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Shake It Up: How to Identify Industries That are Ready for Disruption

Chad Brooks
Chad Brooks
Editor Staff
Jan 04, 2016

Plus, The Industries That Will Be Disrupted Next

As customers, we often get so conditioned to an industry that we assume there’s only one way of doing something.

As entrepreneurs, we understand that there’s rarely one way.

In fact, if you look at some of the most successful startups that launched this year, it’s readily apparent that disrupting an existing market is the quickest way to the top.

It’s time we stop thinking like customers and start thinking like the innovative entrepreneurs we are.

3 Tell-Tale Signs of Industries That Are Ready to Be Disrupted

A business industry is a unique organism that’s made up of numerous organizations, brands, characteristics, consumers, and channels. While it’s challenging for a single business to come in and disrupt an entire industry, it’s not impossible. All it takes is the right timing and execution.

The question most entrepreneurs have is, “How can I recognize an industry that’s ready to be disrupted?” If the question were straightforward, every business would enter the market and automatically catapult to the top. So, it’s not a question you can ask if you’re looking for a straightforward or simple answer. With that being said, here are a few general signs that a market is ready for change.

1. Market Complacency

Complacency in the marketplace is one of the biggest telltale signs that something needs to change. For existing businesses in the industry, complacency should be viewed as a troubling indicator that disruption is approaching. After all, it’s once businesses begin coasting – as opposed to innovating – that markets become stagnant.

You could argue that the cable industry has become complacent in recent years, and it appears that this mistake is going to cost them dearly in the coming months. Cable providers have consistently introduced price hikes without adding any real value to their service offerings. Meanwhile, standalone streaming services like Netflix, Hulu, and HBO Go have come in and taken a healthy share of the marketplace.

2. Customer Frustration

The second telltale sign of impending disruption is chronic customer frustration. As customers become frustrated with products and services, they voice their opinions, tighten their wallets, and look for alternatives. This is where savvy entrepreneurs recognize an issue and create an alternative solution.

One example of a company that’s recently recognized consumer frustration and capitalized on it is MedPro. The medical waste industry is relatively top heavy – meaning much of the market is controlled by a single player, Stericycle. However, over the years, small, independent doctors and physicians have become frustrated with the hefty costs of their services.

That’s when MedPro’s founder, George Shanine, recognized an opportunity to create a cost-effective alternative. By driving cost savings of 30-40 percent, Shanine has been able to disrupt the industry and take away a sizeable share from Stericycle and other competitors.

3. Tension Points

According to Luke Williams, author of Disrupt: Think The Unthinkable to Spark Transformation in Your Business, the key to identifying markets that are ripe for disruption is to look for tension points, instead of massive pain points. 

What’s the difference, you may ask? Williams says tension points are much more subtle. They aren’t typically big enough to be considered major problems, which means most businesses aren’t paying attention to them. However, once a solution is developed, it’s obvious that fixing the underlying issue offers an excellent opportunity to penetrate the industry.

Williams claims there are four specific types of tension points: workarounds, values, inertia, and shoulds versus wants. You can read more about each of these tension points in this article.

Markets That Will Soon Be Disrupted

Now that you understand the telltale signs of markets that are ready for disruption, it’s important that we take a practical, real-world look at some markets that are bound to be disrupted in 2016.

Air travel industry

Is there any industry that has people more frustrated than air travel? Airlines are renowned for poor customer service, long waits, outrageous fees and charges, cancelations, delays, overbookings, and everything in between. It’s time for a new player to enter the market and disrupt the status quo. Unfortunately, the barriers to entry are extremely high in this industry, meaning a disruption will require a very calculated effort.

Public education industry

It’s becoming clear that this country’s public education system is struggling to move into the 21st century. There’s a lack of confidence in educators, subpar technology, high costs for higher education, and a general distaste for the stagnant system. Moving forward, we’ll likely see some businesses – both for-profit and non-profit – attempt to disrupt this failing, yet important sector of the economy.

Student loan industry

Speaking of higher education, the student loan industry is obviously in need of some change. As the cost of tuition rises and the median salary for new graduates remains relatively low, students are drowning in student loan debts. While there’s certainly an argument to be made for the fact that not everyone needs to go to college, there’s ample opportunity for alternative student loan systems to be developed. 

Real estate industry

As the real estate market improves in the wake of the financial recession, the need for a disruption becomes obvious. One good example of a business that’s caused noticeable disruption is PivotDesk. The entrepreneurs behind this company have developed a tool that allows companies and landlords to rent out extra office space that isn’t being used. In an age where expensive leases can cripple companies, PivotDesk has developed a unique solution.

Consumer banking industry

Finally, let’s consider the banking industry. While there have been a lot of disruptions in this space over the past couple decades, it would be foolish to think things are about to settle down. In fact, we’re likely to see some even bigger shakeups in the coming months as businesses realize that there’s very little need for physical bank locations. What will the next big development in online banking be? We’ll just have to wait and see.

These are just a handful of industries that are ripe for disruption. If you study any industry long enough, you’ll realize that opportunities for disruption are all around you. By leveraging the tips above and signs – and studying what other businesses have done in the past – you can learn to identify even more markets with additional opportunities. 

Putting It All Together

For an entrepreneur, disrupting an existing industry is a very challenging proposition. It can’t be done without first having a clear understanding of what it is you’re looking for; first thing being market complacency. Industries that have stopped innovating are almost always due for a shakeup.

The second thing to examine is the presence of customer frustrations. When customers are no longer satisfied with the existing product and service offerings in an industry, there’s ample opportunity for another business to come in and cause a disruption.

Finally, you have to look for tension points. As mentioned, these are much smaller and more discreet than obvious pain points, but the solutions to these issues can fuel significant change.

Once you find an industry that falls under one or more of these headings, you can begin to think about disruption. And as you can see from the aforementioned examples, there are plenty of industries in need of significant shakeups as we enter the new year.

Image Credit:

SeventyFour / Getty Images

Chad Brooks
Chad Brooks Staff
Chad Brooks is a writer and editor with more than 20 years of media of experience. He has been with Business News Daily and for the past decade, having written and edited content focused specifically on small businesses and entrepreneurship. Chad spearheads coverage of small business communication services, including business phone systems, video conferencing services and conference call solutions. His work has appeared on The Huffington Post,,, Live Science, IT Tech News Daily, Tech News Daily, Security News Daily and Laptop Mag. Chad's first book, How to Start a Home-Based App Development Business, was published in 2014.