Find Opportunities to Disrupt Any Industry in Less Than 20 Minutes
Do you want to easily find new business opportunities? Do want you to be the founder of a startup that changes an industry?
Today, anyone can start a business at the drop of a hat. The Internet has leveled the playing field and the barrier to entry is low. That also means that the competition for attention, customers, and money has never been more fierce.
What if you could know from the start if the business your are hedging your bet on has the potential to stand out from the crowd? That it can change the way that a specific industry operates? What if you could map out any industry in detail in as much time as it takes to make yourself breakfast?
Now you can.
Every industry is different, but the business types that operate in each one are the same.
Humans have been doing business since before the beginning of recorded time. But while we have been doing business for thousands of years, we have been repeating the same business types, over and over.
Even if you think that you have come up with a unique approach to business, you have not. It may be unique to your industry, and congratulations if it is, but when all is said and done, we are all repeating variations of a set number of business types.
And this is good news!
The knowledge that there is a limit on the different types of businesses that could ever exist lets you predict the future of your industry. You can then move in to fill gaps that will give you an opportunity to capture a new market.
Enter the 6×4 Method
Assessing what type of competition there is or isn’t allows you to make the right decisions when it comes to pursuing new ideas or backing a new startup. The 6×4 Method lets you quickly get the lay of the land of any industry.
If you are working on an established business and want to find out what the future might look like, the 6×4 Method lets you do that too.
All opportunities for disruptions are threats to your business if you are not ready or able to pursue the opportunities yourself. Making the 6×4 Method a part of your normal SWOT analysis lets you stay ahead of your peers.
Business industry assessments are not a new thing. They have been around as long as industries have. The difference you will discover using the 6×4 Method is that it applies to all industries and delivers a complete overview every time.
There is no need for you to hire an industry analysis expert or buy access to large business databases listing every active business. Once you learn how to use the method you can find the gaps in any industry using information you can find online or locally.
The idea behind the 6×4 method came from my own experiences trying to discover what other businesses operating in the same industry as the one I was looking to enter were doing.
I had made lists, gone through offers, and tried to determine if a business was competition or not. It was difficult to tell in most cases, either the other businesses seemed like they were dooming me before I started or as if they were no threat at all.
But I was never sure as I had no way of mapping out the industry I was looking to enter.
This kept bothering me since I was just guessing and I started to look for a way to categorize businesses according to a type.
There are plenty of personality type classifications for people, but I could not find anything similar for businesses. I decided to see if I could create my own business type classification.
I investigated what all businesses have in common and came to the conclusion that they all solve problems by supplying one or more sought after solutions.
The question then became how many problems are there that a business can solve?
At first it seemed like an enormous amount, thousands or millions even. I noted every problem I could find and put similar ones into the same categories and a pattern emerged.
A pattern that came into clarity when I found a quote from a poem by Rudyard Kipling. It goes like this:
I keep six honest serving-men
They taught me all I knew;
Their names are What and Why and When
and How and Where and Who
It all fell into place.
There are only six basic problems that can be solved:
What — Why — When — How — Where — Who
That is it.
Every problem that a business has solved, is solving, or will ever solve belongs to one of these root problems.
The six root problems all point in different directions: factual, analytical, locational and so on. The problem being solved is always equal to the root of the pain facing the clients and customers.
Let’s use accountants as an example. The problem they take care of boils down to ”How do I keep my finances in order?” They solve a “How type” problem.
But knowing this was not enough for me to get a clear overview of the landscape of an industry. I found that businesses solving the same problem could provide very different solutions.
That led me to search for common denominators for all the solutions that are provided by businesses. What I found is that there are even fewer solutions than there are problems.
Every single business offer there ever was, is or will be fits into one of four categories:
Information — Help — Tool — Platform
Each solution represents a type that functions like an umbrella. Narrowing it down to only four categories to find a common denominator makes it easy to pair them up with the correct problem without leaving any solutions on the table.
These four standard solutions are the only options. In the case of the accountants, they offer help. That means that they take care of the problem for you. Other businesses solve the same problem as accountants by providing guides and how to books, in other words information. Some solve the problem by offering a software, a tool, that lets you keep your own books. I have not been able to find a platform that deals with accounting in the same way that Uber is a platform for personal transportation — a gap ready for taking?
The 24 Business Types
Mixing and matching between the six root problems and the four standard solutions gives you 24 different business types to choose from. Every business you’ll ever encounter belongs to one of these types.
What type your business belongs to determines what kind of business you run, what clients your serve, and how much competition you have on your hands.
Some types are more common than others and you will almost always have a lot of competition. One of those types are businesses that solve a How-problem by providing a tool-solution.
Like the computer, tablet, or smartphone that you are reading this article on. It seems that people like to have a tool to help them solve a problem.
The 6×4 Method will show you what the core of your business is and how it relates to the market and industry at large — just like a Meyers-Briggs personality test gives you insight into your own characteristics and how you interact with the world and your peers.
The Meyers-Briggs personality test is also used by employers to ensure a new employee is the right match. In the same way the 6×4 Method can be used to make decisions about investing and what startups to accept into an incubator or accelerator program.
6×4 Matrix — The Chessboard of Business
The six root problems along with the four standard solutions make up a Matrix for assessing your industry. Putting them into a grid and discovering what the competition is up to gives you a powerful tool for decision making as well as ideation.
In almost every industry you will find several gaps where no-one is operating yet. Some of these gaps are justified by the market or by the limits in the technology available. Some gaps are begging to be filled.
The businesses that fill these gaps are the ones you have heard about making waves in industries all over the world. Businesses like Spotify, Amazon, Uber, AirBnB and many others. They all went for a gap and they all changed the landscape of their industries.
The startup you are working on or planning to invest in could be like those businesses. After mapping out the industry at hand, using the Matrix, you will know for sure if you have a perfect gap of opportunity.
To find the gaps in your industry follow these steps:
- SEGMENT YOUR INDUSTRY
Start by narrowing down the industry you want to examine. This will provide you with the outer parameters for your matrix. You could focus on your closest competition, on your niche market or on your industry as a whole.
- DISCOVER THE ACTORS
Dig deep to find all the businesses that are active in your chosen field. Most of them you should already be aware of if you are working on an established business. If you are working on a startup, take the time to get to know what is going on in your chosen market.
- DETERMINE BUSINESS TYPES
Now that you have identified the actors in your chosen industry, take a close look at what problems they are solving and what solutions they are providing to those problems. Match each business with its corresponding type.
- PLACE BUSINESSES IN MATRIX
Place the businesses into the Matrix. Now your Matrix will start to take shape. Some business types will dominate your industry.
- FIND THE GAPS
If you have been thorough in completing the four previous steps, the gaps in your industry will be obvious. If you did not find any gaps, either narrow down your search to a more precise area of practice or open it up to industry wide thinking to find a gap of opportunity.
From start to finish this process will take you less than 20 minutes once you know the method. Go ahead and use it to come up with a new business idea or to as a part of your SWOT analysis.