Top Dying Industries, and lessons for your startup

http://feefighters.com/blog/the-10-worst-businesses-to-start/

by onik69 • 15 years ago

38 19 15 years ago

feefighters.com

bergie• 15 years ago

You could also argue that a "dying industry" would be an excellent market to enter and do things differently

pitdesi3• 15 years ago

I agree with that statement generally.

One (sort of) case in point is American Apparel. While they are now in deep shit (nearly going to bankruptcy but just got rescued), they were doing pretty well for a few years as a vertically integrated apparel maker, with a factory in downtown LA.

Hard to think of other examples.

seanharper• 15 years ago

I think its debatable whether american apparel did well because they were vertically integrated / located in the US, or in spite of it.

Nucor is another example frequently cited as a company innovating in a shrinking industry. But they have had their share of troubles as well.

mitjak• 15 years ago

Absolutely. There are all sorts of folks looking for clothes made locally and well. I buy American Apparel for both of those reasons.

patrickk• 15 years ago

A noteworthy absentee is banking. In many countries, banks would be dead (investment and retail banks) if not for government intervention. Such a pity that heavy regulation which is designed to prevent fraud and so on, kills off the chance of startups coming in under the radar and destroying the incumbents margins by using technology to outmaneuver them.

E-trade managed to do it for buy and selling stocks, but that's just one slice of the financial services industry. BankSimple are kind of doing it (coming in under the radar) but even they must use external banks to hold customers deposits in. Financial services make around one-third[1] of all US corporate profits. Regulation aside, this is a sector begging for innovation (the kind the makes the industry more efficient, not the kind of "innovation" that creates toxic products that go boom.)

[1] http://blogs.wsj.com/economics/2011/03/25/like-the-phoenix-u...

Slightly older article:

http://www.theatlantic.com/magazine/archive/2009/05/the-quie...

rjb• 15 years ago

I think both bookstores and record stores have a chance to go back to what they once were. Small and independently run, selling things their customers actually want, not everything under the sun.

JonLim2• 15 years ago

Going to disagree about the video postproduction services - there will always be a market for that even though editing tools are becoming cheaper and easier to use.

Why? How many people know how to use Adobe After Effects or Apple Motion and know how to use it well?

Not many!

Video produced by amateurs is a sure fire way to turn people away from your business. I think the demand for this will be just fine.

pitdesi3• 15 years ago

Agreed that there will always be a market for video postproduction (and actually all of the other things on the list too), but it is dying (in terms of revenues), because having a guy who knows how to use After Effects is a lot cheaper than making special effects on film.

JonLim2• 15 years ago

That I can see. However, there still seems to be a lot of admiration for the guys who can pull off special effects in real life over digitally adding them later.

As far as I can tell.

dasil003• 15 years ago

It's certainly an interesting list, but I have to question whether this is anything but preaching to the choir. "Don't ignore technology, innovate, bla bla blah", this is just boilerplate silicon valley talk.

Just because an industry is on the decline doesn't mean there's no opportunity there. Hell would you rather compete in a billion dollar market that used to be 2 billion, or enter a nascent market where you run out of cash before it's even big enough to sustain you? If you want to be the next Google then you'd probably go with the latter, but remember, Google didn't get where they are today by wanting to be the next Google. It wasn't all planned out, they did it by taking advantage of opportunities along the way.

fredBuddemeyer• 15 years ago

i strongly recommend staying away from dying industries; the issue is not so much the size of the market. an industry on the decline doesn't have new users: people that make the purchase decision you are asking for. a smaller yet dynamic market is made mostly of such people so it can actually have more potential buyers.

i run an old company in fixed wire telecom, (bigredwire) and a new one in social media (littleBiggy) and i see this every day.

rick888• 15 years ago

Movie rental places are dying, but I think there is still room for niche Netflix type sites.

runT1ME• 15 years ago

Wow, I think this article is taking quite a leap calling shrinking industries dying. I'm not sure anyone would argue that the typewriter industry is anything but dying, or the pager market.

However, does anyone really think that wired telephone lines are going to disappear from business anytime soon? Or that apparel companies aren't going to need manufacturers?

Shrinking industries are a great place to introduce disruption, and many times profit can be made from causing a market to shrink.

Anytime a high margin industry have an entrant willing to take lower margins, the industry is going to shrink, but it's not bad for anyone but the incumbents. Take a look at Redhat and MySQL, they were happy to take high margin, hugely profitable industries and contribute to their decline, because it allowed them to capture a bigger chunk of a smaller market.

It just so happened it was good for all the rest of us too.

il• 15 years ago

Do you have a landline phone? Do you know anyone under 50 who does? Is there any reason to have a landline phone nowadays when you can make VoIP calls from home for free with Google Voice? I think the writing is on the wall for that industry.

joe_the_user2• 15 years ago

Land-line providers are now broadband providers. But that doesn't leave them small or unimportant. The value of wired-lines is still a lot.

That said, wireless is inherently more efficient than wired and so it seem likely wired technology is going to go by the wayside.

Bitsofstardust• 15 years ago

What about industries that were in strong decline but successfully reinvented themselves such as fast food?

mikecarlucci• 15 years ago

Maybe I'm off base, but for #10 formal clothing rentals, if people are dressing up less often, wouldn't it make more sense to rent a suit or tux for an event than to spend several (or more) times that amount for something you won't wear again or could go out of fashion/no longer fit when the next opportunity arises?

pitdesi3• 15 years ago

More accurate is probably "less people are dressing up." Those that are dressing up are buying. I bought a tux for less than twice the cost of a rental

joe_the_user2• 15 years ago

This article continues my dislike for "argument through top ten lists".

The problem with long lists of X is they can include some things where the argument is clear cut and no one disagrees, then once they get you nodding yes, they can then include other things where the situation is more debatable.

Wired carriers and newspaper printing are indeed two industries which technology at least promises to leave by the wayside. Arguably they've been disrupted or are being disrupted and, whether they will or not, we could at least imagine them shrinking to nothing at all in some number of years.

Home building, on the other hand, is merely in cyclical downturn. It hasn't been meaningfully disrupted on the same sense of the word. It's had a rough downturn but people will keep needing housing. Manufactured homes tend to be one the low end, so, indeed, they've been hit hardest. But still, homes as they are built now involve a huge rat-bag of inefficient, wasted and manual labor. The possibility of manufacturing a better house in very-cost-efficient fashion certainly is a tremendous opportunity for some organization (probably fairly large scale, however). I don't know what combination of automation and design would work but unlike newspapers or wired-networks, there is a big opportunity here.

Top Dying Industries, and lessons for your startup

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