If You Don’t Want To Go It Alone, Try Piggybacking
A friend of mine likes to watch the gold mining shows on cable television. He recently noted how the miners are lucky to break even each year, but the guys who lease heavy equipment and sell replacement parts are making out like bandits.
That story is as old as the California Gold Rush, which played an important role in giving us brands like Levi Strauss, Armour meats and Wells Fargo; and it continues to be played out today, even with some high-tech twists.
The concept is called piggybacking. The idea is to find a fast growing startup or new sector and develop a service that that makes it easier to use, more profitable, or is supportive in some other way.
eBay offshoots
Were you around when eBay originally launched? If so, you may have noticed that it didn’t take long for a whole bevy of businesses to get started that made it easier to post or track your items. As eBay grew, so did the demand for these ancillary businesses.
This phenomenon will continue. If you are looking for a business idea, keep tabs on where the venture capital is going and watch the business pages for stories about startup trends. If you’ve been following the trends, you will know that peer-to-peer enterprises are hot today and consequently, this area is experiencing a lot of piggybacking.
Services to manage your Airbnb listings are being established, for example. How many homeowners really know what their room should rent for or want to deal with booking and cleaning the rentals? This could give local housecleaning companies an area into which they can expand.
Breeze leases cars to Uber and Lyft wannabe-drivers who lack wheels. So far neither Uber nor Lyft have shown interest in leasing vehicles themselves, but this does point out one of the dangers of going “all in” on a piggybacking venture: Eventually the big player in the game may decide to provide the service itself. And if you add in the possibility that the company on which you are piggybacking might go under, it can be a very risky venture.
New laws make new businesses
Just as the creation of a new business model can create piggybacking opportunities in the private sector, in the public sector new laws can create new business opportunities. The upheaval in health care caused by the Affordable Care Act is creating demand for a wide range of new services, such as converting records to a digital format and payments processing.
However, even beyond that, all the newly insured patients flocking to hospitals and clinics are causing significant growth in many parts of our country. Traditional services – even basic needs such as janitorial – can “piggyback” on the growth that is resulting from the law.
With all of this in mind, as you see changes happening around you, whether they are new businesses, new social phenomena or new laws, demand is being created for new products and services that are complementary. Always be watching for those opportunities.
