6 Niche Markets with the Potential for Success

This may not seem like the best time for a startup, but the global downturn has slowed the runaway train that was Alberta’s economy to a pace allowing plenty of new riders to climb aboard

Workspace and materials are cheaper, even negotiable, commodities; established businesses are amenable to cultivating partnerships for which the boom provided little time or necessity. And, with renewed consumer optimism, increased spending shouldn’t be far behind, especially for a few emerging industry niches. For those with the initiative and that beat-the-odds attitude so vital to entrepreneurialism, here are a handful of potential tickets to success.

Sidebars: The Value of Planning Ahead |  How to Impress an Angel

Pet Services
“My dog’s at a daycare this morning,” says Dar Schwanbeck, managing director of St. Albert’s Northern Alberta Business Incubator (NABI), home to about 40 fledgling businesses. “He’s perfectly OK with his home scenario, but he really enjoys socializing with other dogs.” More than half of all Canadians, pet owners according to pre-recession numbers, understand Schwanbeck completely. Back then, pet-people were pumping $4 billion to $5 billion annually into this industry, and Schwanbeck is convinced there’s still strength there for anyone willing to make a dog’s (or cat’s, or guinea pig’s, or iguana’s) life even easier than it is already.

Randy Thompson isn’t convinced a PhD is the key to success in biotechnology or the life sciences in Alberta. Knowing the basics of cellular or molecular interaction helps, but leaving it to someone else on the team is good, too. “I think what we’re missing is entrepreneurial management,” says Thompson, who heads up the Venture Alberta Forum (no relation to this magazine), a venture capital group that has funded 42 companies since 2004. Right now, non-invasive medical diagnostics are hot; pharmaceuticals, in contrast, are not. “A lot of the things we’re seeing are becoming more patient-driven as opposed to hospital- or drug-driven.” And, mindful of shifting demographics, he adds, “If you can come up with a home therapy solution, you know more baby boomers are going to be interested in that than going to a hospital.”

Functional Foods
Just as the recession isn’t seeing consumers scale back much on the necessities of pet life, it’s not likely affecting how many of us approach well-being. “We’re seeing niche food and niche beverage products, and they’re all coming in with sales of $15,000 to $20,000 a month, moving to $50,000, without ever having to go to Safeway,” says Thompson. Functional food and natural health product retailers already well-established in mainstream markets are providing startup producers with entry points into this growing industry, getting Albertans going on things like bottled water and nutritional supplement projects, both of which have earned the favour of Forum investors.

There is one particularly reliable standby option for the aspiring entrepreneur, says NABI’s Schwanbeck: “Find things to do that nobody else wants to do.” Make life easier with simple solutions to common problems: develop a quick way to clean the crumbs out of my keyboard, kill that wasp nest by my back door, or swing by the house and catch my cat to cut his claws. And be willing to work to get people excited about it, a point at which Schwanbeck has seen too many entrepreneurs fail. Remember the high school dance, he asks? It’s like that: “All the boys had their trendy clothes on and the cologne and their hair was done and the ladies were the same way. The hair and clothes? That’s marketing. But the guy”– or girl – “who crosses the floor and asks for the dance, that’s salesmanship.” Regardless of your product or service, he says, “You’ve got to go ask for the order.”

Game and Training Simulator Development
CTI’s Kevin Dahl is also convinced there’s plenty of room for video game developers in Alberta. One reason is the industry’s recession-resistant nature, thanks to young guys with too much disposable income. The other is that the trail has been blazed. Calgary-based GamesCafe.com, he points out, continually produces some of the world’s most popular “casual” games – simple, highly addictive online video games. What’s more, he adds, with training and safety spinning off into their own niche, those developer skills are just as valuable in coding virtual-reality workplace scenario simulators.

“Society really isn’t willing to go back to the pre-industrialized days when we didn’t burn fossil fuels and didn’t pollute the environment,” says Kevin Dahl of Calgary Technologies Inc., “so, really, technology is the only way we can solve some of the challenges we’re facing.” And while there may be limited room left in green retail, the manager of business networking and cluster development at the Calgary incubator sees growing opportunity in “clean-tech,” whether it’s scrubbing carbon, increasing engine and equipment efficiencies or whatever else reduces the ecological footprint of Alberta’s core industry. Startup may be capital intensive and payoff a long-term goal, but “there’s a huge opportunity in Alberta, where your market is here,” says Dahl, “as opposed to if you were in an area without a lot of oil and gas [activity] taking place.”

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