Spotting a business trend or forecasting the next viable feeder business doesn’t have to keep you up in a cold sweat at night.
You also don’t have to leave it to the current brotherhood (A-Listers) to pave the way for you.
Look at what the big players in any industry are doing and try to spot a gap in the market that you can fill. So don’t go thinking you have to invent something the world has never seen.
You can build your next income stream around a product that’s already established. By doing this you’re building a feeder business; a business that exists and grows from an existing business.
1. What does a feeder business do?
Feeder businesses ride on the coattails of an established brand or product. They can add functionality, offer more parts for a product, add customization options, offer training or consulting on a product or countless other enhancements.
Let’s get to the next point to better illustrate…
2. What are examples of feeder businesses?
Here are a few examples:
- Jibbitz This is a company that was acquired for $20 million by the shoe manufacturer Crocs™ founded in Colorado. Jibbitz uses rhinestones and other accessories to snap into the holes of Crocs footwear. It’s a business that feeds on the ecosystem Crocs™ created and it all started with a stay-at-home mom.
- i-solditstores.com This company exists because people can’t be bothered to learn how to sell their “treasures” on eBay. What you do is gather up all your junk valuables and drop them off at an “i-soldit on eBay store” and they handle your auction and shipping for you. Without eBay, this business may not have ever been created. Maybe.
- Hyperarts.com and their TabPress application. This company makes it easy for people to create Facebook Pages by using iframes (new Pages won’t use the old FBML format for tabs). Products and services like these sprout up to feed off of a large economic source like Facebook.
It isn’t limited to full-blown companies like some of the examples here. Solopreneurs do things like sell iPad and iPod accessories, cases or screen protectors on auction sites and on their own websites. So, let’s say the main product is the iPod. The feeder business is the individual with her homegrown operation selling screen protectors online.
Give it some thought, I’m sure you can come up with a few examples like these.
3. What can you do with a feeder business?
Start one and sustain it.
Use it as a marketable asset.
If you’ve been bitten by the serial entrepreneur bug then building these feeder businesses and selling them off could be for you. Now, I’m a fan of working for the long haul so I’d rather invest my time building one company (with diversified revenue streams); but to each their own.
If you read the article on Jibbitz that I linked to; I think you see the potential.
Do you fancy yourself the type to build and sell businesses?
This strategy will appeal to you if you’re particularly passionate about the business start-up and early marketing phase until it gains traction. But if you grow bored quickly afterward (and crave the start-up feelings again) then consider selling it off.
With any luck you’re starting to see that to be a leader you don’t have to make the next iPad. You don’t have to create the next Facebook. You just have to lift your head up, look around you, and study the road ahead.
Do you currently run a feeder business? Is there a business trend or new product you’ve spotted that you are going to dive into and make your splash?
Share your great thoughts and questions in the comments.