Ideas Versus Opportunities
Scenario #1: While working in an industry, a mid-level manager stumbles onto a business opportunity. She presents it to her boss and says, "I think this is a great opportunity for us to introduce a new product and gain additional market share." The boss replies, "We don't do that around here. That's not the business we are in." Feeling somewhat dejected, she continues to massage the idea, study the industry, analyze potential customer groups and put resources in place. Several months later, she has a handful of potential customers who are ready to buy her new products and she is certain that the new venture will work.
Scenario #2: A guy is sitting on his couch watching a football game on a Sunday afternoon. He thinks to himself how much he hates his job and how he doesn't want to go to work tomorrow. Suddenly, he has an idea for a new product in an unfamiliar industry. He thinks to himself, "This is a revolutionary product idea. I am sure no one has ever thought of this before. I'm going to make millions." Without doing any additional research and without knowing any more about the industry, he promptly goes into his bosses office on Monday morning and gives his two week notice. He is going use the money in his savings account and all of his time to focus on his "new business."
I'm sure you get the point: one is a true business opportunity and one is a pipe dream. A sound opportunity consists of:
- 1. A proposition for satisfying an unmet need (or a better way to meet a need)
- 2. A credible position in the industry (broad and deep industry knowledge/experience)
- 3. Access to the resources required to implement the proposition (suppliers, partners, funds, etc.)
- 4. A handful of customers who are ready to buy the product or service right now!
- 5. A sound business model where all the numbers work.