What if the market is not big enough for your solution, does that mean it’s not worth pursuing your vision? Say you did your market research and found that you only have 1000 potential customers in the world, should you quit? If money is your biggest motivator you probably should. And if financing is your only chance of reaching and serving these customers, this should be another reason why you should consider solving different problems since one of the first things investors look for, after evaluating the entrepreneur(s) and validation, is market size and potential. Whether it is a small or big market, it is very important to go by the rule that 10 customers who love you is better than 100 who kind of like you (Paul Graham). 10 people will passionately recommend you to 10 (random number) others who in turn will talk about you to 10 others and the compounding goes on, whereas you know what happens with your 100th Facebook friend with whom you talk once a year.
Lately, I met with many passionate entrepreneurs with different interests and plans. One of the things I was recommended to discuss was the impact of technology based companies on the growth of the market and more specifically industries such as Financial Services, Healthcare, and Real Estate while using some examples of leading tech companies in each one of these industries. This is what I will be sharing with you today.
FinTech is at the intersection of the financial services and technology sectors. Technology based startups in the FinTech segment do not essentially create new product or services but simply innovate the products and services currently provided by the financial services industry. A research by PWC shows that funding of FinTech startups more than doubled in 2015 reaching $12.2 billion up from $5.6 bn in 2014. Many industry experts, according to the survey, believe that part of their businesses is at risk of being lost to standalone FinTech companies. For instance, incumbents believe that 23% of their business could be at risk due the rapid growth of FinTech services. Some of these services include Plaid, OnDeck, Betterment, Acorns, Robinhood and Lending Club.
According to Forbes, Over $2.9 trillion is spent on healthcare annually, with 75% of this spending directly tied to chronic illnesses resulting from preventable behaviors and lifestyle choices. Healthcare remains one of the most progressive industries in the global economy due to the rapid advancement in modern medicine paired with the emergence of wearable technology and mobile apps to monitor personal health and also because of the rise of digital programs to replace traditional health plans. In a 2015 report, PWC project that in 2016, millions of American consumers will have their first video consults, be prescribed their first health apps and use their smartphones as diagnostic tools for the first time. These new experiences will begin to make real the dream of care anywhere, anytime, changing consumer expectations and fueling innovation. In 2013, 16% of consumers said they had at least one health app on their device. Two years later, 32% said they did. The survey also found that millennials, who are enthusiastically embracing wearables and health apps, prefer virtual communication for health interactions. Some of the leading technology startups in this industry include Nutrino (nutrition), DoctorOnDemand, and Health Tap.
According to a research conducted by Properties Online, though real estate agents continue to be a critical component in the home buyer search, buying, and selling process, mobile and web apps represent clients’ first and biggest source of information. For agents, findings show that technology enables this group to stay competitive, respond to clients faster, and save time and money in this order of importance. For instance, agents who invest in technology (web and mobile apps) generate 3 times more leads. Some of the leading technology startups in this industry include VTS, Zillow, Hightower, and Agentdesks.
Creativity and brainstorming are based on acquired knowledge and for this reason, through this article, I attempted to expose you to some market insights and examples of successful technology companies in fields you may be interested in. This, along with the different business and revenue models and a framework for proposing innovative models I shared with you here, should equip you to propose your own solutions for problems you are excited to solve while evaluating the potential of the market you are entering.
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