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3 Proven Ways Your Business Can Disrupt That Well-Established Industry It's Struggling to Enter

You're far more likely to succeed if your business disrupts an existing industry rather than starts a new industry from scratch.

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Our world has no shortage of entrepreneurs: As Entrepreneur's Grace Reader wrote, citing Kauffman startup index data, each month, about 550,000 ambitious souls launch a . And all these entrepreneurs no doubt fight for a chance to be the best at what they do, in the market where they do it -- from baking the best pastries in town to creating a to rival that of or Instagram.

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Related: Want to Disrupt an Entire Industry? Here Are 3 Tips From the Future.

Sadly, though, 20 percent of businesses fail in their first year of operation and only 50 percent make it into their fifth year, according to the U.S. Small Business Administration Office Of Advocacy. And that reflects what we already know: Most market segments are filled to the brim with competition.

The good news is that you can still outsmart the competitors in your industry, no matter how crowded it may be. Determined and savvy startups find their footing in crammed markets all the time (think: Uber, Zapier or , which were all startups not so long ago). Sure, it takes time and muscle, but it's certainly possible. You just have to know how to do it.

Here are three proven ways to disrupt a well-established industry:

1. Put the power back in your customers' hands.

Big businesses have massive budgets, hundreds or thousands of employees and a collective bandwidth that makes most operations look puny. Of course they also have thousands or millions of customers that trust them.

In short: They're big, powerful, and scary.

Sometimes, though, business size creates an environment where customers or users lose control over the business's product. Given the power of big data and of the high-level managers making the decisions, customers may start to feel that they've been left out to dry. Which might be why 42 percent of consumers claim to distrust big brands, according to research by Ipsos Connect and Trinity Mirror Solutions.

In this regard, 36 percent of smartphone users said they agreed with the statement, "I know that by agreeing to the terms and conditions I am giving permission for them to use my personal data, but I don't feel like I have a choice," according to research by Mobile Ecosystem Forum.

That kind of consumer frustration is also the likely reason why companies like Uber and AirBnB were able to exploit their respective bloated taxi and hotel industry segments by putting power back into consumers' hands. They gave the user more options and created a free-market review system around drivers, hosts and users, all of which encourages better-quality service. Already, Uber reports having 91 million riders and three million drivers. And AirBnB reports 500 million guest arrivals to date.

2. Target an under-served market.

Every business has a target market. And, as time moves forward, that market adapts, user demands change, and only some big industry competitors keep up (after all, most are big and cumbersome, and change is hard).

Think of the CEO of Blockbuster, Jim Keyes, and his famous last words to The Motley Fool in 2008: "Neither RedBox nor Netflix are even on the radar screen in terms of competition." His market was changing, and big ol' Blockbuster wasn't willing to adapt, so it died, allowing companies like Hulu, RedBox (for a time) and Netflix to take its place.

Related: Nobody's Listening. Here's How to Actually Disrupt an Industry.

Also consider the current environment. Monkey -- a new social media app that grew more than 1,200 percent in 2017, (as Inc. reported) -- believes that other have failed to adapt to the needs of a growing market. Specifically, Gen Z. Millennials grew up with Facebook and Instagram and still use those platforms regularly, but today only 9 percent of teens list Facebook as their preferred social media platform, according to Business Insider. Monkey seeks to attract that same younger, under-served market by incorporating Gen Z-specific fashion and pop culture right into its app.

As Allen Loh, the head of growth at Monkey, explained to me in an email: "Gen Z grew up with the front-facing camera and being proud of their favorite streetwear brands like Off-White and Supreme. You can't be cool to both the parent and the teenager at the same time. You need to create an ecosystem where teens feel exclusive to the older generation and [where] the brand really gets them. And fashion is one of the best ways to connect."

Is it working? Well, it seems to be. Monkey currently sits at No. 8 in the iOS U.S. Social Ranking Chart, as reported by SensorTower, with 85 percent of its user base under the age of 22, according to Inc. Your business can do the same thing: Fnd a market that big competitors are neglecting and serve its members better. You might just find yourself at the top of the pack.

3. Reverse your market's typical business model.

When an industry grows large and well established, typically a single recurring business model crops up. Take the social media industry, for example. Nearly all its existing platforms allow you to create an account for free, but users must sacrifice their personal data to advertisers, in return. Facebook's real "customer," after all, is the advertiser … and the user is the product.

Consumers don't like that business model very much: According to Pew Research Center, 91 percent of Americans surveyed agreed or strongly agreed that consumers have lost control over how their personal data is collected and used by social media companies, and a shocking 80 percent of people expressed concern about what they saw as flippant use of their personal information.

This negative consumer response is opening a gap for new startups and services to rise through the ranks: RED now allows viewers to pay for a subscription and eliminate all advertisements from YouTube videos they watch. And, flipping the script, is a search engine rising in popularity apparently because it doesn't profit from searchers' data the way Google, Bing, and Yahoo! do.

In an inerview, Jag Singh, the founder of Vid -- a social media app that allows users to monetize from their own content (the way advertisers typically do) and even choose what content the app can and can't see -- expanded my understanding of this concept. "I think that when you see an industry which is using consumers to profit, rather than serving those consumers, I think that's an easy industry for entrepreneurs to exploit," Singh said. "All you have to do is flip the business model and make the consumer the customer again rather than the product. And consumers crave that."

Related: Why Disrupting an Industry Is Overrated

So, again, let's suppose you're trying to grow a thriving business in a busy market. By using the three lessons above, you can pull it off. Remember, put the power back in the customer's hands, target an under-served market, or flip the popular business model on its head. That way, you might just become one of the well-established industry competitors yourself.

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