Business: Market Inflections: How to Easiest Way to Think of Million Dollar Ideas
So often, we feel as if we have to grind it out for years to get results.
If you work hard and persistent enough, then the results will come. Well, what about all the outliers who defy this rule?
- Charlie D’amelio has the biggest following on TikTok. She has 80+ million followers now, and she started her account in June 2019. She wasn’t known prior to this and didn’t have any unfair advantages.
- Billion-dollar companies are created at a faster and faster rate. ForHims.com is a telehealth company that’s valued at over a billion dollars. It was founded in 2017.
I loved reverse engineering success, and I’ve come to the conclusion that we’re living in the age of leverage.
Here’s the truth: If you find and ride the right “wave”, then you can achieve astronomical growth without having to grind it out for years.
When I look back on the history of affiliate marketing, so many super-affiliates can credit their success to riding the right wave.
Whether it was utilizing traffic sources before they became too competitive, or the ability to create angles that reflect the current pain points in the customer’s mind.
Hard work was involved of course, but we’ve underestimated how important timing can be.
So, how do we spot these “waves” before they happen?
The key is to understand market inflection points and their effects.
Inflection points are key events which lead to significant changes, or “disruptions” as people love to call it.
I’ll list out some inflection points, and I want you to think about how what kind of businesses took advantage of them.
- Everyone starts using a smartphone, and these smartphones have GPS tracking enabled.
- Amazon.com allows 3rd parties to sell on its website. Now everyone can get easy access to Amazon’s massive audience.
- 9/11 causes the TSA to create new regulations. Now everyone needs to take off their jacket, shoes, and laptop.
- COVID-19 changes the world. Some schools and universities implement virtual learning. Everyone’s required to wear a masks.
As marketers, we’re always trying to figure out what’s “trending” or “what’s hot”, right?
The problem is you’re always going to be a few steps behind. Instead of trying to figure out what’s hot now, why not train yourself to see what’s going to be hot?
The easiest way to do this is through a market inflection framework. I’ll show you different types of market inflections and share stories of how different companies capitalized on them.
After reading this article, you’ll be able to spot opportunities everywhere.
The 6 Types of Market Inflections
I’ve organized market inflections into six different categories and provided different examples.
You should go through each point and think about what companies took advantage of market inflections.
1. Accessibility Inflection
I can have a new e-commerce brand up and running within a few hours in 2020.
The website would be up, I’d have access to inventory, and I’d be able to process your credit card.
Now imagine if this was 1998.
I would’ve had to invest thousands of dollars to hire people to build the technology. And I would’ve suffered brain damage trying to delegate tasks via AOL Instant Messenger.
If third-party payment processors are this shitty in 2020, I can’t imagine what kind of scumbags were around in the ’90s.
Well, e-commerce is now more accessible because of different tools.
What other industries have boomed because the barriers to entry have lowered?
I can’t imagine what a pain in the ass it must have been to create a monthly subscription box a decade ago. Now Cratejoy has made it simple for anyone to enter that industry.
Subscription-based newsletters have been around for decades. Now it feels like everyone’s launching a paid newsletter because of SubStack.
These technologies don’t create new markets from scratch. But they do lower the barriers and increase the number of players in the game.
Accessibility also means democratization. If I want to be a rapper I can drop my next mixtape on SoundCloud. (But I’m not a rapper.)
If you’re funny, you can upload videos on YouTube with your phone. We don’t need permission anymore.
Here’s one thing I’ve learned about business, if something becomes too accessible then sooner or later it’s going to feel too “saturated.”
We tend to run away from difficulty or pain. We bitch that something is “too hard” or takes too much time.
But that friction and headache is what keeps the competition away. In a way, the early e-commerce sites had a competitive advantage because the Shopifys of the world didn’t exist.
2. Societal Shift Inflection
Ten years ago I had no idea what “gluten” was.
Now every single grocery store has many “Gluten-free” bread and cookies to accommodate the Karens.
We’re always adopting new beliefs as a society. Remember when doctors were promoting cigarettes as being healthy back in the 1950’s? Yeahhh….
So what society shifts are happening right now?
- Well, the Black Lives Matter movement is going on. What’s an effect because of that?
- More companies want diversity in their workforce. OK, what are some solutions?
- There will be a demand for tools to help both of these. For example, diversity recruiting software to analyze your existing workforce. Or transparency software to report racial discrimination.
COVID-19 is unleashing societal shift after societal shift. Seriously–it’s like we had two decades worth of them in one year.
What are some societal shifts happening now?
- People want larger homes
- More and more companies are becoming remote
- Everyone’s wearing face masks.
- Children are doing virtual learning
- Survival Prep
- What societal shifts are happening right now?
- What problems are being created because of those?
- What are some solutions?
Here’s a video I made a few months ago where I brainstormed Pandemic Business Ideas.
3. Platform Inflection
“A platform is a business model that creates value by facilitating exchanges between two or more groups, usually consumers and producers” – Alex Moazed, Modern Monopolies.
Platforms are where billions are made.
The platforms themselves are billion-dollar businesses. But each platform also hosts million-dollar businesses created on the platform itself.
(Ok…maybe the Uber Drivers and Doordash Delivery drivers aren’t getting wealthy.)
But think about all the businesses built off of YouTube, Facebook, the Apple App store, and Amazon.
A big takeaway here is timing.
It’s much harder now to build a YouTube audience than 10 years ago.
It’s much harder now to build an Instagram audience than 10 years ago.
Take a look and research what emerging platforms there are because there’s always an advantage in being a first mover.
When Facebook Pages was first opened, you could get massive organic reach. Now my posts probably reach around 20% of my Facebook fans.
In the early days of Instagram, posts displayed chronologically. Anything you posted would be broadcasted to your followers. Now it’s all based on an algorithm and it’s hard to even reach the following that you built.
Charli D’amelio is talented and attractive. She would’ve been successful if she did dancing videos on any platform.
But she was able to become a huge celebrity in under a year because she spotted and rode a rising platform–TikTok.
4. Technology Inflection:
How many companies have tried to be the “Uber of Blank?”
All these companies are taking advantage of a technology inflection.
People adopted smartphones, and these devices came with GPS tracking technology.
These inflections allowed new companies to be built utilizing these technologies.
When people think about drones they imagine military drones or the kind that takes awkward videos of you on your balcony.
There are now window cleaning drones. Amazon is working on delivering packages with drones. Disney is using drones to help in their light and firework shows.
The technology that I’m most excited about right now is augmented reality. There will be new billion-dollar companies created once Apple releases their Apple Glasses.
5. Rules and Regulations Inflection:
And because of that terrorist attack, new rules and regulations were passed. These new rules and regulations created new pain in the asses for us by forcing us to take off our shoes and laptops.
A new business emerged from those new rules. For $179 a year, Clear allows you to skip the lines without taking off your shoes and laptops.
There’s also an opportunity when you remove rules and regulations.
These companies weren’t legally possible over a decade ago.
First, the patents of some drugs such as Viagra expired.
Second, now you could legally get a prescription without having to go to the doctor’s visit.
You can imagine how much growth these companies have done because of COVID-19.
So whenever there are new regulations added or regulations removed, think about what businesses can emerge.
6. Influencer Inflection
I remember being a part of a mastermind group a decade ago.
We were a group of affiliate marketers, all 20-somethings. Besides talking about campaigns, we had one weird ritual every day.
We liked to watch Oprah. It wasn’t because we were interested in getting advice meant for middle-aged women.
We watched her because she has big dick energy over middle-aged women.
She could recommend anything and it’d become an instant bestseller.
So we kept our eyes glued to her show hoping that she’d recommend something in regards to dieting.
There are some people out there who have so much influence. They can create million-dollar industries from casual conversations.
Some of these God Influencers Include:
- The Kardashians
- Kanye West
- Joe Rogan
If Kanye West were to start wearing a fanny pack every time he’s out, I guarantee you there’s going to be millions made from people starting fanny pack stores.
These are the titans. But realize that there are these titan influencers in every little niche out there.
Understanding these frameworks helps me reverse engineer companies, but it also helps me think of new ideas.
Let’s say you’re not interested in building one of these million, or billion-dollar companies.
You just want to make your first $1,000 online.
Alright, let me think of an idea real quick.
A societal shift = face masks.
An accessibility shift = I saw that Printify now lets you print custom masks.
If you combine these two on the right platform (Amazon, Facebook, or Etsy seem great), then that’s a great money maker.
What’s your biggest takeaway from this article?