Simple formulas for coming up with the right business ideas19 April 2016 Category:
Note: This article also appeared in Entrepreneur Middle East, and can be viewed on the site here.
The best business ideas are the ones staring us in the face. Yet despite this fact, many would-be entrepreneurs tie themselves up in knots trying to come up with the next big thing, overlooking that which is right in front of them. Why? Because they’re usually searching for it way outside of their own frame of reference, as if the industry they are in or the skills they currently use to perform their job are not the obvious conduits for the idea that could lead to the founding of a potentially successful business.
And that is what I mean when I say “staring us in the face.” Your own space – again, your industry or the job skill you have learned so well – is what you “own”, and where you should first look.
Now sure, none of this is to say there is no chance of success in a field that you are unfamiliar with. Sometimes a business opportunity is there for the taking, and as an astute business person there is no reason why you shouldn’t grab it and run with it. There are many examples of people who have done this – none of the founders of Airbnb or Uber had experience in the hospitality or taxi industries, for example.
But let’s be clear that opportunities of that ilk are rare, and market and industry experience is a vital tool that we need to make the most of if we are going to have a fair shot at this business startup thing. By focusing on an industry you already know well, it goes far beyond simply having “done your research”. That intimate knowledge you possess means you understand with absolute clarity the needs that exist among the clients you deal with daily, and it is within those needs that other needs evolve – needs that lead to new and better business ideas.
If you are serious about starting a business, then your intimate knowledge of the industry in which you work should be your first point of call when considering a direction.
In this article I focus on three simple formulas for coming up with that business idea within our own comfort zone. I am assuming that I am talking to you as an employee – one who is looking to venture out alone. What can you take from your own experience, from an industry you know well, or from your current role (as a human resource or finance professional, for example) that can blossom into a standalone business opportunity?
Upon closer review the answer might be a lot clearer than you think.
1. Listen to your clients
As I hinted at above, if you want to know what is happening in the market, there is no better place to start than with a closer look at the clients of the company you work for. Your products or services are solving their problems, and your company is making money off of solving those problems. So it goes without saying that those clients are the absolute number one idea-generator for you.
In every product or service there are shortcomings. Or to put it another way, products and services across all industries are constantly evolving to meet the constantly evolving needs of the customers. And every so often a “big hole” in the market is spotted as a new need pops up or a shortcoming is suddenly revealed. All of this no doubt presents many opportunities for the entrepreneur looking to strike out on his or her own.
So if you are able to (that is, if you have such a job role) speak with your company’s clients regularly, then do so. Ask questions that will help you uncover unfilled needs, and then when you think you’ve got something good enough, do not hesitate, simply go for it. Launch your own business.
A neat example of this in action is actually a sort of “reverse application” of it, which led to the founding of invoicing app company Invoice2Go. As a small business owner, Chris Stroud felt like the company behind his invoicing software simply wasn’t listening to his complaints about the product not meeting all his needs. And so Chris, seeing a massive opportunity (that is, realising that many other small business owners like him had similar needs that were not being met), took matters into his own hands and launched Invoice2Go. By 2013, the company had received $35 million in funding.
2. Copy your competitors – but do it better
Competition is everywhere, and while it is important to set yourself apart from your competition, this does not have to be simply by “being different”. You can also do it simply by “being better”.
One way to come up with business ideas is to keep a close eye on the competitors of the company you work for. In so doing, you may spot a product or service of theirs that makes good sense to you, but is just not catching fire in the market. Look more closely, and you may conclude that the reason it is not doing so well is because of the execution. That is, it is the victim of a “half-hearted effort”.
Always remember that ideas are a dime a dozen, but skilfully executing those ideas is the real key to entrepreneurial success. If you see a competitor doing a poor job at what you think is a great idea, then that could be your chance to launch.
We in fact see this all the time. And in no small examples. Case in point: In a 2004 article, Mark Zuckerberg acknowledged that the popular social network of the time, Friendster, was in fact the model on which Facebook was built. Fast forward to 2015 and Friendster is dead, while Facebook is, at the time of this writing, enjoying a market cap of $320 billion.
Ideas are a dime a dozen, but skilfully executing those ideas is the real key to entrepreneurial success.
3. Hold workshops
You don’t always have to quietly observe your company’s clients or company’s competitors while waiting for those ideas to reveal themselves. You can also take the initiative through workshops.
Workshops are a great opportunity to get a cross-section of your industry’s clients in a room to talk about what ails them. Walk through the customer journey with them, getting them to discuss in detail the challenges they face. With such an audience all sitting together, you will have the ultimate brainstorming platform. You can encourage the group to not only identify the challenges that are not being met, but get them to help in identifying solutions – solutions that may be the foundation for you to launch your own company.
To prep for a workshop, think through your structure and questions smartly, ensuring that yes, they will lead to discussions that will help you get the info you need. You may already have a potential business idea in mind, and so may want to test out that theory in the workshop. Or you may have no business ideas whatsoever and will want to steer things in such a way that will allow for a collection of a number of potential business ideas. Whatever the case, just own the workshop throughout, because they often have the tendency to run away from you.
The eureka moment
Entrepreneurs are always looking for the next big thing, and it is rather easy to, during a little bit of daydreaming, come up with an idea we think is going to be the next Facebook or Uber. And sure, it happens that those ideas on those one-in-a-million (or more like 100 million) occasions turn into a billion-dollar company.
But the reality, as I mentioned at the outset, is something very different for 99% of company founders. For most, success will lie in sticking very close to home. The majority of entrepreneurs will find their fortunes in the familiar – although that certainly can mean making some creative leaps. For example, an HR consultant working at a recruiting firm may have a brilliant idea for a virtual reality application that can aid in the human resources process. That is in a way a very direct leap, albeit to unfamiliar territory (i.e., a very advanced technology).
Just embrace the expertise you possess – in whatever industry and for whatever job type. Be proud of it. And if you are entrepreneurially inclined and keen to go out on your own, use that pride to begin your idea search.
About the author
Neil Petch; Chairman at Virtugroup
With a history of business successes, Neil Petch is well known in the UAE and beyond as a visionary entrepreneur with a passion for helping others establish and grow their own businesses. Neil founded Virtuzone in 2009 and quickly established it as the region’s leading company formation expert, before launching Virtugroup, a holding company that has a wider mandate of supporting startups from establishment; to successful market entry; and all the way through to exit.