The process of good business ideas is often driven by market research. However, in my opinion, the process of great business ideas is driven by intuition. Customers can’t tell you what they want beyond something they can’t imagine. Great business ideas are usually beyond imagination. Albert Einstein once said, “If at first glance the idea does not seem absurd, then there is no hope for it.” Great business ideas lie in the realm of the absurd and the impossible. Imagine the guy who invented goggles, everyone must have laughed him into the woods at the outset.
A good business idea is a product or service, which is unavailable currently, that people want on a recurring basis; and are willing to buy and costs less than the price the customer will pay. A great business idea however, is one, which is not in the awareness set of the customer yet. There is no way to know when you are onto the next big thing. It is a mixture of creativity, timing and sheer luck. However, there are some ground rules that have held the test of time for all great business ideas. This post examines six key ingredients and steps that make the process of great business ideation possible.
Scan the macro environment in four parts: First and foremost great business ideas are born out of scanning the environment to look for sea changes in demographics and socio-cultural behavior. Break the macro environment into the following four arenas and try to imagine the future.
How will we live in the future ? How will we work in the future? How will we recreate in the future? And how will we interact in the future?
Focus on one of these areas when you begin your ideation.
Imagine the future: The great Canadian ice hockey player Wayne Gretzky said, “I skate to where the puck is going to be; not where it has been”. Now see the arena that is going to be part of your business plan. Imagine what it will be like in the next 10 years. For example, almost every other 10-year-old is competent with smartphones and iPads now. How will commerce be undertaken in the future? How will these kids who will be young adults in 10 years collect information and buy products? Sit and imagine the future. Now plan your business idea around that.
Change the curve: Be disruptive. Good business ideas look at improving things by 20% or 30%. Great business ideas look at changing the curve. Period. Go into a totally new orbit. The Mac is a great example. Steve Jobs introduced path-breaking applications in the Mac to give IBM a run for its money. He was introducing fonts when the world was struggling with dot matrix printing.
Recurring vs. novelty: Great business ideas are not only unique. These also create and fulfill a recurring need of the customer. Many unique ideas die an early death because of their novelty factor that gets stunted beyond the trial or a one-time repeat value. To become a great money-spinning business idea the product or service should satisfy a recurring need.
The business moat: Everything about the brand happens in the mind of the customer. Great business ideas create business moats by either raising the emotive content of the product or service through branding or through a technological advancement. It is quintessential that great business ideas are protected through patents or high-entry barriers.
Check the unique vs. value matrix: Not all unique out-of-the-box ideas are necessarily great business ideas. You need to check this through the filter of what is unique and what is valuable. This gives a good idea about a great winning business idea. It needs to be both unique and has a high value or need for the customer. If it is unique and not valuable it is an unwanted product. A product which is low on uniqueness and highly valuable is a good but not great product. A product which is low on perceived value and low on uniqueness is of no use. The matrix to focus on is the product which is unique and valuable. That's a winner all the way.
The process of ideation is one of hits and misses. There is no eureka moment in real life. Ideas are nurtured and developed over time. The process above is at best one other way to ideate.
Neeraj Batra is the co-founder and chairman of OnCourse Vantage and tweets at @batra_neeraj