Are you planning to launch your own startup venture? You must be wondering if you have your eye on the right industry. Beginning your own digital business is not easy, but some startup areas are more promising than others. There are so many things to consider, from market demand to competition. Not to mention the initial capital investment required to start a business…
To help you steer the wheel towards the road to success, we’ve rounded up five of the hottest industries to launch startups in 2020.
1. E-commerce – a growing market with niche opportunities
E-commerce is one of the fastest-growing industries in the world. In 2019, global e-commerce sales amounted to 3.53 trillion USD, and this number is forecasted to nearly double by 2022.
Thanks to e-commerce giants like Amazon, consumers have got used to the convenience of online shopping. All it takes is a click or a tap, and you can get anything delivered in the span of days and sometimes minutes. As the trust towards online retailers and digital transactions grows, it’s becoming harder and harder to find someone who’s never bought anything online.
The growing popularity of internet shopping is good news for entrepreneurs harbouring product ideas. But it’s not just this rapid growth that makes e-commerce a top industry for startups in 2020. Another major advantage is that setting up an e-commerce store requires relatively little initial investment. All you need is a Shopify account and a good strategy to cheaply manufacture or dropship your products.
There’s no denying that the global e-commerce market is super competitive. Don’t even try to outrun the big guys – find a niche to specialise in! If you nail the product-market fit, you’ll be on the right track to building an e-commerce empire.
2. FinTech – a tech trend that’s here to stay
FinTech (or Financial Technology) has been a hot startup industry for years. It has really taken off since the PSD2—an update to the EU’s Payment Services Directive—came into effect in 2018. This new regulation aims to protect consumers during online transactions, and also to promote innovation in the industry through practices such as Open Banking.
One of the effects of PSD2 is that third-parties are allowed to access an individual’s banking data (with the customer’s permission, of course). This is why we’ve seen fintech startups popping up like mushrooms. They’re taking advantage of the fact they are now able to provide financial services that customers need, but traditional banks are failing to provide.
In 2020, competition in the fintech market will no doubt intensify. But if you have an original idea for an app or a service aimed at a specific group of customers, you can still join the party.
Spain, and specifically Barcelona, is very active in the fintech scene and has produced several financial services startups that you can learn from: take Kantox, Verse, Strands, Unnax or Coverfy, for example. It’s definitely an exciting space to watch!
3. Cybersecurity – an essential element of the digital world
The more time we spend online, the more we’re exposing ourselves to data breaches and violations of our digital privacy. In the aftermath of major data privacy scandals like Cambridge Analytica, companies and consumers have become more aware of these risks. Technology is evolving at lightning speed and regulations are slow to catch up. We need as much protection from intruders seeking to abuse our data as we can get.
This state of affairs creates endless opportunities for entrepreneurs willing to bet on cybersecurity and data protection as a business.
Sure, starting a cybersecurity company is no easy feat. You probably can’t do it 100% online, sitting on your living room couch. But you can start by offering consultancy services to local companies, for example, running tests, updating their systems, and just educating them about cybersecurity best practices. Then, as you grow your team, you’ll be able to cover even more ground.
If you can build strong, lasting relationships and get referrals from your clients, you might have a shot at something big. For local examples of innovative cybersecurity ventures, check out Barcelona’s industry-leading Blueliv!
4. FoodTech – a fruitful combination of two industries
Everybody’s gotta eat, right? Well, that’s what entrepreneurs who launch in the foodtech space are banking on. It’s not a bad shout: the restaurant industry is valued at 782 billion dollars in the US alone. And with all its complicated moving parts and traditional outlook, it’s ripe for innovation. From supply chain management, food safety, delivery processes, order management and even the cooking itself, there are plenty of areas to be disrupted.
There are already a number of startups ahead of the curve:
Allplants is a London-based vegan ready-meal delivery and subscription service based in London. Delivering more than half a million meals since 2017, it’s certainly filling some rumbling bellies.
Feedr provides healthy meals to workers for around £5 a day and is disrupting the industry by replacing the traditional staff canteen with food from established vendors from all around London.
Then there’s Huel – or “human fuel” – which sells a food replacement option in the form of a nutritious powder. It’s more appetising than it sounds: it has a range of flavours and it’s sales numbers are impressive, having sold over 40 million units.
Last but not least, we’d like to highlight one of our own graduates navigating the waters of the food startup industry. ESEI Business Management alumnus Alina Demchenko has recently launched a delivery service in Barcelona. Welthy is a meal plan for health-conscious people who want to nourish their bodies with healthy foods but don’t have the time to cook every day.
Of course, there are many more examples, but with such a big market to play in, there’s room for food tech entrepreneurs of all flavours.
5. EdTech – a solution to worldwide problems
If education is something that you’re particularly passionate about, EdTech – or Educational Technology – may just be the startup industry for you. It’s a lucrative industry, with global investments reaching a staggering 16.3 billion USD in 2018.
Just think how many students and teachers you could help by coming up with a disruptive idea and carrying it through. We need so many new solutions for integrating learning with our digital lives, automating processes, making learning more accessible worldwide via online courses and training, and so on.
Startups around the world have started coming up with fascinating projects, such as virtual reality learning experiences, AI-based learning assessment and learning analytics using big data. If you need some inspiration, check out this post on the top edtech startups in Europe.
Which startup industry are you looking to enter? Let us know and don’t forget to check out our Master’s in Digital Entrepreneurship course. We’re here to make your startup dreams come true!