John D. Rockefeller became a billionaire in 1916, when that was real money. Mark Zuckerberg is worth nearly $10 billion today, which is still pretty good. John Bogle turned around Vanguard, a sleepy money management company, with a new idea called index funds and made the firm a global leader in its industry.
What do they have in common? They captured new markets.
The world is stuffed with people who keep the economic machinery running, eking out 4% growth year after year. Good for them—mundane businesses like paper clips and taxi cabs make everyday life easy. But some people do much, much more. They power economic growth.
About one-fifth of U.S. growth over the past two decades has come from new industries: wireless carriers, satellite TV, networking equipment and others. Another big chunk comes from new segments of old industries: extended stay hotel rooms, DVDs by mail, rent-by-the-hour cars, and so on. Strip out those growth sources, and the economy looks pretty boring. Is that your aim
in life, to build a boring business? If so, please stop reading now.
Still here? OK, let’s get to the juicy stuff. How do you capture a new market? There’s a lot of traditional business strategy you need to throw out the window. New markets are too poorly understood and change too quickly for the standard approaches of graphing trend lines and computing market share.