Niches, Riches

"Niche down" is a popular saying among small business entrepreneurs, serving as short hand for "dominate a small piece of the market before moving to another." This week, we wanted to bring your attention to a wonderful example of how one entrepreneur spotted a growing need in the data privacy niche and built a billion dollar business in the process. Kabir Barday, founder of OneTrust, had a first-hand view of where data privacy policy was heading and decided that this was his niche to own. Here are 3 key lessons that are worth reflecting on for SMB owners and entrepreneurs:

Recognizing an opportunity is always preceeded by work in a related field.  Prior to founding OneTrust, Barday worked in the data privacy field at AirWatch, a data privacy firm specializing in securing mobile phones for large employers as personal phones were increasingly being used to conduct business on behalf of corporations. Turns out, he was in the right place at the right time. But that was only half of the story:

"Barday, who comes off as equal parts soft-spoken and swaggering, recognized a colossal market in its infancy. How he seized the opportunity is a lesson in diligent prep, great timing, and aggressive action."

Find, then own, your niche. From Barday's vantage point, he realized that this niche market of data privacy and compliance was growing rapidly and saw a gap between the solutions being offered and marketplace needs. The potential customers were easily identifiable, easily accessible, and had an underserved need in a fast growing market:

"There may be sexier tech companies out there that generate more headlines than OneTrust. But in pure business terms, there's nothing sexier than quietly amassing control of a deep niche that just keeps getting deeper."

Pursue what you are uniquely positioned to dominate. Barday had dreams of striking out on his own and even mulled over the idea of opening up Pizza Studio franchises across the Southeast. But after reflection, he realized he wasn't uniquely suited for franchising. Instead, he decided to pursue the nascent opportunity of data privacy.

We believe this last lesson is the most critical to consistent success over time for business owners. All business owners must reflect on what makes them truly different. At Permanent Equity, we realize that many can buy a business, so what makes us unique? Ultimately, we rely on our reputation as long-term partners with some rare and valuable skills, and a permanent capital base to close transactions with no intention of selling. In a sea of potential buyers, we offer a unique and alternative solution for a business in search of a permanent home. Not every business will fit this description, but for those that do, we strive to be best in class. 

'A growth industry like I've never seen': inside America's no. 1 fastest-growing company (Inc. Magazine)

+ "Atlanta-based OneTrust, which landed at No. 1 on this year's Inc. 5000, with more than $70 million in 2019 revenue and a staggering 48,337.2 percent three-year growth rate, is among the global leaders in privacy-law-compliance technology. In the most straightforward terms, OneTrust builds a suite of digital tools that gives companies a clearer view of all the user data they accumulate. This enables them to comply with privacy laws, like the European Union's General Data Protection Regulation (GDPR), that give consumers greater control of how and whether com­panies use their data. Before lawmakers began to take notice of consumer complaints about data misuse, most companies simply didn't have dedicated technology for managing their users' privacy. Now they must."

Amazon and mall operator look at turning Sears, J.C. Penney Stores into fulfillment centers (Wall Street Journal)

+ "A number of U.S. malls are already doing business with Amazon, such as renting parking lots to Amazon’s huge van fleets. But for Simon to lease a large, well-located indoor location would be the rare instance of a major mall operator offering prime retail space to Amazon. “To replace department stores, mall owners considered schools, medical offices and senior living,” said Camille Renshaw, chief executive officer of B+E, a real-estate investment brokerage firm. “With the current pandemic, industrial is the only thing left now.”"

How to become the linchpin in your ecommerce supply chain (Jay Vasantharajah)

+ "Phil Knight, the founder of Nike, had $0 sales and his company was just him and his running coach when he met with Onitsuka Co. in Japan. Yet, he was able to persuade them to give him exclusive distribution rights to sell Tiger shoes in the US. The supply chain is an underrated area of eCommerce that doesn’t get much love. Optimizing it can give your company a huge advantage, especially if you’re able to achieve a negative cash conversion cycle."

Ryan Reynolds sells his Aviation Gin brand for $610M (Forbes)

+ "The company already owns some of the top-selling names in the category—including Tanqueray and Gordon’s. But these are fairly traditional London Dry bottlings. With this latest addition Diageo is obviously hoping to court a new audience. Namely: millennial consumers who are compelled by the more accessible tonalities of so-called ‘New World Gin.’"

How restaurants got crushed by covid, by the numbers (Marker Media)

+ "15,770: That’s how many restaurants listed on business review platform Yelp have permanently closed since March 1. That accounts for 60% of the 26,160 total closures of restaurants on the platform. Plus, 44% of the 5,454 closed bars and nightclubs listed on Yelp have permanently shut as well."

Inside the barbershops keeping the NBA shaped up in the bubble (GQ)

+ ""We’re giving them two or three weeks’ notice, and then they have to go tell their wife and kids and business partners, “Hey, I’m going to be gone for a month and a half.” So that weeded a lot of people out fast. And then even though the accommodations are nice, it’s still a bubble. It’s isolating. You can’t go anywhere. You can’t go to the store, you can’t see your family, you’ve got to be right there for four to six weeks or even longer. There’s all this uncertainty—it’s an unprecedented situation, nobody’s ever done this before. So the six barbers, three stylists, and three nail technicians I was able to select, they all took this as a blessing and an opportunity to both grow their brands and do something that’s never been done before, to be a part of history."

Companies strain to outdo each other with work-from-home perks (Wall Street Journal)

+ "“Yay, let’s do this people!” urged Amy Schnall, the director of executive operations, on a recent Thursday afternoon, raising a glass of sauvignon blanc and speaking to remote workers over Zoom. And so began the company’s first virtual ukulele-building class. DIY ukulele kits had been sent to employees’ homes and a hired music teacher took over the Zoom call for a pep talk."

George Wu on negotiating over Zoom (Chicago Booth Review)

+ "Many experienced negotiators have honed their skills for a specific negotiation context: in-person meetings, where reading the room and observing body language can be important elements to building trust and achieving success. But the pandemic has made in-person negotiating difficult or impossible for many people, and even after the health threat subsides, the business community's new collective fluency with Zoom may make remote negotiation more common than it was before."

Yes, some Boeing 747s still run on floppy disks (Popular Mechanics)

+ "The 747s in question, from British Airways, include calculation-heavy, but graphics-low software that aids with flight mechanics. “Pen Test Partners discovered a 3.5-inch floppy disk drive in the cockpit, which is used to load important navigation databases,” The Verge reports. And that actually makes sense. The entire text of Moby-Dick, stored as a plaintext file with all the Project Gutenberg trimmings, is just 1.2 megabytes."

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