Glenn Kelman, CEO of Redfin, posted a blog article on TechCrunch on Friday discussing Hybrid Business as a new start up trend in 2011 — businesses that have “one foot in the virtual world and one foot in the real world”. The quote that caught my eye was:
“who in technology wants to work with retail bankers, teachers, doctors, restauranteurs? As a result, hybrid businesses have little or no competition: technology companies want nothing to do with the real world, and real-world companies struggle to develop competitive technology.“
We talk about this all the time at BuildASign.com. With most internet “virtual world” start ups you are dealing with a very speculative business environment where there is a ton of competition and competing companies are run by incredibly smart, heavily backed entrepreneurs. Compare this to starting up a hybrid business where the biggest competitors have little to no idea how to take advantage of technology or the Internet, and they are more likely to have entered the business through inheritance than by being passionately disruptive. The result is that savvy entrepreneurs who can stomach getting off the web and into distribution, manufacturing or services will enjoy a simpler and extremely navigable competitive landscape.
More and more industries (both the sexy and not-so-sexy) are moving online or developing a strong online component — I think this is an obvious transition. It is baffling to me why some of the smartest entrepreneurs choose to ignore the lighter competition of an uncrowded not-so-sexy hybrid industry and choose to instead push forward in an incredibly competitive, overcrowded virtual industry. Maybe they just aren’t so smart.
