In business, the idea is the main thing. Capital can be raised and lost and raised again, but lose the idea and everything is lost. ’Gottlieb Duttweiler ‘Opportunity is missed by most because it’s dressed in overalls and looks like hard work.’
Commercial enterprise is not about sellers, it’s about buyers (customers). The idea is to match the wants and needs of customers with the interests and passion of the entrepreneur. This can be a time-consuming process.
The owner and operator of Equation Business Solutions in Cape Town, South Africa says that exploring a subject or product that the entrepreneur is familiar with (or curious about) is a good place to begin. Other suggestions include searching through the Yellow Pages to find an existing idea that can be copied or expanded upon. Edwin Land, the inventor of Polaroid photography, once said that the best way to have a new idea is to stop thinking in terms of old ideas. In this regard, perhaps combining different professions can yield a result. An interest in accounting and boating, for example, might be fused together to provide accounting services to the boating industry. Or maybe experience with software and knowledge of transportation networks can be merged to create a new service for suppliers or distributors. Additional options include examining both sides of an existing opportunity. For instance, security and private-police services make up the world’s fastest growing industry, so perhaps a copycat security service can be developed; or maybe a marketable idea that reduces the circumstances behind the need for more security is a better option. Other methods of searching for potential markets involve visiting areas with an economic level or geographic location of personal interest to see if it has a needy segment – or investigating the commercial aspects of a field or subject that appears interesting. The challenge for the entrepreneur is to match personal skills, interests, and capabilities with an inherent passion and tie it in to an underserved customer base. Following is a list of questions designed to help do just that:
− What do I enjoy doing the most? Doing something enjoyable is a good way to ignite commitment and possibly uncover an idea that will prove profitable. For example, Cathy started small and insists she wants to stay small so she can focus on her clients and avoid too many administrative duties – thereby allowing her to do what she loves most, which is play with children.
− What are my hobbies and/or interests? Anything from growing roses to personalizing software programs to building model ships can be turned into a profitable business if the circumstances are right – either by teaching others how to do it, by packaging and selling what is created, or by selling related products to fellow enthusiasts. For example, quite a number of multi-million-dollar computer companies (Apple, Dell, Microsoft…) were started by ‘computer nerds’ who turned their computing interests into selling marketable computing products and services to similar enthusiasts.
− What subject(s) or pastimes did I enjoy in college (or high school)? Think back to your student years. Can the one or two subjects you found most fascinating be turned into a money-making idea? With a little thought and effort they just might. For example, Hewlett-Packard was formed by two Stanford students (Dave Packard and Bill Hewlett) who had a passion for electronics. One of their first products, an audio oscillator, was purchased by Walt Disney for the making of Fantasia. Then there’s Gary Comer. With no more than a high school education and a love of sailing, Gary started a business that supplied sailing equipment to fellow enthusiasts. The name of that business? Mail order giant, Lands’ End.
− What marketable experience, knowledge, or skills do I possess? Almost everyone possesses a skill or knowledge that has the potential to make money. For example, Snap-On Tools began when machinists Joe Johnson and William Seidemann fashioned together a set of interchangeable sockets and wrench handles to make their job easier. The company where they worked rejected their idea out of hand, but being experienced machinists Johnson and Seidemann knew their idea was a sound one so they developed it on their own. In another example, fast food manager R. David Thomas helped Colonel Sanders succeed with his Kentucky Fried Chicken franchise then went on to use the additional experience he gained to start the Wendy’s burger chain (named after his daughter). Further examples of using personal skills to create a new business include ‘mash-up’ operations that combine different web-based tools to create new search and software possibilities or teaching-based operations that show others how to use digital photo software (or any new software for that matter). Technical processing or data collection services as well as services that provide creative design work for documents, menus, or marketing provide additional examples.
− Have I ever looked at another business or product and thought ‘I can do better than that!’ Many successful businesses get started because they’re better than what their competitors offer in terms of service, quality, location, speed, or uniqueness. When Kemmons Wilson was charged an additional fee at a roadside motel for each of his five children he became so upset he started Holiday Inn. Polish immigrant Rueben Mattus, a high school dropout who scratched a meager living selling ice cream in Brooklyn, New York, suffered through years of price wars, cut-throat competition, and ingredient shortages caused by World War II before he finally decided to fight his competitors by developing an ice cream that didn’t skimp on ingredients. After coming to the conclusion that many people in America hated the Irish, the Italians, the Poles, and the Jews, Mattus came up with the fictitious Danish-sounding name of Haagen-Dazs (he reasoned that no one hated the Danes) and took over a niche luxury-food market that had previously not been considered. In New York, dry-cleaning equipment salesman Leon Hirsch was milling around a patent broker’s office when he noticed an ungainly surgical stapler that had been invented decades earlier. Fascinated, he bought the licensing rights to the tool, improved its performance, and started The United States Surgical Corporation (it became a Fortune 500 company). Simply put, people will usually pay good money for products or services that in some way improve upon what’s currently on the market.
− Are the people in my community asking for, or in need of, a product or service? For centuries, perceptive entrepreneurs have known that products or services that are needed or wanted are sure-fire money makers. That’s how Levi Strauss (of ‘blue jeans’ fame) got his start in the clothing industry. Strauss immigrated to the United States to start a dry goods business, but after landing in California he quickly discovered that most miners were desperate for clothing that could withstand the rigors of the mining trade. Not wanting to pass up this opportunity (and not finding anything on the market to fit the bill), he fashioned a pair of trousers out of canvas, used rivets to hold the seams together, and created the ‘501 Blue Jean’. Avon Cosmetics was founded by book salesman David McConnell who quickly discovered that the free perfume samples he gave to women were more popular than his books. Decades later, Tom Fatjo and Louis Walters sensed that changing environmental laws were going to create opportunities for garbage collection so they bought a specialized garbage truck to help fill the needs of their community. Thirteen years passed during which time their business, Browning-Ferris, became the second largest waste disposal company in America. Lastly, the Kaiser supermarket in Berlin, Germany realized that most of the city’s population would be over the age of 50 by 2010, is now raking in newfound profits thanks to a store designed specifically for the elderly. The store includes non-slip floors, wider aisles, magnifying glasses attached to shopping carts (to help read product labels), and steps lining the aisles so customers can reach items on high shelves.
− What will make the world (or my neighbourhood) a better place? New ways of thinking that can help the world become a better place to live can lead to much entrepreneurial success.
For example, Anita Roddick founded the Body Shop because she was upset by the fact that most cosmetics were tested on animals by squirting chemicals directly into their eyes. Her idea was to set up a company that sold beauty products free from animal testing. One hundred years earlier, the Borden food company came up with a winning idea that made the world safer when founder Gail Borden witnessed a number of infant deaths from putrefied milk and saw the need for a non-perishable substitute. Borden’s creative thinking and determination led to the discovery of condensed milk. The clockwork radio, a wind-up device invented by Trevor Baylis so people in remote places (without access to batteries) have the ability to stay in touch with the rest of the world, became a worldwide testament to innovation and persistence (a wind-up laptop computer has also been developed based on this concept). The water-purifying drinking straw, packed with filtration aids, is yet another life-saving device designed to assist people in time of need. Over the past few decades, farmers and livestock breeders have capitalized on markets that pay top prices for eco-friendly, organic products. The point here is that opportunities exist for entrepreneurs who invent or innovate new products or services, increase efficiency, develop safe product alternatives, improve work systems or manufacturing processes, or find ways to produce products that are easier on the environment and healthier for customers.
− Is there an obvious problem out there just waiting for a solution? With so many people concerned about clean, cheap energy (and the environment), business ventures that provide an alternative to dirty and expensive energy practices are proving to be real money-spinners For example, in 2005, Scottish entrepreneur David Gordon was exiting a meeting in Glasgow, Scotland when he noticed a tree swaying in the wind next to an apartment building. He began thinking about how the energy moving the tree could be harnessed to provide power for the building and he quickly realized that somebody somewhere would probably make a fortune from wind power. He wanted that someone to be him. After doing some research, Gordon visualized a wind turbine small enough to fit on the top of a house or building. His next move was to develop a patented ‘inverter’ that pumps the turbine’s electricity straight into a building’s power structure. A range of products and services followed to complement the sustainable energy sector that’s being capitalizing on – including offering customers help with financing. The result? In his first year of business Gordon sold over 18,000 Windsave turbines at a price of around $4,400 per unit (Farrow, 2007), but it has not been smooth sailing; the company experienced many ups and downs along its way due to the pioneering aspect of its product. Indeed, due to a series of quality control issues and other problems, it is difficult to ascertain if the company is still in business. Meanwhile, in Eskilstuna, Sweden a new shopping mall (ReTuna Återbruksgalleria) opened in early 2017. ‘The facilities contain both a recycling center and a shopping mall. Customers can donate the items that they no longer need, and shop for something new – all in one stop. Dropped off goods are sorted into various workshops where they are refurbished or repaired accordingly. Products are then sorted into 14 specialty shops that include furniture, computers, audio equipment, clothes, toys, bikes, and gardening and building materials; all garnered from second-hand products. The center also includes a café and restaurant with a focus on organic products, as well as a conference and exhibition facility complete with a school for studying recycling’ (Ghent 2017).
− Is there a current product or service on the market I truly believe in? Business ideas do not have to be original. Sometimes an old idea can be copied and introduced into a new market to astonishing effect. For example, after witnessing Domino’s Pizza’s quick home deliveries in his travels through the United States, Leopoldo Pujals returned to Spain, set up a similar operation in 1987, and named it TelePizza. By 2010, the company had opened 1,025 outlets around the world. In April 2016, the company completed an IPO worth around €550-million. In the United States, Cheri Faith Woodward started the Faith Mountain Company, a $20-million mail-order business that distributes herbs, dried flowers, kitchen implements and handicrafts. Although Woodward learned her trade from a local woman who had been sharing her knowledge with others for decades, it was Woodward that turned this knowledge into a business. After 25-years of business, the company closed and sold its mailing list and database, which contained the names and addresses of over 1.7-million customers.
− What do the people or customers in my current job complain about (or want) the most? Unhappy customers can unwittingly uncover vast opportunities – if they’re taken seriously and if someone takes the time to listen to them. For example, Buster Brown shoes came into being when shoe salesman George Warren Brown heard people complaining that most shoe fashions were staid. At this point in time (1878), the entire American shoe industry was located in New England so Brown developed a line of shoes that catered to his local market. Within a few years his products were being sold coast to coast. More recently, a corporate executive in London, England overheard several complaints circulating in his office about how difficult it was to find a good plumber. Intrigued by the notion of setting out on his own and working with his hands, he took a course in plumbing, became a registered plumber, and set up his own business. He now makes about the same money per year as a plumber compared with what he made as an executive.
− Is there a need for a product or service in an underserved market? Too many small markets are ignored by business communities because of prejudice, ignorance, outdated misconceptions, or just plain laziness. Consider the GrameenPhone telecommunications company in Bangladesh, which was assisted in its start-up phase by Nobel Prize winner Mohammad Yunus. GrameenPhone (‘Gram’ means village) began selling mobile phones to impoverished communities in 1997. Instead of sticking with the traditional business model of selling one phone at a time to a customer (which is impossible to do in a country where the average yearly income is only $286), a new business model was established in which a single mobile phone is leased to a village and shared by dozens of people. Six years later, with this innovative service having expanded to include over 50-million people, GrameenPhone produced revenues of $330-million per annum. Future revenues are expected to rise to half a billion dollars. Equally as important, by providing poor regions with a much-needed phone service, farmers and local businesspeople now have the ability to sell their products on a timelier basis. The resulting rise in income levels has lifted many customers out of abject squalor – and all because an astute entrepreneur named Iqbal Quadir took the time to figure out how the selling of a useful product could be modified to fit a needy market.
− Is there a type of person, group, or customer base I connect with? Those who enjoy working with the elderly, an ethnic group, hobbyists, children, mountain climbers, basketball players, or any form of potential customer probably harbor an above-average ability to talk with them, discover what it is they need or want, and learn ways to serve them. That’s how Daniel Gerber, son of the president of the Fremont Canning Company in Michigan, came up with his revolutionary idea of selling baby food. Gerber never thought much about parents with small children until his wife had a baby. Only then did he realize how difficult it was to prepare and strain baby food. After confirming this with countless parents he used his father’s machinery to develop food products for infants. Eventually his idea became so successful the company abandoned its adult line and concentrated solely on making baby food. In another example, the all-female Pink Taxi service in Moscow, Russia began life when entrepreneur Olga Fomina discovered that a lot of women don’t like to ride in taxis because most taxi drivers are men and men are the perpetrators of most assaults on women. Her business idea was to start a taxi service that only caters to women – a business model that has spawned similar all-female taxi businesses in many other countries.