The more sexually attractive the business is, the more difficult it will be to succeed in it. Here are five reasons.
There’s a joke in the world of wine that says one of the most straightforward methods to make a millionaire is becoming a billionaire, purchasing a vineyard, and creating a wine company.
If you’re looking to take on a start-up project based on your passion, it’s essential to be aware that many of the most desirable sectors are also the most difficult to succeed in.
Here are the five main reasons:
1. Greater Competition
The primary and most obvious explanation for this is that sexy sectors attract many entrepreneurs, which increases competition and makes it challenging to be successful.
Indeed, your interest isn’t likely to be in accounting. It’s more likely that you’ll be associated with, e.g., music or another aspect of the entertainment business. But, this is the case for many people who work in the music industry more competitive than other industries. So, making money or even surviving is a challenge for many businesses involved in the music industry (or any other sexually competitive entertainment sector).
2. People willing to pay for Status
Most wine companies are operating on low-profit margins because many of the super-rich owners run the wine businesses to show their Status instead of making them financially profitable.
This can make life for other wine-related businesses extremely challenging because they must compete against those with plenty of money, strive for the highest quality of their products, and are not concerned about making a profit.
Similar trends are occurring in the soccer industry in Europe in which a large number of billionaires from oil are purchasing and operating soccer clubs for fun without the intention of achieving financial success, making it challenging for other soccer clubs that strive to be competitive and remain profitable since they must manage the high cost of players and other issues.
3. People who are willing to work in exchange for lower-than-average compensation
A significant portion of software developers came into the business because they are passionate about video games. Due to this, the video game business is one of the areas within the tech sector that has the worst conditions for developers. According to Glassdoor, software engineers (in every industry) are paid on average 25 to 50% more than game programmers. Additionally, game developers are known for their overtime hours during busy times.
However, the majority of developers will put up with sub-par conditions to focus on their passion.
4. Winner Gets All Markets
Market-leading companies heavily dominate the majority of the most desirable industries. This is particularly the case in the scalable sectors that have very few obstacles to entry. For instance, a standard in the creative economy states that the top 1% of creators control most markets, whereas the bottom earns hardly any revenue even. E.g., the small number of famous musicians make millions, whereas most musicians struggle to make their passion for music into a job.
Although this applies to individual creators, it’s also the case in many industries where the companies themselves are growing, yet the market has a very low barrier to entry. As an example, the majority of websites struggle to get enough visitors to make a profit.
5. Technological Difficulties
Then some industries are sexually attractive because they have complex problems and have opportunities for transformation if an organization can overcome these issues.
Robotics, artificial intelligence, genomics, etc., are among the most difficult nuts to crack. It is a truth that the majority of new initiatives in these fields will be unsuccessful.