I preface this post with what Fred Wilson talked about his latest post - to steer away from doing a startup that replicates a framework or model, but in a different industry, for example an Uber for dogs, or an Airbnb for cats. The implicit reason why this is a bad idea is that it fixates the startup in executing a business model, when the startup should be executing a solution. That being said, frameworks are useful tools in analyzing other things - like whether the timing is ripe for a startup to take on an industry.
Over the weekend I encountered the startup Tuft and Needle, a Warby Parker for mattresses. I'm not looking to buy mattresses, but the company made me do one of those "why didn't I think of that!" reactions. I sleep on a mattress every night (mostly), but it was the last industry I had thought of for disruption.
How to be prevent being surprised again? Well, here's a framework I encountered that takes lessons from Warby Parker. Industries ripe for disruption possess:
- Oligopoly market structure
- Insane gross margins
- Opaque and misleading product naming
- Expensive distribution through unpleasant channels
One of the industries that come immediately to mind are luxury watches. In fact, a lot of the traditional luxury industries can fall under this framework as well.
I'd never advocate an entrepreneur build a business around this framework, but in combination with a strong passion about the industry and the understanding that timing is everything, this framework can be useful in thinking about certain businesses.