Where do new business ideas come from? How can you create a new idea for your new business? How do you know it's an investible idea?
When you ask Google how you might find ideas, the answer is generally, "ask your friends, think of an unmet need, identify problems and how you might solve them." Which is all frustratingly vague and of no practical use. Back to staring into space! Regrettably, I can't offer you a specific business idea, because you need it to be your idea. But I'd like to offer something more tangible, which has served me well and I hope proves more useful to you. How to create a new business idea.
Simply said: "Become a small cog in a big wheel."
Big cogs drive big engines, and the small cogs link the big cogs together, which means that without them the big cogs don't turn and the engine stalls.
If, in business terms, you can be the small cog that's turning the big cogs more effectively, you just might have yourself a business idea.
Let me give you an example: Before the rise of Apple and Samsung as phone manufacturers, the mobile operators (like Vodafone, Telefonica and Orange) wanted their brands on the mobile phones they purchased. These operators are huge cogs, with immense marketing and distribution power. They wanted their customers to carry their brands in their pockets. The likes of Nokia, Motorola, and Sony Ericsson were the phone manufacturers and weren't interested in giving away their brands to the operators - they had their own brand agendas. But critically, also, they didn't have the manufacturing flexibility to create phones with hundreds of operator brands. Two mega-cogs making an enormous engine, with a missing tiny cog - the ability to customise phones with the operators' brands at the final stage of manufacturing.
That was the essence behind Sendo, the mobile phone business I co-founded with Hugh. We divided mobile phone manufacturing into two stages - making a standardised core phone module at high volume in China, and then holding the final branded plastics for each operator at a customisation centre in Europe. We shipped the un-branded modules into the customisation centre and then when an order from Virgin, for example, came in we'd select the branded plastic parts, then the accessories, box and manuals, add the customised software and Bob's your uncle - a fully branded Virgin phone. We could ship within 48 hours of receiving an order. The operators loved it and that was our niche. We shipped millions of branded phones. We were the small cog that drove the customisation engine. And we needed both the bigger cogs (other manufacturers and the operators) to make it work.
For your own business, look for the big cogs and see whether there isn't room for a small cog to join them together. Another example might be avocado producers and breakfast cafes. I noticed in Australia the huge rise in the 'smashed avo' breakfast. You need peeled and ready to eat avocados. Then roughly smash them so you've got a mix of chunky and mashed. I'm sure there are innovative new businesses that are buying the avocados and producing the smashed variety to save the breakfast cafes time and money in doing it themselves. As trends develop, opportunities open.
Final word: Why is this better than a business idea that consolidates, integrates or disrupts? Because big cogs need small cogs to run efficiently. And sometimes a small cog becomes so important that a big cog depends on it. And then they buy it. And there's your exit. And that makes it investible.
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