Every other week, On Small Business reaches out to a panel of young entrepreneurs for answers to some of the most pressing questions facing small business owners. The following responses are provided by members of the Young Entrepreneur Council (YEC).
Q: In which sectors do you expect to see a flood of new start-ups and swelling competition this year?
Marcus E. Ray, Co-Founder and COO of Provider Solutions in Plan, Texas:
Anything in technology and healthcare! If your prospective startup touches one of these industries you could be primed to grow in 2013. As consumers we constantly look for new ways to connect with friends, family and business associates while on the run, and technology fuels this drive. Businesses that develop or create unique and practical efficiencies for mobile devices will see aggressive growth.
Secondarily, the healthcare industry will see one of the biggest increases in spend this year and more as we approach 2014. If you have an entrepreneurial mind and a product or service with practical application -- put it in play now! Reference the percentage of GDP that is allocated toward medical and then consider what this will look like once the ACA (Affordable Care Act) is applied to all U.S. citizens. More money will be directed toward this segment of commerce than ever before so the draw for the serial or novice entrepreneur is apparent. Competition for quality products/services will be fierce and this is a good thing. As competition is present your focus is elevated and you find drive to refine your product/service and increase your speed to market, both healthy components for aggressive startup growth.
Robert Kraft, president and CEO of First Edge Solutions in Milwaukee, Wisconsin:
I tend to be a bit of a contrarian in this case. I have never believed in the idea of “chasing” trend industries in as much as I like to think of it from the perspective of what people need now, five years from now and beyond. For example, look how quickly app building has been commoditized. That was a “hot” sector three years ago, and now the margins are gone.
To answer the question at face value, healthcare will be an obvious growth sector as 40 million more people will be in the system. Otherwise, mobile, social media, technology (specifically automation for manufacturing) will all be hot growth industries in 2013.
The contrarian point of view is why we like our niche. We are a multi-channel communications company…essentially, we are the future of printing as it evolves because we work in the channels of document management, print, mail, email, social media, and mobile.
Eric Koester, founder of Zaarly in Washington, D.C.:
The three industries I’ll be watching in 2013 for disruption are education, food and finance. Each of these are massive ecosystems with many entrenched stakeholders who haven’t seen the pace of innovation we’ve seen in some sectors to date. They represent huge challenges to disrupt which is why I expect to see entrepreneurs and start-ups jumping into the fray.
With education, you’ve seen a great deal of momentum into online education, but I think the real disruption will occur in the offline world as technology begins to enter the classrooms. With the growth of charter schools and a new generation of teachers from organizations like Teach for America entering the ecosystem, there are more opportunities to bring technology into the classroom.
The food industry is a huge slice (forgive the pun) of consumer spending. Today’s consumers are becoming more conscious about what they eat, where they eat it and how they themselves prepare it.
Finally, I think that finance and financial services is a market with huge opportunity in the coming years. Look for innovation in lending, borrowing, investing and more this year. In particular, I expect to see innovations that create more peer-to-peer financial transactions such as peer-lending, crowdfunding, student lending and more.
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of promising young entrepreneurs.
Do you have questions you would like to see answered by these young entrepreneurs? Share them with us in the comments below or via email and we’ll pass them along to the YEC for future series.