A lot of industries exist. There’s the human resource and recruitment services, clothing manufacturing, and the tourism industry - to mention a few. All these industries provide founders with many options. It makes it easier to find an answer to the question of what industry a founder should launch their startup in.
Although there are many great options, a couple of industries still stand out from the bunch. These industries breed a good number of small and large companies. They also appear in very many regions.
We must highlight that it is difficult to pick out these outstanding industries from the bunch. The reason for this is that there is tight competition between industries. Secondly, industries leading in one region don’t always lead in other regions. This is due to varying customer preferences and demands in different regions.
Nevertheless, we have put together a list of the top 5 industries where launching a startup could easily prove productive. Here, have a look at it.
Technology is a crucial part of every modern business and organisation. Being so, the industry is one of the most popular out there, with a market value of nearly $6 trillion.
The tech industry focuses on designing, manufacturing, distributing and implementing technological devices. It also involves the various services related to the use of technologies. Examples include legalities and safety.
Launching a startup in the tech industry will mean choosing from an endless list of subcategories. Some subcategories are Edtech (educational technology), Fintech (financial technology), and software publishing. Also, there’s gaming and virtual reality, and cloud computing and artificial intelligence.
Real estate is another top industry a founder should fix their tent in. It involves the processing of physical properties including home residences, industries, and agricultural lands.
The real estate industry surpasses many other industries. It reached a global valuation of about $326.5 trillion as of the year 2020 and this figure is believed to grow even further in 2022. According to Globe News Wire, major factors responsible for the increased valuation of real estate are reduced interest rates, speedy urbanisation, and growing population numbers.
Startups launching in the real estate industry can choose to either develop, market, trade or manage the residential assets.
As more and more startups spring up, their need for the marketing industry grows. And speaking of new startups, Africa for example, saw tremendous growth within the last three years.
In 2021, the continent reportedly raised $4.3 billion - a value that was two and a half times that of the previous year. High investment values like this dictate the presence of numerous new or scaling startups.
These new and existing startups need to reach their unique set of customers and clients. It is at this point that the marketing industry comes to the rescue.
Like its name describes, the marketing industry handles “marketing” of corporate and individual businesses. It communicates or relates the products or services of one company, business, or individual to another company, business or individual.
The finance industry “encompasses banking, leverage or debt, credit, capital markets, money, investments, and the creation and oversight of financial systems.” And since most of the world’s businesses are migrating to the virtual environment, there is a change in the way financial institutions operate and how transactions are initiated, processed, and recorded.
The banking industry which falls under the finance industry holds tangible proof of growth in the latter. These last few years, the sector has been trailed by challenges including “competition from FinTechs, changing business models, mounting regulation and compliance pressures, and disruptive technologies.” Nevertheless, banks and financial institutions are progressing.
Much of this progress is the result of new technologies and systems. Some of these new technologies include cashless ATM transactions, and payments using QR codes. On the other hand,
the new systems include climate or weather derivatives which work just like insurance, and central bank digital currencies (CBDCs) which are centralised tokens resembling cryptocurrencies.
The wide scale impact of the finance industry gives an opportunity for new innovative startups to jump into the market. These startups can deliver financial law services if they wish to stay off fintech since it has a lot of competition.
Another top industry we will look at is the retail industry. This industry is suitable for the launch of product-based startups. Retailing is all about the trading of goods and physical products. Its major targets are businesses, individual consumers, and administrations.
A number of platforms exist for hosting a retailing business. Some of these platforms are business-to-business (B2B), consumer-to-business (C2B), and business-to-administration (B2A).
The large size of the retail industry is associated with the number of platforms available to businesses in the industry. But that’s not all. Online retailing activities are blooming in many regions of the world. This is known as e-commerce.
In 2021, e-commerce activities produced well over $5 trillion worldwide. The revenue figure as at 2022 is $7 trillion. This figure is expected to double by 2027.
Launching your startup in the right industry cannot be overemphasised. It’s as important as choosing the right type of soil to plant a particular crop. What happens if this is not done correctly? The crop doesn’t grow well, and similarly, the startup doesn’t develop into what it should.
Founders can familiarise themselves with their preferred industries by understanding three things. The competition, the buying and distribution patterns, and everything about other industry participants. This will set the pace for drafting a workable business strategy.
Understanding the industry and making solid plans has two benefits. It ensures that the startup survives and performs well in the long term. It also prevents startups from having to pivot along the way.
The top industries for launching a startup include: - **Technology Industry**: It's valued at nearly $6 trillion and offers endless opportunities in subcategories like Fintech, Edtech, and artificial intelligence. - **Real Estate Industry**: With a global valuation of $326.5 trillion in 2020, this sector benefits from steady growth driven by urbanization, population increase, and reduced interest rates. - **Marketing Industry**: Startups rely on marketing to reach their target audience, and the industry continues to grow as more businesses enter the market. - **Finance Industry**: Innovations like cashless transactions and central bank digital currencies make this sector attractive for financial startups. - **Retail Industry**: Strong e-commerce growth, surpassing $7 trillion in revenue in 2022, offers lucrative potential for product-based startups.
The technology industry is dynamic, with a market value of nearly $6 trillion. It is integral to modern businesses across various sectors. The industry encompasses innovative subfields like Fintech, Edtech, gaming, AI, and cloud computing, offering diverse opportunities to launch a unique startup. Its constant evolution ensures sustained growth and relevance.
The real estate industry is valued at approximately $326.5 trillion as of 2020 and continues to grow due to factors like urbanization, a rising population, and reduced interest rates. Startups can explore various segments within the sector, such as developing, marketing, trading, or managing residential and commercial properties, ensuring opportunities for sustained business.
Startups can leverage the marketing industry to establish their brand, connect with their target audience, and enhance visibility. The increasing number of new startups globally, like the $4.3 billion raised in Africa in 2021, has fueled demand for marketing services. Startups can find creative solutions in this industry to serve other businesses or individuals effectively.
The finance industry is evolving rapidly with groundbreaking technologies like cashless ATM transactions, QR code payments, and climate derivatives. Central bank digital currencies (CBDCs) mirror cryptocurrencies and represent a new frontier in financial systems. These innovations allow startups to disrupt traditional financial services and offer niche solutions to consumers or businesses.
E-commerce has been a game-changer for the retail industry, generating $7 trillion in revenue in 2022, with projections to double by 2027. The rise of online retailing platforms, including business-to-business (B2B) and consumer-to-business (C2B) models, has transformed the sector, making it easier for startups to tap into global markets and achieve scalability.
Founders should evaluate: - **Market Demand**: Assess the growth and size of the industry. - **Competition**: Understand the intensity of competition in the field. - **Customer Behavior**: Explore regional preferences and distribution patterns. - **Subcategory Options**: Identify niches within the industry for differentiation. By analyzing these factors, founders can select an industry aligned with their goals and resources.
Yes, risks exist in all industries. For example: - **Technology Industry**: Rapid changes in technology may render solutions obsolete. - **Real Estate Industry**: Economic downturns or regulatory issues can affect property demand. - **Marketing Industry**: Evolving consumer behavior requires constant adaptation. - **Finance Industry**: Intense competition and regulatory challenges can pose barriers. - **Retail Industry**: Saturation in certain e-commerce niches and supply chain disruptions may impact performance. Founders need to navigate these risks carefully.
Yes, retail startups can operate outside e-commerce by establishing brick-and-mortar stores, leveraging local communities, or utilizing direct sales models. However, integrating some form of digital reach, like social media marketing or inventory apps, can offer competitive advantages and wider visibility.
Highly competitive subcategories include: - **Technology**: Fintech, gaming, and software publishing. - **Real Estate**: Residential property development. - **Marketing**: Digital marketing and social media strategy. - **Finance**: Payment processing and online banking. - **Retail**: E-commerce platforms like fashion retail. Startups can carve niches within these groups by offering unique value propositions, entering underserved markets, or adopting innovative approaches.