Ask YC: Can you learn an industry without working in it?

#1

Post by alex_c » Fri, May 30, 2008, 2:34 PM UTC

Let's forget Twitter and Facebook for a bit. I think some of the most interesting opportunities are in industries not directly related to software, where creative application of software can make a huge difference. Octopart is a great example.

The reason there are many such opportunities is that very often software people focus their efforts on rehashing the same themes - software for developers, software for "business", social software, or software for its own sake. And the reason behind this is that many developers aren't exposed to the other industries - mechanical, chemical, transportation, hospitality, farming, industrial fishing... the list can go on and on.

So, a long-winded way to get to my question: Can you learn an industry without working in it, to the point where you can spot the gaps that can be filled with software? If so, how?

Re: Ask YC: Can you learn an industry without working in it?

#2

Post by prakash » Fri, May 30, 2008, 2:42 PM UTC

Yes & No.

Yes, because, you don't come with the pre-conceived notions, assumptions that hamper that particular industry. you come with a fresh set of eyes, you ask why a lot and come away with a lot of interesting observations.

No, because, you don't have enough data points; meaning what you observe could be representative of one company or the entire industry.

To the how part of your answer. Work at a job that gives you the data points. You could speak to the founders of all the companies in the hospital health records and HIPPA compliance industry for eg.

Re: Ask YC: Can you learn an industry without working in it?

#3

Post by aggieben » Fri, May 30, 2008, 3:29 PM UTC

You don't have to "learn an industry", you only have to be made aware of a problem in enough detail for you to solve it.

That can be done by learning an industry, but that's the expensive way. Cheaper is to have broad first-hand experience, or a large network of people who will tell you about problems that need to be solved in their industry.

Re: Ask YC: Can you learn an industry without working in it?

#4

Post by michael_dorfman » Fri, May 30, 2008, 3:37 PM UTC

Yes, you can. It may be easier if you do work in it, of course, but even that doesn't always help, because you may be mistaking your particular problem with a more general need.

The trick (if you can call it that) is to speak to a number of people in different roles in the chosen industry, and try to elicit different problems that need solving. Then, run the results by the others, and listen carefully. Read the trade journals, and see what solutions are out there, and you'll see what the gaps are.

Re: Ask YC: Can you learn an industry without working in it?

#5

Post by josefresco » Fri, May 30, 2008, 3:38 PM UTC

A story to share: My wife worked for a local Land Rover dealership for a short time a couple years back. I visited one day and saw the computer system they used and was shocked at how ancient and horrible the interface and hardware were. For a dealership selling 80K Range Rovers I thought it was downright crazy that they were using software that looked like it was from the 80's.

I realized however after talking to her boss that I couldn't just waltz in there and tell them I'd solve all their problems with my new shiny software app. I needed a connection, several steps up the corporate ladder to have any chance of landing that gig. Which in turn would require years of working within the corporation or at least experience in a related field to give me credibility (and designing/building web 2.0 apps doesn't count)

Something so simple to me was in fact tied up by a very traditional model where "who you know" is more important than what you know or what you can deliver.

Some uber geek walking in to your industrial fishing plant and offering to re design your software (for a fee of course) is not going to be welcomed with open arms. Pre-existing relationships are very important and still play a major role in where money gets spent (software industry or not).

Re: Ask YC: Can you learn an industry without working in it?

#6

Post by colortone » Fri, May 30, 2008, 3:46 PM UTC

No, unless you can find some information independently (via research or people). That info is hard earned and you will be a lot less convicted (and it will be harder to convince people that you're right) if you have no direct experience.

If I was a hacker, I'd be looking for smart/irreverent/idealistic people in industries with big problems to partner with. That sounds a lot more fun.

See Fred Wilson's post from today.

I think this very point is why there are soooooooo many "productivity apps" and "music reccomendation" apps. All software people listen to music and want to be more productive.

What about fashion? What about auto mechanics? What about schools in India? What about transportation in rural China?

I strongly recommend Umair Haque's article on "Hacking the Industrial Economy":

http://discussionleader.hbsp.com/haque/2008/05/last_week_i_a...

Great question!!!

Re: Ask YC: Can you learn an industry without working in it?

#7

Post by foodawg » Fri, May 30, 2008, 3:49 PM UTC

michael_dorfman wrote: post #4

Yes, you can. It may be easier if you do work in it, of course, but even that doesn't always help, because you may be mistaking your particular problem with a more general need. The trick (if you can call it that) is to speak to a number of people in different roles in the chosen industry, and try to elicit different problems that need solving. Then, run the results by the others, and listen carefully. Read the trade…

I have to agree with this point. No, you do not have to be part of an industry to do work in it. It will certainly make the proposition very difficult however.

One of my YC ideas was a product aimed at the HR industry. I personally have no affiliations with it but my co founder was a part of it. While my ideas were very interesting from a freshness perspective, I was often was off from what our client base wanted the most.

The benefits of being part of the industry is having connections, knowing where to look, and what to look for. If you are not part of it, this can be time consuming and costly. It's extremely beneficial to have a co founder, or just an adviser with industry experience. Like Michael's comment, their leads give you many heads to run ideas by, and the resources necessary to understand your clients.

Re: Ask YC: Can you learn an industry without working in it?

#8

Post by dennykmiu » Fri, May 30, 2008, 3:52 PM UTC

I think you are asking a very important question for any entrepreneur which is "how do I go about finding a substantial business opportunity upon which I could build a viable enterprise?"

Recently I wrote about "entre-sumer" which I believe is an important cornerstone for bootstrapping startups. Basically I am arguing that we need to refine the "Build Something People Want" concept further by narrowing it to "Build Something I want".

That is, to maximize our chance for success, we need to be the "entre"preneur who creates the solution and at the same time, be the con"sumer" who has a burning need for such solution.

So in that sense, the Founders of Google, YouTube, Facebook and Twitter, etc., were doing just that. They were the representatives of their generation and they were the "alpha" dogs. By eating their own dog food, their success is assured since by definition there are plenty of "beta" dogs who would follow.

But rather than saying that these are "software-related" opportunities, I would say that these are E2C opportunities, building an "E"nterprise to sell to "C"onsumers.

My own opinion is that while these are interesting and highly visible opportunities, they have the fundamental problem that more often than not, you will be competing with "free". It is difficult if not impossible to get consumers to pay, however much they might live to depend on your products and services. So typically the viable business model is advertising, i.e., monetizing eyeballs.

The other side of the coin, and I believe this is the gut of your question, is E2E, building an "E"nterprise to sell to other "E"nterprises.

Then the answer to your question is YES. Someone in your team would need to come from that industry who can be the "surrogate" customer.

My experience with selling to enterprises is that customers are actually not the place you start when you build a company from scratch. They know how to criticize an imperfect product but they have no idea what to do with a perfect PowerPoint. You need to have someone inside your team who has the insights to guide your vision. If that person is you, it is the best.

Hope this helps.

Re: Ask YC: Can you learn an industry without working in it?

#9

Post by gaius » Fri, May 30, 2008, 3:53 PM UTC

The answer to this is that it depends what their problem is. There is a lot of horizontal stuff that is applicable to any industry. You could get a lot of experience building (say) workflow software in one industry and reuse that knowledge in any industry. This is the classic systems analysis approach.

But if that industry uses software to solve problems directly, then you will need domain knowledge. You could be the best C programmer in the world, but without the domain knowledge all you could offer (say) a biotech company would be help in optimizing their code or writing generic functions such as the user interface or the data access. How could you write code to simulate protein folding without knowing it yourself?

Re: Ask YC: Can you learn an industry without working in it?

#10

Post by michael_dorfman » Fri, May 30, 2008, 3:57 PM UTC

foodawg wrote: post #7

michael_dorfman wrote: post #4

Yes, you can. It may be easier if you do work in it, of course, but even that doesn't always help, because you may be mistaking your particular problem with a more general need. The trick (if you can call it that) is to speak to a number of people in different roles in the chosen industry, and try to elicit different problems that need solving. Then, run the results by the others, and listen carefully. Read the trade…

I have to agree with this point. No, you do not have to be part of an industry to do work in it. It will certainly make the proposition very difficult however. One of my YC ideas was a product aimed at the HR industry. I personally have no affiliations with it but my co founder was a part of it. While my ideas were very interesting from a freshness perspective, I was often was off from what our client base wanted the…

The ideal situation in many ways is to partner with somebody from the industry. As you say, this can be a great source of domain knowledge, and contacts. A domain expert with business skills makes a great co-founder; alternately, a trio of techie, domain expert, and business manager.