Stop Competing in Broken Industries — Redefine Them Instead

Stagnant industries are prolific, and they erode customer trust. When environments become stale, and associations with a type of business are hardened and archaic, breaking the mold and inciting interest in your business becomes a losing battle.

Take the gold resale world for example. Images that come to mind include harsh fluorescent lights in unwelcoming environments, confusing pricing with no transparency and lowball offers. How do you break through these associations to establish trust and investment in your brand in spaces like these?

The fact is, category-defining businesses don’t emerge from invention alone — they emerge from moral reconstruction. Real innovation doesn’t always look like a new product, but instead restoring trust where it’s been lost.

Related: 4 Entrepreneurs Who Refreshed Stale Industries and Made Millions

Finding opportunity in dysfunction

Every broken industry shares common DNA: opacity, misaligned incentives and customer fatigue. But the real problem lies in dismissing industries outright for fear of predestined failure. Founders can be inclined to overlook these markets because they seem outdated or “too messy.”

But what if that dysfunction is not a warning light, and instead a ripe opportunity? Where some business leaders may see stagnation and flaws, progressive ones can find possibilities to innovate. That dysfunction is exactly where the opportunity lies — it signals unmet emotional needs, not just economic ones.

In the case of the gold resale industry, The Alloy Market seized this kind of opportunity. In the past, customers associated this kind of business with sleazy practices, and distrust was rampant. We chose to directly combat this expectation with clarity in order to establish trust, offering appraisals based on fair market prices, transparent processes and no hidden fees or shady terms.

Trust as a market advantage

Trust is a common brand value, but it is more than that; it is a structural advantage. Most founders chase efficiency metrics before earning credibility, but in low-trust markets, that’s reversed.

When you establish trust in your business, growth abounds. It reduces acquisition costs, lowering the barrier for attracting customers who believe in your value proposition. It increases word-of-mouth, encouraging consumers to recommend your trustworthy service. And it compounds retention, enhancing the chances your brand becomes the dependable, reputable destination for your product or service in an otherwise unreliable industry.

In this way, the next decade’s category leaders will be those who repair trust faster than others can buy attention.How to redefine a broken market

Of course, redefining a market with negative associations is easier said than done. Repairing a broken industry requires intentional steps and dedication. Leaders will have to work to understand what defines stagnation in a particular industry in the first place and then develop systems to directly combat negative associations.

Related: Don’t Let Your Organization Become Stagnant — Learn How to Innovate with These 5 Tips

The stages of this process look like this:

1. See what others ignore. Naturally, the first step is recognizing opportunities where other founders see a mess. Spend time in areas where customers feel the least respected. It is here that you can leverage trust as an advantage.
2. Map the emotional friction. What factors lead to this industry feeling stagnant in the first place? Every operational failure is rooted in a feeling — confusion, shame, fear or distrust. Identify the problems to better understand where you can strive for redemption.
3. Build systems around clarity. Once you understand the problem, you can work toward the solution. Fix the experience before you scale it. Create systems rooted in transparency that redefine your industry before you focus on growth.
4. Turn consistency into your product. In broken markets, predictability itself is innovation. Simply providing a trustworthy product or service with clarity as your core value can set you apart in a stale industry.

Stale markets are abundant — so opportunity is as well. Opacity is nearly ubiquitous in industries like insurance, healthcare billing and car sales. In my case, the broken market happened to be gold resale, a category that hadn’t changed in decades. Yet potential is endless with imagination and resolve.

Lessons for founders

With Alloy Market, I embraced an industry ripe with mistrust and focused on clarity as a differentiator. The gold resale market was primed for disruption because trust had been lost, and the chance for regaining that trust served as the impetus for Alloy’s growth. The journey taught me important lessons about innovation.

Founders who are interested in disrupting the mold of broken industries should remember these key maxims:

• Trust compounds. You can’t buy it — you earn it, and it scales faster than marketing. A business built on trust grows faster and retains customers better.
• Fix before you flash. Addressing the problems in your industry is always the first step. Know what you need to set yourself apart from untrustworthy competitors. Make the unglamorous parts your differentiator.
• Transparency converts. Clarity builds confidence in your brand. Confidence builds conversion.
• Empathy is efficiency. Redefining a broken market means embracing consumers’ misgivings and directly confronting them. Understanding the customer’s fear saves a thousand service tickets.
• Integrity travels. In a connected world, honesty becomes viral. Trustworthy missions promote businesses that scale readily.

Remember that innovation doesn’t have to come from new ideas, but instead can look like redefining an existing industry.

Related: How Entrepreneurs Can Fuel Innovation and Push Societal Limits

Reckoning with trust

While certain industries may come to mind when you think of stagnation and mistrust, the truth is that every industry will face its reckoning in this regard. Skepticism is rampant in today’s world, and business leaders need to face this head-on.

The founders who step into spaces where suspicion is baked into the characterization of a market — not with gimmicks, but with genuine care — define their categories. Clarity is important in establishing trust, and sincerity is crucial. Empathy for the emotional friction that previously defined an industry set you apart from disreputable competitors. It’s here that you start redefining a market.

The future of disruption isn’t about speed or code. It’s about rebuilding faith one honest transaction at a time.

Stagnant industries are prolific, and they erode customer trust. When environments become stale, and associations with a type of business are hardened and archaic, breaking the mold and inciting interest in your business becomes a losing battle.

Take the gold resale world for example. Images that come to mind include harsh fluorescent lights in unwelcoming environments, confusing pricing with no transparency and lowball offers. How do you break through these associations to establish trust and investment in your brand in spaces like these?