Leapfrog into butter ∞

When contemplating the birth of a new business the burning question on your mind should be:

“Am I planning to enter a growing or a dying market?”

Brad Rosser in ‘Better Stronger Faster’

It is easier to make money in a market that is large and growing than in a market that is stagnant, declining or small.

When starting a new business you want to maneuver all the advantage you can get. You know there is going to be challenging times ahead – but as far as possible you want to stack the deck in your favor.

But not all markets are equal!

One exciting and vibrant market is Information Technology (IT). Gartner predicts that $3 540 billion will be spent worldwide on IT during 2016.

IT is poised to move to the center of business focus in 2016, as digital transformation becomes a top strategic priority. 2016 is shaping up to be the year of IT as a change agent!

Within this market there are even more vibrant and emerging segments.

The best of the best

Gartner predicted that in 2015 there would have been a higher than anticipated switch to cloud-based services as the model for delivering software. Cloud-based services are services made available to users on demand via the Internet such as Dropbox, Google apps, Skype and Kotive.

Heading into 2016, cloud computing shows no signs of slowing down, as tech leaders indicate that spending and new cloud initiatives remain on the upswing.

Computerworld forecasts that in 2016…

Software-as-a-Service (SaaS) forms part of cloud-based services. SaaS allows organizations to access software typically on a month-to-month subscription basis. Users only need an Internet connection to access SaaS and therefore people can work on any device, from anywhere and at any time (refer to the BYOD phenomenon). The software is hosted remotely and consequently organizations no longer need to invest in additional hardware.

Forrester forecasts that the global SaaS revenue would reach US$ 106 billion in 2016 with a 20+% growth in both 2015 and 2016.

This trend is not a new one and it is set to gain momentum in the future.

Gartner states that in 2000, 95% of enterprise resources were spent on traditional perpetual software licensing. By 2020 only 21% will be spent on licenses while SaaS will have taken up most of the difference.

SaaS is eating traditional software!

(A related read from 2011 is Marc Andreessen’s “Why Software Is Eating The World”)

You now have an idea of the big picture. Our belief, that we want to explain in this post, is that you can leapfrog into this vibrant market. You can identify a new business within this growing market and hugely improve your chance of success.

What do you need to build a successful business in this market?

Firstly, you don’t need:

• Up-front capital
• Technical knowledge
• Programming knowledge
• Technical team
• Physical infrastructure – office, warehouse, factory, etc.

What you do need:

• Determination (A never-say-die attitude)
• Discipline
• Energy
• Common sense
• A device to connect to the Internet and
• You need to identify a business opportunity.

Identifying a new business opportunity – that others often miss – is and has always been one of the differentiators of a true entrepreneur.

There is no blueprint or recipe you can follow to spot a new business opportunity but there are a few guidelines that can help.

To spot an opportunity you have to be “outside”. You have to know what is going on around you and in the world. You have to be curious about the world.

We would like to propose a few areas within the lucrative SaaS market that you can start to be curious about and to explore.

Shadow business processes

The first area is Business Process Management and more specifically, the “shadow business processes”. Shadow business processes are those processes and practices that are usually not supported by, or even on the radar of, companies’ IT departments.

Shadow business processes include:

1. Solutions developed on an adhoc basis rather than as part of a formal project to find a generic solution to the whole enterprise. E.g. the corporate responsibility team of a big corporation makes use of volunteers to bring about certain events. They would need a volunteer management solution but for the rest of the corporation this would be irrelevant and therefor IT would not place as high a priority on it.

2. Informal processes on departmental or team level that are supported by spreadsheets, emails, etc. These informal processes are often unique to the way the group works and IT cannot support such diversity within an organization. E.g. customer satisfaction survey, request for leave or even requesting IT support.

3. Temporary processes. E.g. the organization hosts an international workshop and needs to manage registration of attendees.

4. The need for a rapid solution. E.g. the sales team wants to start evaluating their customers’ satisfaction levels immediately so that they can include the results in their annual performance report.

What is going on in the world of shadow business processes?

Gartner predicts the following for shadow business processes:

What we are saying is that all the indications are there – there is a massive need for agile and relatively inexpensive SaaS solutions within the corporate world.

Start by looking around for shadow business processes in the companies and organizations you have contact with. The eager mind will surely find them.

An important fact to remember is that SaaS makes it easier for business units within a large company to become a potential customer as they can, within limits, determine their own technology spending rather than going through the CIO (Chief Information Officer) or IT department. It is on the level of department, work group or teams, that you will find shadow business processes.

Non-technology industries

A second area you can start to be curious about and to explore for new SaaS related business opportunities is non-technology industries.

It sounds as BIG as all outdoors and yes, it might just be. We know that such immensity is good for motivation but it does not really help to find a real-life opportunity. But the truth is that the possibilities are HUGE. A few recent case studies might help you to understand this opportunity area better:

Airbnb – is a web-based service for people to list, discover and book unique accommodations around the world. It has over 25 million guests, 800,000 listings, in 34,000 cities and 190 countries. They have revolutionized the accommodation industry.

Uber – develops, markets and operates the app-based transportation network. They have drastically changed the taxi industry by seamlessly connecting rides to drivers in hundreds of cities through their apps.

What are the future expectations in non-technology industries? The International Data Corporation (IDC) predicts that the third platform – mobile computing, social media, cloud computing, and big data – will disrupt and revolutionize these non-technology industries.

Other examples of technology solutions to non-tech industries are solutions for:

• Billing for garden services.
• Helping a bike repair small-business stay on top of all the bicycles coming in for repairs.
• Manage the manufacturing process of a woodwork factory - from when a customer first places the order online, through manufacturing up to receipt of final payment.
• Managing the personal fitness training process: from requesting a trainer through to the booking of training sessions.
• Property maintenance that helps tenants log maintenance issues and optimize the administrative task of managing the repair process.

It is now paramount that we explain why we believe that technical and programming knowledge and a technical team are not prerequisites for starting a business within this market segment.

In order to do this, we want to take a step back and tell you a little about the history of Kotive.

Prior to starting Kotive we ran a company that created custom digital software solutions for our clients. We knew that our business was positioned within a very lucrative market. What however frustrated us was that we had to re-program the same components repeatedly albeit for different clients and different applications. Even more frustrating was that it took way too long to develop everything from scratch. We needed a tool to help us build these solutions much quicker and to stop inventing the wheel over-and-over again.

Kotive is the third iteration of our tool that we now make available to other Makers. It is a meta-app with which you build workflow apps, without doing any programming! Kotive is a tool in the hand of any Maker, regardless if you can program or have a technical team.

Is this a get-rich-quick scheme?

In conclusion, we have made this elaborate case that with little up-front investment and in a surprisingly short amount of time you can tap into the revenues of one of the most exciting and growing global markets.

However, this post, “Leapfrog into butter”, is not about a get-rich-quick scheme.

Yes, you can definitely get rich. And yes, even sooner than you may think. If you define “being rich” as when your monthly residual income equals your monthly cost of living, then you can absolutely get rich quick!

But it is not a get-rich-quick scheme for one important reason namely; the success of this strategy depends on your ability to identify a new business opportunity and to create an innovative solution. The tools are available but the genius and willpower remains with you, the Maker.

The idea is to take an existing workflow solution, or create your own solution based on your insights, and market/sell this solution to a specific market, e.g. garden services or event organizers. These kinds of businesses have real challenges that can effectively be addressed by technology. The problem is however that many of them do not know that there are tech solution to their everyday frustrations and/or they do not know where to begin to search for such solutions. Compounding this challenge for them is that they are often “reluctant” to consider using technology, believing it might be out of their reach.

All of this makes it possible for you to start a business, if:

• you can find problems and design solutions to their real life needs,
• introduce these solutions to the market and
• gently assists them in implementing it.

They would love you for this and will gladly pay for it!

  <a href="https://www.kotive.com/blog/leapfrog-into-butter/#infographic">
    <img src="https://www.kotive.com/img/blog/leapfrog-into-butter-500.png" alt="Give your new business the best possible start by entering a growing market" width="300" height="935" border="0"/>
  </a><br/>
  <a href="https://www.kotive.com/blog/leapfrog-into-butter/">Leapfrog into butter</a> by 
  <a href="https://www.kotive.com">Kotive</a>