How to Check if You’re in the Right Industry

In some cases, no amount of innovativeness or clever marketing strategies can turn your great business ideas to profits if you're in the wrong ind...


In some cases, no amount of innovativeness or clever marketing strategies can turn your great business ideas to profits if you’re in the wrong industry. Several factors must be checked to assess the overall health of your industry and fortunately Inc.com has a comprehensive report on this.

In case you’re like me who’s not really into reading heavy stuff, here’s the shortened version of that article:

The most head-smackingly obvious sign of a strong industry is vibrant and consistent growth in total revenue. What you’re really looking for is an industry that’s growing faster than the general economy.

Other important factors include how much the industry is regulated, whether it is dominated by a handful of extremely large companies, and the steepness of the financial barrier to entry.

In addition to perusing the market research, you want to hit the pavement to gather anecdotal evidence of an industry’s well being and future from trade associations.

“Many new companies are most effectively founded by people who are users, because they have a direct understanding of what’s up,” Von Hippel says. “Watch the activity in the user community and the early pioneer user companies and how rapid the growth is and then jump in.

Another way to measure the health of your industry or the demand for your product is by reaching out to consumers directly.

Rather than tap the crowd of consumers, some companies keep track of hot trends and industries via a network of in-the-know experts. For example, Trendwatching.com (and my blog too!), a London-based consumer trend monitor, has 600 trend watchers in more than 100 countries, with the aim of keeping an eye on opportunities around the world

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