Cream of the Crop: How These Tech Startups are Thriving in Saturated Industries

Business.com / Strategy / Last Modified: February 22, 2017

As a number of tech startups have proved over the past few years, thriving in a saturated market isn’t impossible. Learn how some do it.

For a startup, there’s nothing more difficult than entering an established industry and gaining some of the market share.

However, it’s certainly not impossible.

As a number of tech startups have proved over the past few years, thriving in a saturated market isn’t impossible.

It does, however, require patience and strategic action.

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These 5 Tech Startups Are Shaking Up Their Industries

It’s the era of tech startups; and while most tech startups stick to industries that are highly technical in nature, a handful of bold startups are diving into heavily saturated traditional industries.

Here are a few startups to keep an eye on, as well as the industries they’re penetrating:

1. DoorDash: The Restaurant Industry

Founded in 2013, DoorDash has sent a jolt through the restaurant industry by providing a unique service that others have failed to effectively accomplish in the past: on-demand food delivery from any restaurant.

With thousands of drivers (think of them like Uber drivers) DoorDash is able to take orders from a number of restaurants and then deliver the food to customers at a very affordable price. The model is so successful that a number of popular restaurants have officially partnered with DoorDash.

2. Shyp: The Packaging and Shipping Industry

The shipping industry is pretty stale. If you want to send something in the mail, you have to pack it yourself or head to a UPS, FedEx, or USPS location. And if the item you’re sending is large or unique in shape, then you have to jump through hoops to figure out how to move the item, package it, and send it. Shyp, the Daymond John-backed service with $50 million in venture capital money, is changing this.

Shyp differs from every other established company in this space by letting people order a courier on-demand. Customers simply place an order, a courier picks the item up, and the goods are then professionally packed in one of the company’s nearby warehouses. It’s a much more efficient method of shipping and is already changing the industry’s direction.

3. VR Global: The Real Estate Industry

The next big thing in the real estate industry is virtual reality and VR Global is leading the way. This New York-based startup offers real estate firms and agents enterprise ready solutions that make it possible to deliver virtual reality property tours and immersive experiences.

By taking a traditional practice, property showings, and adding an innovative spin, VR Global has cemented itself in the real estate industry. While there’s still a lot that needs to be done in terms of consumer education, it’s clear this is one startup that will be doing a lot of disrupting in the future.

4. theSkimm: The News Industry

Over time, news consumption has changed. No longer do people wake up and read the newspaper before heading to work. Things are now much faster paced. In fact, some people don’t even have time to browse their Twitter news feeds or search news websites.

Enter theSkimm: a maturing startup that’s revolutionized the way people consume news. It’s a daily email newsletter that provides subscribers with just the right amount of information that they need to stay up to date on what’s happening in the world. Think of it like an abbreviated newspaper with headlines and short descriptions that anyone can understand.

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5. Mallzee: The Fashion Industry

While E-commerce has opened up an array of different options for the fashion industry, there’s still a major disconnect when shopping online versus shopping in-store. One of the biggest issues with shopping online is that it’s difficult to quickly browse through selections. Mallzee, a mobile-exclusive fashion merchant, has changed this.

The Mallzee app uses a Tinder-like swipe model that lets users input various metrics. The app then delivers a string of products, one at a time, and the user can swipe left or right. The selections can then be ordered or sent to friends for feedback.

The Takeaways for Tech Startups and Their Entrepreneurs

As you can see, it’s possible for a startup to enter even the most mature industry and make a splash.

Tech startups do have one thing working to their advantage, though. They are typically more innovative and creative than traditional companies who are stuck in their ways.

Let’s highlight a few of the takeaways for tech startups and entrepreneurs looking to enter saturated industries:

  • Leverage a niche. In large industries, there are multiple pain points. If the other players in the space are trying to attack all of these pain points at once, you may be able to benefit by honing in on a specific niche and establishing yourself as the go-to specialist for that issue. From there, you can grow into other areas.
  • Service over price. Many entrepreneurs figure the only way to enter an established market and undercut the competition is by offering a better price. This isn’t true, though. “Not everyone is going to go for the cheapest price,” says entrepreneur Thomas Hoebbel. “Remember: You want people who value your service and are willing to pay you for it, if you are the cheapest person in town you will get the cheapest clients in town.”
  • Deliver a value-add. It’s virtually impossible for a small startup to enter a mature industry and compete with large companies if there’s nothing unique involved. The only way to stand out is by offering some sort of value-add. This could be an additional physical product or a unique service. Regardless of what you choose, there needs to be something new.
  • Identify the right distribution channel. “Sometimes all it takes is pinpointing the right distribution channels,” says entrepreneur Bubba Page. “Identify where your target audience lives online and turn those channels into profitable business outlets.” Offering the same products and services through a new distribution channel can be enough to gain a foothold.
  • Remain nimble. One of the biggest advantages you have as a tech startup is the fact that you’re much more nimble than larger corporations. Eli Verschleiser, a Wall Street financier, and entrepreneur stated: “Instead of pursuing fast growth, take advantage of this flexibility and use it to your advantage.” Notice a new trend or opportunity after launching? You may be able to pursue it with few ill effects.

By no means is it easy to enter an established market and make noise, but tech startups are doing it every single day. The key is to focus on these different angles and strategically pursue new opportunities as they unfold.

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Take Your Tech Startup to the Next Level

From an entrepreneur’s perspective, the great thing about a saturated market is that you know there’s a demand for what you want to offer. The question is whether or not there’s an opportunity for you to enter the industry and provide something of value that mature brands aren’t currently offering.

By studying what successful tech startups are doing, you can increase your chances of taking your startup to the next level.

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