The Problem With Disrupting An Industry As A Startup

Every startup and new business carries dreams of disrupting an industry and becoming a unicorn. And they’ll jump into any new industry that comes up with the goal of turning it onto its head. 

Take AI and Chat GPT as an example. We are now seeing a spate of businesses launching in this industry, all hoping to get to the top. How many of them are actually serving a purpose and solving a real problem?

Then there is the issue of startup survival. Disruption takes resources, and the issue is that 9/10 of them will never make it that far.

Disrupting an industry is a lofty but unrealistic goal. Here’s why:

Why You Shouldn’t Disrupt An Industry

Disrupting an industry can be a risky business strategy because it involves challenging established players and upsetting the status quo. This can be particularly challenging if the industry is dominated by powerful incumbents who have strong market positions, established brands, and large customer bases.

To disrupt an industry, a company typically needs to introduce innovative products or services that are significantly better, cheaper, or more convenient than what's currently available in the market. However, this can be difficult to achieve, as it often requires substantial investment in research and development, marketing, and distribution, which can be costly and time-consuming.

For a startup with limited resources, this can be difficult to achieve and put undue pressure on the development team. 

On the other hand, you could consider finding an existing industry to serve. Let’s see why this may be a better move below:

Serving Existing Industries

Rather than reinventing the wheel, there is the option to find an existing industry to serve.

But why is this the right move for startups?

The answer is that an existing industry has an established market with a set of customers and well-defined needs.

Startups can leverage this existing market to validate their product or service and refine their business model.

In addition to being a defined market with defined needs, an existing industry often has established distribution channels that can be leveraged by startups to reach customers quickly and cost-effectively. This saves them the cost of having to be the first-to-market but allows them to be a fast-follower instead.

Ultimately, by serving an existing industry, startups can reduce market risk as they are entering a market that has already been proven to have demand for the product or service they offer. This greatly reduces the risk of failure for these startups and increases their options such as the ability to get acquired. 

Serving an existing industry can also provide startups with an opportunity to learn from established players in the industry, including best practices, industry trends, and potential pitfalls to avoid.

How Startups Fail In The First Year

Most startups run out of runway in either their first or fifth year. Running out of steam is common because startups typically rely on limited resources and team experience to deliver a product or service. 

There are several reasons why many startups fail in their first year, as we all know.

One of the main reasons is the lack of market demand for their product or service. Many startups fail to validate their business idea and assumptions before investing time and money, resulting in creating products that do not meet the needs of their target audience. Take the sudden spike of AI and Chat GPT businesses as an example.

Another reason is poor financial management, including inadequate funding, improper budgeting, and inability to generate revenue. Accepting venture capital can come with its own pitfalls and keep startups to tight timelines and deliverables.

Bootstrapping doesn’t come without its own problems either. 

Bootstrapping a startup means starting and growing a business without external funding, relying on personal savings and revenue generated from the business itself to fund operations and growth. While bootstrapping can have its advantages, such as greater control over the business and avoiding the pressures and obligations of external investors, it can also put a lot of pressure on entrepreneurs.

Take the scale of growth as an example. With limited resources, bootstrapped startups may experience slow growth, which can be frustrating and make it harder to compete with well-funded competitors. Founders may have to take on multiple roles and responsibilities to keep the business running which can have a high risk of burnout. 

Startups may also struggle with team dynamics and lack of experience, as they may be led by inexperienced entrepreneurs or a team that lacks the necessary skills to execute their business plan. Team belonging and culture are key to how well your team will perform in the long run. 

What Are The Advantages Of Serving An Existing Industry As A Startup?

Sure, it’s more exciting to jump into ground zero of a new industry and be the first company people think of. At the same time, the chances of that happening are incredibly rare. Very few startups are successful right out the gate, and the level of difficulty just goes up if you’re working in untested waters. 

While working in an existing industry is not the sexiest solution, it carries many benefits for the startup. 

An existing industry has an established market with a set of customers and well-defined needs. Startups can leverage this existing market to validate their product or service and refine their business model. This means by serving an existing industry, startups can reduce market risk as they are entering a market that has already been proven to have demand for the product or service they offer.

But just because you aren’t introducing a brand new concept in a new industry does not mean you won’t get to serve the right type of consumers. Startups can differentiate themselves from existing players in the industry by offering a unique value proposition, innovative product, or superior customer experience. 

Think about traditional industries, how inefficient and paper-heavy they are, and how your startup could be a solution, for example. 

As for funding, serving an existing industry can also make it easier for startups to attract external funding as investors are more likely to invest in businesses that are serving a market with proven demand.

Serving An Industry With Staff Augmentation

Staff augmentation is a process of adding skilled professionals to an existing team to increase capacity, efficiency, and productivity. Startups can use staff augmentation to better serve their industries in several ways.

To start with, startups can augment their existing team with professionals who possess specialized skills that are not available in-house, such as data analytics, software development, or digital marketing. This allows startups to quickly scale their team up or down as needed, without the long-term commitment of hiring full-time employees.

But most exciting is the prospect of getting to market faster. Staff augmentation can help startups accelerate their time to market by bringing in skilled professionals who can help execute projects more quickly and efficiently.

Do you need to deliver results to meet your objectives? Do you also want to remove any headaches from managing the deliverables? There are many different reasons to use augmentation for your business - but all are covered by our detailed project planning and reliable quality engineering to deliver your product without the hassle.

You do not have time to recruit and interview. You need someone immediately to help you grow. We can start within two weeks (with only one signature). 

Contact us to augment your technological staff today!