How do people come up with business ideas? There’s no single answer to this question. For some people, business ideas pop up while taking a shower. For others, it’s while walking. For still others, it’s while driving. The list goes on and on. Those types of situations usually generate new ideas. And as you know, great business ideas do not have to be new ideas. You can make a fortune out of just improving existing products. This article is about how to get inspirations by examining existing business ideas.
While the techniques I’ll outline apply to all types of industries, my primary focus is the Internet. A crucial part of online businesses is that you need to find a good niche. Why is this important? Well, let’s take myspace and facebook, for example. They are really 2 big social networking sites. You might be able to come up with a great feature for networking sites that will make you stand out – if you were to create a new networking site. But it’ll be only a matter of time before those major players integrate the feature into their sites. So your run will not be long – if in fact, it’ll even make it. In the light of this consideration, it makes sense to start looking into something that’s a little bit different from what those social networking sites offer. So what’s the effective way of doing that?
The first thing to think about is the underlying model or purpose of the existing product. Most business models follow a paradigm that usually has two components: a static framework or foundation and a dynamic target or audience. The static component refers to the “verb” used to talk about the business. That is, what the business does. The dynamic component refers to who finds the business useful. For example, Intel Corporation builds [computer] chips. They target personal computers. So I can have a company that builds chips for other electronic devices such as mp3 players, dvd players, etc. The idea is the same (build chips), but the target/audience varies (computers, mp3 players, dvd players). For social networking sites, it’s connecting people together – primarily to share trivial stuff. So the idea is to connect people using some sort of common ground. Well, what if we could use the idea of connecting people and top that with a very specific “ground”? That’s what LinkedIn.com did. They connect professionals.
Google set out to be the search engine for everything. Well, that certainly works. But what if we take the idea of “search engine” and apply it to some specific areas. Indeed.com did exactly that for jobs. They are a search engine for jobs. How time consuming can searching for jobs on various sites be? You go to all these job sites, fill out the same type of forms and clicking to go through the results! The founders of Indeed.com understood the paradigm we describe above and used it well.
So from now on, when looking at existing business ideas, you should ask yourself two essential questions:
1) what’s the foundation/framework of the business or what does it do?
2) who/what’s the target/audience?
Once you have clear answers to those two questions, you’ll be in a great position to determine how – if applicable – you can extend the business idea.
The second point I’d like to make deals with connecting multiple business ideas. You would agree with me that a car dealership is directly related to an auto insurance company. That is, I’ll certainly need auto insurance if I own a car. Thus, some business ideas just go together or converge to a common (well defined) point. If you are able to find that convergence point, then you can create a business out of it. And what makes it even better is that your business can be very viable/sustainable because business usually specialize in specific areas. In other words, the car dealership focuses primarily on selling cars – they are not into auto insurance. Likewise, the auto insurance company deals with insurance matters – no car selling. Let’s take another example. If I buy a new house, I’ll probably need some housing related services like tv, internet, cable, moving, etc. So it makes perfect sense for someone to create a connection point between a real estate agent and housing service providers. So right in there lies a viable business!
To sum it up, you can find business ideas using the following two methods: 1) use the static component and vary the dynamic target of an existing business and 2) create a connection point between directly related businesses. I hope you find these tips useful. If you are interested in the various web 2.0 projects, a good place to check out is feedmyapp.com. They have long lists of the different web 2.0 sites – new amp; old. Look into the business ideas and try applying the techniques outlined in this article.
Good luck in your entrepreneurship endeavors.