Re:Ask YC: Can you learn an industry without working in it?
by SwellJoe on Friday May 30, 2008 @01:59PM
(#204665)
This is what business partners are for.
I've considered entering the medical billing industry on several occasions...because my sister owns a medical billing firm with several small to mid-sized clients in Atlanta (large clients have in-house billing departments). And the software in the field is atrocious and expensive. But I wouldn't consider it, if I didn't know just the right person to partner up with that would allow the software to be used immediately for real work with real clients.
Such a partnership doesn't need to be 50/50. You can certainly find someone who is experiencing pains in the industry you're interested in. Invite that person to dinner, bring a note pad, and figure out the smallest functional piece of their infrastructure you could replace that would solve a real problem better than existing tools. Once you've done that, get commitment from that person that when you build it they will use it (not buy it, just use it, for real).
From there, keep working to replace pieces of the existing solution with better ones, while marketing directly to the people who need what you're building. Every new customer will increase the word of mouth network effect within that particular industry, and when they love your first widget, you can then start campaigning for them to buy your second widget. Lather, rinse, repeat, until you've replaced every component in their existing system with a better product.
Another way in is to build ancillary tools that make aspects of the existing solution nicer. Think Lotus evolving from the charts plugin that Mitch Kapor wrote for Visicalc.
I've considered entering the medical billing industry on several occasions...because my sister owns a medical billing firm with several small to mid-sized clients in Atlanta (large clients have in-house billing departments). And the software in the field is atrocious and expensive. But I wouldn't consider it, if I didn't know just the right person to partner up with that would allow the software to be used immediately for real work with real clients.
Such a partnership doesn't need to be 50/50. You can certainly find someone who is experiencing pains in the industry you're interested in. Invite that person to dinner, bring a note pad, and figure out the smallest functional piece of their infrastructure you could replace that would solve a real problem better than existing tools. Once you've done that, get commitment from that person that when you build it they will use it (not buy it, just use it, for real).
From there, keep working to replace pieces of the existing solution with better ones, while marketing directly to the people who need what you're building. Every new customer will increase the word of mouth network effect within that particular industry, and when they love your first widget, you can then start campaigning for them to buy your second widget. Lather, rinse, repeat, until you've replaced every component in their existing system with a better product.
Another way in is to build ancillary tools that make aspects of the existing solution nicer. Think Lotus evolving from the charts plugin that Mitch Kapor wrote for Visicalc.