hundreds of hours just trying to get the data to flow consistently into our clients’ system.

It was euphoric when it passed all tests and ran smoothly for a month. And at that point like, sure, we’re going to put a decent design on top of it, but we’re not going to open up another hundred hours of design work. The system works! Slap a nice design on top of it and rev up that sales pipeline!

However, not everyone has worked in ball bearing manufacturing for three generations. I mean Uber was started, don’t quote me on this, I think because the founders were annoyed that they were waiting for a taxi?

Let’s talk about another route: difficult to execute.

Generally, apps that are not niched and target a wide range of consumers, oftentimes, are anchored by marketing.

Interestingly, the solution itself is not that complex, especially in the early stages of the business.

Think about Facebook; at its start, Facebook allowed people to upload pictures of themselves, view other peoples profiles, and interact with them. Technically speaking, nothing crazy.

But it was the marketing that made it explode: targeting universities, only allowing access via invites, the design and branding. 

Similarly, I just saw a recent podcast with the founder of Bumble, a dating app, in which Whitney Wolfe Herd explained she targeted sororities with merchandise and college campuses with flyers.

I would really recommend looking into both of these stories as they outline the alternative marketing methods utilized.

Regardless, this all means these ideas are difficult to execute because they, fundamentally, are common ideas and simple solutions. At the end of the day, for success, you’re going to need savvy marketing.

How to build a generalized application.

When we’re dealing with a generalized application, we hyper focus on your branding and marketing features. We’re not marketing experts, we do know some, but we’re pretty up front about your exposure.

It’s a conversation we have a lot, essentially, look, it's peanuts for us to build your app, but the leverage here is going to be your branding and marketability. We typically then bring up incorporating a lot of share-ability into your application. I’ll elaborate.

For example, let’s say you're making a review website for restaurants that aims to allow for natural and conversational reviews unlike Google and Yelp reviews.

Nothing crazy on our end, we’ll plug into the Google API, or Yelp API to get a list of restaurants, make a sleek design and allow people to sign up and leave reviews - cool. 

However, let’s talk about share-ability here. Remember the entirety of your application is going to be based on people basically saying “Yea those Google reviews are super sanitized - take a look at this app that’s more natural.” 

Ok, so let’s definitely incorporate a share button that allows users to copy a link and share it via their social media, for example.

But, let’s go deeper, at its core what do people want and what do you need to do to make it more valuable than searching a review up on Google? 

Well, there’s a bunch of things, first you need to break your user’s habit of searching for a review on Google. To use your app, they first need to know about it, use it, and then trust it and then come to the conclusion that it’s better than Google reviews. 

Accessibility comes into play here, that restaurant search needs to be quick and accurate. Design comes into play here, you need to emphasize the conversational nature of your application; maybe taking inspiration from a design like Reddit. Download links and ease of use will also play a key role.

I can go on all day long, but, that’s your leverage, marketing focused features on the technical side and savvy marketing on the business side. 

We can help with the first part, the second part comes down to you, what you’ve seen, who you’ve talked to, and what feedback you get. 

Tying all of this together, you’re typically going to be facing basically one of two hardships: it’s either going to be hard to implement and develop a solution for, or it’s going to be hard to compete.

We always like to understand the landscape of what we’re trying to build and like to offer insight where we can. We cover a lot of this in our discovery phase and throughout our process.

If you would like to discuss your specific idea or tech needs more in depth, let’s talk! Set up a discovery call today.

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