Hot trends in technology come and go, but their impact on the marketplace and consumer preferences can shape the future in unforeseen ways.
The “social, mobile, local” and “Uber of Everything” movement that has dominated conversation as of late has been, at its core, a fundamentally consumer-focused phenomenon. The advent and proliferation of technologies like Facebook, Gmail and the iPhone have not only changed the way we interact with the world around us; they’ve dramatically changed our expectations of how we can and should interact with technology.
As consumers, we’ve become so accustomed to smooth, intuitive and powerful technology in our personal lives that we’re perplexed when we’re forced to use systems and products that remain stuck in the last century. We now demand more out of all the companies and technologies we deal with — not just the “cool” ones.
The central theme we will see play out over the next five to ten years is likely one of improvement vs disruption when it comes to traditional industries. There is a tremendous opportunity for startups to succeed by improving existing technology instead of chasing the next major disruption in the marketplace. The last wave of hot startups helped introduce a new way of interacting with the world around us. The next wave will take that development one step further by helping the laggards find their place in the new digital world.
Take banking for example. There have been a number of startups in the past few years that have tried, unsuccessfully, to disrupt traditional banking. Simple, a banking startup that launched in 2009, came the closest by attempting to do away with the physical banking center, but it was acquired by BBVA Bank in 2014 for $117 million and continues to suffer from drawbacks associated with an online-only bank. Rather than try to disrupt the entire banking industry, why not try to help make it better?
The U.S. banking sector is so entrenched and protected that challenging it from the outside is an exercise in futility. It’s highly unlikely that a startup will come around and pose a real threat to the likes of Bank of America or Chase anytime soon. But there is still a huge opportunity for entrepreneurs to help change the way banks serve their customers.
Consider what it currently takes to get a loan from a mainstream bank. In almost any instance you can count on months of back-and-forth, multiple document requests and an incredible reliance on traditional underwriting practices. It’s only a matter of time before someone figures out how to improve this decades-old process by helping banks adopt some of the approaches pioneered by organizations like Lending Club, Kabbage, and CAN Capital..
Another area that is ripe for improvement rather than disruption is business services. The technology available to small and mid-sized businesses today still leaves much to be desired. However, like banks, the entrenched players in this arena are strong enough that it’s difficult for an outsider to truly alter the status quo. Intuit, the financial technology behemoth, recently articulated their desire to become the “operating system for small business,” and I believe they have the right idea. Still, the vision of an interconnected, seamless platform that enables small and mid-sized businesses to create customized solutions that fits their specific needs remains an ambitious goal. The entire sector stands to benefit if someone can find a way to put the relationship with the business owner at the forefront of the experience and deliver on the promise of a holistic “operating system for business.”
Banking and business services are just two of many areas of industry that stand to benefit from the next wave of startup innovation. The new widespread acceptance of cloud technology and higher demands from consumers means that no one can afford to be just “good enough.” The opportunity for startups to improve existing industries is immense. Banking is a multi-trillion dollar global industry, and business services in the U.S. alone can be measured in the hundreds of billions of dollars. There’s so much room for improvement in these segments that it boggles the mind. Sure, you could spend your time trying to come up with the next big thing to take on the Apple Watch, but why not go after low-hanging fruit first? When thinking about the next hot trend in startups, remember the words of the great American philosopher Huey Lewis: “There is no denyin’ that it’s hip to be square.”
This article was written by Chris Myers from Forbes and was legally licensed through the NewsCred publisher network.