Ideas to Start a New Business or Product

In my many years of speaking to MBA classes and mentoring young people, the question that comes up the most is How Do I Find An Idea to Start a Business! This same question was put forth asking for ideas to create a new product. I believe the answers are the same as for a company with probably less risk involved. There is no simple answer to this question just as there are multiple ways to solve a business problem. There is no one correct answer as your solution will depend on your resources, the experience and knowledge you bring to the table, the seriousness of the problem, which would dictate how much time you have to solve it, etc. That said, let’s shed some light on answering the question. Here’s my approach.

  • List common answers with pertinent comments on same.
  • Concentrate on what I consider the best answer.
  • Articulate definition of answer and why it engenders public confusion.
  • Explore ways to find and execute answer.
  • Give real life stories of mine to illustrate answers.
  • Summary with different approaches to running your own business

MOST COMMON ANSWERS

(I obtained these from a poll I took and extensive readings.)

  • Find a problem that needs solving.
  • Find a need.
  • Look for a Pain Point. (Most expressed, but to me it sounds like the same as solving a problem.)
  • Find something that can be made or executed better.
  • Find an opportunity and exploit it.
  • Disrupt an industry.

Finding an opportunity in my experience is the best answer. Solving a problem, which is almost the same as finding a need, is a good approach, but not as fruitful as finding an opportunity. My pain point solution is calling my doctor. Disrupting an industry is good but the odds are slim in doing it. Steve Jobs, Bill Gates, Mark Zuckerberg, etc. are huge exceptions. If you are in position to follow them, go for it, but don’t count on it.

Before we look at ways to discover opportunities, let’s define and address the confusion of the word.

Webster defines opportunity as “a favorable appropriate or advantageous combination of circumstances.”

To my mind, an Opportunist would be one who follows and acts on opportunity. However, the dictionary and many in the media define Opportunist differently and negatively. The same dictionary that defined opportunity above says of Opportunist—“A person who exploits circumstances to gain immediate advantage rather than being guided by consistent principles or plans. Most burglaries are committed by causal opportunists.” Others add “Regardless of the sacrifice of Ethical Principles” and “The Ends justify the Means.” It seems to me most of these negative portrayals emanate from referring to politicians.

Myself, I am a follower of recognizing and pursuing opportunities. All my 16 start-ups came about by recognizing and acting on an opportunity that I thought was right for me. Some outcomes of the pursuit were very successful, some clearly not. So, now the questions shifts to:

HOW DOES ONE FIND AND PURSUE AN OPPORTUNITY?

There is no scientific way or algorithm to answer this. I believe there are many ways to put yourself in position to find them. Here are some of them:

  • Become an expert on something. It could be a product, an industry, a skill, a subject, a company, etc. This knowledge will help your chances of recognizing opportunities in your areas of expertise that others won’t recognize. Knowledge rules in most endeavors.
  • Shop appropriate Trade Shows.
  • Attend conferences of interest.
  • Build Relationships and Trust in whatever space you’re in. If you’re always doing the right thing and are considerate of others, this will happen.
  • Sharpen your Listening Skills and ask good questions.
  • Talk to people who buy your service and product and those who use it regularly.
  • Take the time to be a good reader to stay abreast of current and world events, trends, new businesses, your industry.
  • Periodically attend appropriate seminars and courses.
  • Don’t hesitate to ask questions of important people, including meeting them. You’d be amazed at results you can get. A no reply is not a failure. What’s to lose?
  • Keep learning. It should never stop.
  • Get involved in the Community, Chamber of Commerce, Non-Profits, mentoring, helping, etc.
  • Develop a mindset to relate whatever space you currently are in to recognize if there are opportunities. Listen, observe, question.
  • Find an existing successful product and improve it by better quality, value, or offer new channels of distribution. Think of Scrabble where by adding one letter and getting full credit for a word someone else came up with.
  • Remember when looking for Opportunity ideas to act on, they don’t have to be blockbusters. Some mundane ones can afford you a good living. I remember interviewing someone who started a business making and selling key chains that he eventually sold for $60,000,000.

OTHER WAYS TO GET YOUR OWN BUSINESS OR DEVELOP YOUR OWN COMPANY BESIDES THE ONES WE’VE STATED.

  • You can buy a company or product or idea.
  • You can obtain a Franchise, which is somewhere between owning a company and working for one. For many, a good way to transition into starting your own.
  • Go to placement agencies for ideas like Edisonnation.com, Quirky.com, or crowd funding sites.

I’m sure there are many other arenas. These are mostly the ones that have worked for me. To further illustrate my points, I’ve learned that telling true stories I’ve been in seal the deal. Here goes some:

HOW I GOT THE IDEA TO START A WATCH COMPANY

One of my customs was to ask key customers and licensors for a full or a half-day of one-on-one meetings to brainstorm ideas to benefit both of us. These people almost always accepted. It was fun and productive. On one of these occasions I met with a large private mail order catalog customer (two owners and three other key people). I always asked at these meetings for trends or products that are working well for them and if they have a wish list of new products. This day they answered by telling me to come up with cat related items as all such ones were selling great. On my plane ride home I counted all the cat items in their catalog and was stunned to discover that 20% of all their products were cat related. Planes are productive think tanks for me, and I remembered that some time prior I was asked to put together a 16-page catalog for Sears with all personalized products I thought would sell. I remembered a source who created personalized watches that used rotating discs. (The second-hand was a piece of artwork that rotated.) They did sport watches and sold extremely well. Using that knowledge, I had a freelance designer draw a cute picture of a cat for the watch face and a mouse for the second hand. (Rocket science) She did so, and we made up a few samples. Our mail order customer loved it and put in the next catalog. It became their number 1 seller. We then tried it with some other mail order customers with similar demographics with the exact same results. There was no patent to be had with this rotating watch but no one else was using it so we thought we could design a line of them with popular themes and go right to China to get them made. We did this and with an innovative marketing plan built the company up, sold it in four years, and retired to Florida. All this with knowledge of an industry, talking to customers, and strong relationships which all contributed to an idea for a watch company in a mature highly competitive industry.

HOW WE SOLD OVER 700,000 BOOKS IN LESS THAN ONE YEAR.

We were in the game industry, which was highly competitive and expected new products every year. Our offices in NYC were seven blocks from Macy’s and often I went to their game department at lunchtime to see how our products were doing.

The Macy’s game department was adjacent to the book Department, and the same buyer bought for both. Perusing the Game Department, I spotted an end cap of Rubik’s Cube, the puzzle that was captivating the world. But next to it was a display of Rubik’s Cube Solution books. At that time it was a revolutionary move to sell a book outside of the Book Department. However, it was brilliant as that is where the potential purchasers of the book would be shopping. I spotted the buyer and quickly asked her how the books were selling. She answered that for every three Rubik’s cubes sold, two books were sold. That was my ah-ha! Moment when I could envision the opportunity to sell the books to everyone in the toy industry selling Rubik’s Cube, which was about everyone. I bought the book to determine the publisher and contacted them for a meeting. We met the next day, and my knowledge of the book industry stood me in good stead. I knew that all books were sold on a guaranteed basis, meaning all unsold books could be returned for full credit. This meant the Publishers put a cost for returned books into their initial pricing. Also I knew that volume in printing lowers costs substantially and that publishers did not sell to the Toy Industry. In my initial meeting, the Publisher was very interested in my selling to an industry that they didn’t call on but was aghast at my request of wanting to purchase the book at half the price they sold to their biggest customers. Imagine this unknown company with few employees making such an outrageous request. However, they changed their tune quickly when I informed them that all my purchases would be final sale, which meant no unsold books were ever coming back. That plus the volume I could add to their print runs, plus adding a new channel of distribution combined to their acceptance of my pricing request. It was a win-win for all. We sold over 700,000 books within the year, which they profited on from their sales to us and the reduced costs to print on all their book sales. We had no development costs or overhead as they agreed to ship all our book orders in 1,000 units or more direct to our customers. We sold to two large distributors who shipped to all small stores who required less than 1,000 at a time. Our knowledge of two industries paid off in spotting the opportunity and executing.

I have many more stories I could tell just like these two but won’t bore you with them.

My strong belief is that those looking for ideas to start a business or find a new product are best served by being opportunity driven, develop a mindset to see opportunity and put yourself in places and situations to recognize an opportunity, and if luck finds you, know how to accept and capitalize on it. Also remember the idea is important, but the implementation of the idea is equally important. I like to fall back on the Harvard Business School’s description of Entrepreneurship developed by Howard Stevenson: “the pursuit of opportunity beyond resources currently controlled.” I would add one word to it: recognition.

 

Share

Leave A Comment...

*