When did we become so obsessed with how ‘sexy’ a business venture is? We seem to be in a perpetual state of chasing the next big, exciting, innovative idea that will change the world. Yet while I encourage people to take a chance and build a new business, it’s important to be selective about the industry, and to recognise that innovation of the world-changing variety is incredibly rare.
Don’t be fooled into thinking you must do something new in the glamourous world of tech to make money. Some of the best opportunities can be found in the mundane – those traditional, everyday businesses that people can’t live without. Whether it’s buying a new bed or selling your car, washing your hair in a hotel or unblocking your toilet at home. There is always going to be a need for these services.
While plenty of challengers exist, the key to getting ahead in these industries is to either do it better or do it differently. A great example is Martyn Dawes, who founded Coffee Nation in 1996.
The idea was simple – coffee on the go. Recognising both Britain’s love of coffee and busy lifestyles, Coffee Nation endeavoured to put quality, takeaway coffee in corner shops, petrol stations and grocery stores nationwide. By 2007, there were 600 Coffee Nation kiosks across the UK. In 2008, he sold the business for £23 million. Today, the business has gone on to become Costa Express.
Companies viewed as ‘sexy’ may be worth millions, but the profits in hand are usually far lower than at their less glamorous counterparts, where there’s no requirement to raise millions of pounds in crowdfunding or investment, achieve 50 million app downloads, undergo an IPO or sell your company before you make money.
New business ventures in the digital world are often built around a passing craze – and are therefore far more likely to fail. Just look at MySpace, which died almost overnight in the shadow of Facebook.
Many of those that do make a lasting mark are still built around a traditional idea, just made better with technology or a new process. Uber is just a new way to connect drivers with passengers. Monzo is a modern way of banking. Transferwise has just brought tech to foreign exchange.
A lot of the time, the jury’s still out on whether they’re really worth the hype at all. App-based challenger bank Monzo is nearing a value of £1.5 billion but it saw losses of £33 million last financial year. According to its CEO, the bank’s biggest challenge is that only one in five of its users is currently depositing their salary into their Monzo account. Over in the US, co-working company WeWork was valued at $20 billion earlier this year, but it has signed burdensome leases that require it to pay $18 billion in rent in the coming years.
Running a traditional business may not allow budget for free pizza and beer, nap pods or an onsite masseuse, but at least it’s a viable option. There’s no doubt it would feel sexier to be the CEO of a tech company rather than a plumber, but there will always be a need for someone who can repair boilers and unclog drains and do it well.
Jamie Waller is an entrepreneur and author of Unsexy Business
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