Good businesses are built on foundations of good ideas. Enterprising entrepreneurs need creative ideas on which to build their businesses. Existing businesses that intend to grow and prosper need sources of innovation to rejuvenate themselves.
A good business idea is an idea that satisfies an existing need. Earning a profit should not be the immediate concern of a business. The immediate goal should always be to satisfy a customer’s need. As a result of satisfying those needs in financially favorable exchanges, a well run business will establish a lucrative earnings stream over time.
The process of “new” is risky. New businesses have a higher mortality rate than established businesses. New products have a higher mortality rate than existing products. Being “new” is also an expensive process.
Being “new” and innovative is at once both necessary and risky. How can the beginning entrepreneur and the growing business reconcile these seemingly irreconcilable concepts? The answer lies in avoiding wholesale creativity and instead being “new” and innovative on the margin. Leave the revolutionary “new” to the geniuses whose egos and pocketbooks can afford the wild roller coaster rides.
The opportunities for gradual innovation are more abundant than the opportunities for exhaustively creative innovation. Existing products and services which can be enhanced far out number those which are waiting to be created. There is greater potential and less risk in taking advantage of what currently exists and exploiting it than in trying to bring something totally new into existence.
There are established reservoir of fertile ideas that have been consistently tapped for innovative concepts and new products Hobbies, personal interests and avocations have been a spring board for many a successful venture.
Knowing your business, having knowledge and experience in the areas that your business will operate in, is a key element for success. What better place to start than in an area where you have fun, your hobby or avocation. The enormously successful surf and beach wear fashion industry was created by people who wanted comfortable and stylish clothing to wear while they pursued their hobby. The industry’s growth and innovation still originates with individuals whose personal interests attract them to the beach.
Successful companies often begin when determined a business or individual encounters an “I need a ……” and couldn’t find it elsewhere situation. They needed it badly enough that they went ahead and developed it for themselves and found out that there were others, much like themselves, that had a similar need. Many specialized tools in agriculture and industry where developed in this manner and established the foundation for the building of a business.
Unintended applications for existing products and technologies have often recharted the course of events for many companies. Little did the manufactures of leg warmers for ballet dancers ever anticipate that style and an exercise crazed population would make leg warmers a mass consumer item. The incredibly successful Post-It note pads from 3M Corporation were made possible by the development a new adhesive that was unrelated to the Post-It development..
Recognizing changes in demographics has provided the starting point for many a new venture . Baby strollers for parents who jog, Club Med vacation resorts for singles, and discounted movie passes for Seniors were conservative innovations that exploited existing needs.
Equally successful can be actions that recognize the opportunities that a changing environment presents. The rapid increase of oil prices during the decade of the seventies created superior growth opportunities for companies that were involved with alternate fuel sources. Decade old companies that had toiled in obscurity producing wood burning stoves prospered and entrepreneurs were quick to follow. Water shortages have, and will continue to provide a safe area for the development of innovative products for conservation.
Understanding the implications and applications of technological advances can open the flood gates of product innovations for new businesses. The wide range of mundane industrial applications of micro processor technologies has proven to be one of the saner and more lucrative segments of the computer revolution.
Because you want it to be your business, look to the proven reservoirs of good business ideas and identify a need that you are uniquely positioned to satisfy.