Sapiens.
What is ‘innovation’? One answer is that innovation involves disruptive change in an industry, sector, product or service. This is powerful ‘medicine’ - it can take down giants! It involves looking at a market in a completely different way. It may be a new enabling technology or a supply chain, distribution, sales or marketing concept. Whatever the ‘big idea’, it disrupts the way your competitors do business or creates a whole new market or both.
There are famous recent examples in the field of mobile technology and music in particular. If you want to learn about innovation and disruptive behaviour then we recommend reading the biographies of the key players. These are the kind of ideas we don’t talk so openly about because they have such enormous potential value, so contact us if you wish to partner up on something and we will do it properly and ensure that you protect your intellectual property first.
Often the best new ideas come when we are just ‘living’. Very Zen but actually the best way to do this is to travel wide and frequently and look for things that don’t exist in your home country. Also for things that can be imported or exported, things that simply haven’t been thought of at home or wherever your target market is.
Migrating conventional services to the internet is very profitable if you get it right. There is a big structural shift occurring right now with many people doing this. You will have experienced this for yourself, no doubt. This demonstrates the real value of the internet - it was never about websites, rather services of convenience and potentially global reach. That is why not all businesses benefit from a web presence but people sell them one anyway.
Nature provides great inspiration for new business ideas and certainly technologies. Look at nature, how it solves problems. There are many examples of products that have sprung to mind whilst sitting on a park bench observing wildlife. Look at how nature interacts if you want services or how it works if you want technology products. Learn from nature, it has been innovating far longer than us.
Problem solving is often a good source for a new business idea. The world is full of people suffering and having problems. Observe the deficits in your own comfort, your everyday private and business life. What could help?
Target a specific type of person, business or social group that you have an affinity with and ask them what they need? What are their unsolved problems? What would be their ideal service or product?
biz-wisdom: Remember, ideas are free. It is the enormous energy, passion, hard graft, money, risk and stress it takes to execute that contribute to success. Unless your idea is world-disruptively innovative, share your idea with other people. Don’t fear them stealing it, the real skill is in the execution of the idea; they can’t steal that from you. We are here to help you execute your idea and transform it into a living profitable and valuable asset.
Testing and Refining your Idea
Your idea needs testing on your target market. Even if your business is a copy of another such as a franchise, you may still need to test your designated geographical area, demographic or sector to ensure it will sell in that arena.
biz-wisdom: When it comes to trust, never take other people’s opinions or advice at face value, even advice from professionals or from colleagues. You bear the risk. When taking advice from others, always ask yourself ‘What’s in it for them?’, ‘What is their angle?’, ‘What is their motivation?’. This will get you far in life too.
In a trust network like our Biz-Network where all members are carefully vetted and have built trust over time by working together, some of these problems can be overcome and this is very valuable. It allows you to build teams quickly, reacting to rapid market change.
This is your business and your financial and legal risk. You and your key stakeholders, need to be in agreement that it will work. In so far as is practical, in time, effort and cost, try to verify in as many independent ways as practical, all advice and feedback that you receive.
How do you ‘test’ your idea? It is conventional to perform market research. What is market research? There are two sides to this. It is about testing your product or service on real people that you don’t know. It is also about asking people what they want or need. It is about matching solutions to real world problems or needs.
This is a vast subject and beyond the scope of this book but the options for most small business start-ups include use of a market research firm. This costs money but is worth it if your budget stretches to it. If you don’t have the money for that then you can D.I.Y but research the subject at least a bit first. Final option? Don’t do any formal research. Many first-time business owners don’t as many are ‘clones’ and already have evidence of market demand. If you choose not to, you won’t understand the market so how can you compete?
Your objectives should be:
1 To understand your market - for example by asking some simple questions. How large is it? What geographical areas does it cover? What demographic does it target? Is it business-to-business or are you selling to the public? Who are the competition? What are their strengths and weaknesses? What slice of the market can you realistically take? What is the underlying trend in the market and are there sub-trends?
2 To gain an understanding of the target customer - Who are they? Where are they? What do they do? Think? Like? Dislike? How do they buy? When? How often? What volume? Their trends and sub-trends?
3 To establish if your intended product or service is a good fit with your intended market and customer profile - How is it perceived? Strengths and weaknesses compared to competitor’s offerings? Price comparison? Quality? Delivery? Quantity? Perception of brands?
If you are testing an idea yourself then you need to devise, with your other stakeholders, a set of questions like those above. Create a quiz that will satisfy the above objectives. You need to put those questions to your target market and discuss, in-depth, any feedback you receive.
Of course this is very product or service specific so we can’t do that for you but we are available on our Biz-Cafe discussion forum for general guidance.
biz-wisdom: People are emotional beings. Purchasing decisions are driven primarily on a subconscious level. Rationality is secondary, in general. The global Marketing and Publicity industry has grown very large because of this. It is not just about getting your name out there it’s about winning the hearts and minds of the customer and yes it is like a war, but a war of emotion and ego, of need and fear. Humans have a built-in six-month cycle of deluded, obsessive behaviour they attach to ‘objects of desire’, many marketers exploit this too.
Marketing is an iterative process. You often change the product, service, market segment. Don’t limit your imagination here. Eventually you will find your way.
Next you need to consider: can you sell it? Can you deliver what your customer wants and needs, better than your competition? Can you make a profit out of doing so?
Step Three - From Idea to Business Model
So you have what it takes. You understand what makes a sound business. You have a great idea which has stood up to market testing. It fulfils a need and offers perceived value by your target customers. There is sufficient demand to satisfy your needs? If not then please reconsider Step Two, else read on.
Now you are ready to start your project. You need to consider how you will transform your idea into a profitable business. This is like using a sketch to build a scale model. You are now testing not just the idea but how you will execute it in the real world. You need to be confident it will work before investing your time and money in the real thing and recruiting people. The risks and costs are not real at this stage but they will be at the next.
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