“I’ve developed this really cool product and I have applied for a patent.”
“I want to show you this awesome app that I helped design.”
“We’ve got a great idea for a website.”
Those of us who work with entrepreneurs hear these types of introductions all the time when people come to meet with us. Whether it is a result of years of development and research, or a sudden inspiration that leads to a “eureka moment,” these aspiring entrepreneurs have come up with what they hope to be the next big thing.
The problem is that many of these entrepreneurs have gotten the design of their business models backwards.
Rather than look to the market to tell them where opportunities are, they have come up with an idea and are trying to run full speed into the market with it.
Starting a business by trying to find a market for an already developed product usually leads to a long and often futile launch of the new venture. It results in a very expensive start-up process, as revenues tend to be very slow to materialize. Expenses just keep piling up as the entrepreneur tries to find a target market with customers who need the product.
The approach to starting a business that has the best chance of success is to look to the markets for ideas.
Start by looking at markets you already are familiar with from your knowledge, skills, and experiences. The best business opportunities come from solving everyday problems that you have observed from your previous work experiences, your hobbies, or things you see in your everyday life.
Look for groups of customers who share a common dissatisfaction with how they are being treated or who cannot find what they really want. It may be something as simple as a market that has not been given good customer service.
Look for markets that are ready to try a new product to replace the old ones they now using. That is what has led to the success of the Nashville-based app company Aloompa. Much of their growth has come in the music festival market, where their apps replace outdated printed programs.
Look for markets where something that has worked in other similar markets has not been tried in your market. That is what inspired Bob Bernstein to open Bongo Java, a neighborhood coffee shop in Nashville, that was like the ones he loved in his home town of Chicago.
Look for markets with “pain” and then develop a product or service that takes care of that “pain.”
My favorite meeting with an aspiring entrepreneur is when they come to my office and say, “I have found a market that needs….”
I know they are starting down the right path to develop a business model that has a good chance of success.