Founders and early-stage capital providers have been talking about “disruption” since the Web 1.0 boom of the late 1990s. Over the past 10 years or so, the term has crept into the popular lexicon, and by now basically anyone paying attention to the space understands the power of the “disruptor” business model.
This long history of talking about (and actually doing) disruption begs the question of whether there’s anything left to disrupt. Are we in the midst of a “disruption drought,” or do some industries remain in need of a fundamental reset?
For the most part, it’s the latter. Disruption is a process, not an event, and new opportunities are always emerging. At the same time, many industries still haven’t seen real disruption, despite incremental innovations. Experienced venture capital teams like Target Global know how to spot these industries and take advantage of the opportunities they offer.
Here’s what they’re seeing on the ground right now.
Car Buying and Selling
Shopping for a new car is fun for many of us. Actually going through the process of buying one, not so much. Auto dealers consistently receive poor marks for customer service, sales, and the overall buying and trade-in experience.
Unfortunately, aside from a few notable exceptions like Tesla, the basic dealership-centered car-buying model has changed little since the 20th century. Sure, digital vehicle listings and electronic communication technology have streamlined the process a bit, but fundamental changes are few and far between.
That could finally be changing thanks to startups like Auto1, which have more ambitious plans to remake the industry. Coupled with regulatory changes that reduce sales friction, these companies could soon make the prospect of buying a new car a great deal more enjoyable.
Urban Mobility
Scooters, e-bikes, ride-hailing apps, and other innovations have improved urban mobility since the 2000s. However, important gaps and friction points remain. The next wave of urban mobility solutions will focus on filling these gaps and making existing solutions — including the three already mentioned as well as traditional public transportation — more accessible and user-friendly for all.
Last-Mile Logistics
Outside of specific industries, such as food delivery, the rise of the smartphone hasn’t changed the logistics business very much. As with automotive sales, that could be changing as digital sellers focus on rapid, flexible doorstep delivery. In the farther future, true disruption could happen thanks to drones and other types of autonomous delivery systems, but we’re first likely to see a new push for AI-enabled, behind-the-scenes efficiencies.
Brick-and-Mortar Retail
Brick-and-mortar retailers face a formidable array of challenges, leading some to ask whether the industry has a future at all. Yet a closer look reveals opportunities hidden among the pitfalls. These include more responsive, location-based marketing; friction-free omnichannel sales; smart displays that inform and encourage buying decisions; and new payment and financing models.
Restaurants
The restaurant industry also faces big challenges due to changing customer preferences and steadily rising labor costs, among others. Like retail, its future success may depend on more seamless technology integration and automation to reduce sales friction and improve the customer experience.
Bottom Line
If this list seems a bit, well, boring to you, maybe that’s the point. Many of the industries that haven’t yet experienced massive technology-fueled disruption are big, well-established sectors. In some cases, like automotive sales, restaurants, and urban mobility, they have many risk-averse incumbent businesses as well as structural barriers to deployment of game-changing new solutions.
The glass-half-full way to look at this is that disruption comes for every industry sooner or later. Some are just slower to experience it. If you buy that, it wouldn’t be wise to bet in the long run on the incumbent solutions in any of these five industries.
