At the most recent turn of the century, there was a huge pothole that nearly every cell phone manufacturer rolled into. For some, it caused the wheels to come off their business and was the direct cause of shuttering business units. For others, it meant severe financial losses and layoffs. Only a few survived the experience without scars.
What caused the pothole? It was exactly the same motivation as the gold rush of the 1800’s: huge markets to be capture with little effort. Every single one of those cell phone manufacturers dove into the Bluetooth market opportunity headfirst and never looked back. They all believed the market research. That was the key mistake. Never put your belief in the market research. Use it as an indicator, as a tool. But never believe it hook, line, and sinker otherwise you will actually all sink. And that is what happened.
Companies overall have not learned their lessons after the Bluetooth debacle. The all jumped into the “Internet of Things” believing wholeheartedly that every light bulb would have a ZigBee (IEEE 802.15.4-based) chip embedded inside. Huge potential market numbers mesmerize businessmen and so it happened again. This time it was the business units that suffered and were closed down. Companies took losses, many went out of business, and people were forced to hunt for new jobs.
Since then, there are two final “holy grail” markets: (1) healthcare, because everyone needs it and so the number of opportunities abound even if the model is fundamentally flawed, and (2) education.
With everyone at home with their children over the last month, there is a huge focus by companies on the education market. My warning to you is to tread with caution. Homeschooling may or may not take over the world. It may expand in the US beyond the roughly 2 million children (pre-lock-down levels), and it very well may not. Teacher’s unions are among the strongest lobbies out there. They influence every part of government and if their revenue flow is threatened with perhaps as many as 20% of families deciding to keep their children out of in-person schools when all is said and done, then they will fight back. It is much more likely that we are headed into a time of increased education regulation and forced schooling without the loopholes and allowances enjoyed today.
So if you plan to look at the education market, take your time and don’t invest your entire budget. Hedge your bets so you don’t hit the pothole.