Do you want start a high-growth company that puts it to “the man”? Consider taking on a huge industry that has holes in its current business model. Uber shell-shocked the taxi industry. Netflix flattened the video rental business. Airbnb is creeping in on hotels. Now, it’s your turn. Consider these behemoth dinosaurs.
>> Financial Advisory ($32 billion revenue, 13,000 firms, 180,000 workers)
Helping people plan for their financial future and manage their investments has already been disrupted (Wealthfront, Betterment, Motif Investing), but the vast majority of industry revenue is still generated by charging clients 1 to 3 percent of their investments …every…single…year. Think about it: if you invest $500,000 with an advisor, you’re charged as much as $10,000 per year for their advice. Really? Insane. And the reality is that your “advisor” focuses most of his or her time looking for new clients. Think about it. Learn more in this report from Deloitte.
>> Residential Real Estate Brokerage ($115 billion revenue, 106,600 firms, 690,000 workers)
The book Freakonomics (2010) pointed out that, in order to maximize their profits, real estate agents leave their own houses on the market much longer than their clients’ houses. Surprised? I’m not. Most firms charge 6 percent for each transaction—a lucrative business model—so agents sell your house quickly in order to pocket that commission money. That is also why there are so many regulations and licenses in the industry. Of course, the exclusive “agent-only” database, MLS, helps the industry hang on, but eventually, someone will disrupt in a noticeable way. Keep your eye on London-based Yopa, a startup that is cost-effectively brokering property online.
>> Banking ($684 billion revenue, 5,477 firms, 1.5 million workers)
The number of banks is shrinking due to the cost of regulation, but the real challenge banks have is their enormous cost structures due to legacy systems built in the 1970s, 80s, 90s, and 2000s. Not to mention, many banks own or rent skyscrapers in pricy locations and have old-fashioned brick and mortar branches badly in need of renovation. “Fintech” firms have already started disrupting banks, but their efforts are just the beginning. Live Oak Bank is an example of a new bank with a fresh approach. Using modern technology, it built a bank exclusively for dentists—and has since added new target industries. If you can raise $20 million and create an imaginative business model with conservative lending practices, the sky is the limit.
Shake things up
To get started, I recommend you get a fire in your belly and dig into the great book Business Model Generation in order to figure out your game plan. Happy disrupting!
Sign up to get more great insights directly to your inbox.
As a special bonus, you'll also immediately get access to my inside analysis of what made 172 diverse companies achieve take-off revenue growth.
