Commercial enterprise is not about sellers, it’s about buyers (customers). The idea is to match the wants and needs of customers with the interests and passion of the entrepreneur. This can be a time-consuming process.
The challenge for the entrepreneur is to match personal skills, interests, and capabilities with an inherent passion and tie it in to an underserved customer base. Following is a list of questions designed to help do just that:
− What do I enjoy doing the most?
Doing something enjoyable is a good way to ignite commitment and possibly uncover an idea that will prove profitable. For example, the Boeing (aircraft) Company got its start after flight enthusiast Bill Boeing built a plane in 1916. One plane led to two, then three… and so on. In Glasgow, Scotland child-lover Cathy Campbell turned the front room of her home into a crèche (a daycare centre). Cathy started small and insists she wants to stay small so she can focus on her clients and avoid too many administrative duties – thereby allowing her to do what she loves most, which is play with children.
− What are my hobbies and/or interests?
Anything from growing roses to personalizing software programs to building model ships can be turned into a profitable business if the circumstances are right – either by teaching others how to do it, by packaging and selling what is created, or by selling related products to fellow enthusiasts. For example, quite a number of multi-million dollar computer companies (Apple, Dell, Microsoft…) were started by ‘computer nerds’ who turned their computing interests into selling marketable computing products and services to similar enthusiasts.
− What subject(s) or pastimes did I enjoy in college (or high school)?
Think back to your student years. Can the one or two subjects you found most fascinating be turned into a money-making idea? With a little thought and effort they just might. For example, when MIT professor Harold Edgerton invented the strobe light he couldn’t interest General Electric in its possibilities so he hooked up with two students and formed a business (EG&G) that photographed mechanical processes at high speed, thereby providing a new way to look at, and solve, industrial problems.
− What marketable experience, knowledge, or skills do I possess?
Almost everyone possesses a skill or knowledge that has the potential to make money. For example, Snap-On Tools began when machinists Joe Johnson and William Seidemann fashioned together a set of interchangeable sockets and wrench handles to make their job easier. The company where they worked rejected their idea out of hand, but being experienced machinists Johnson and Seidemann knew their idea was a sound one so they developed it on their own. In another example, fast food manager R. David Thomas helped Colonel Sanders succeed with his Kentucky Fried Chicken franchise then went on to use the additional experience he gained to start the Wendy’s burger chain (named after his daughter). Further examples of using personal skills to create a new business include ‘mash-up’ operations that combine different web-based tools to create new search and software possibilities or teaching-based operations that show others how to use digital photo software (or any new software for that matter).
− Have I ever looked at another business or product and thought ‘I can do better than that!’
Many successful businesses get started because they’re better than what their competitors offer in terms of service, quality, location, speed, or uniqueness. When Kemmons Wilson was charged an additional fee at a roadside motel for each of his five children he became so upset he started Holiday Inn. Polish immigrant Rueben Mattus, a high school dropout who scratched a meager living selling ice cream in Brooklyn, New York, suffered through years of price wars, cut-throat competition, and ingredient shortages caused by World War II before he finally decided to fight his competitors by developing an ice cream that didn’t skimp on ingredients.
− Are the people in my community asking for, or in need of, a product or service?
For centuries, perceptive entrepreneurs have known that products or services that are needed or wanted are sure-fire money makers. That’s how Levi Strauss (of ‘blue jeans’ fame) got his start in the clothing industry. Strauss immigrated to the United States to start a dry goods business, but after landing in California he quickly discovered that most miners were desperate for clothing that could withstand the rigors of the mining trade. Not wanting to pass up this opportunity (and not finding anything on the market to fit the bill), he fashioned a pair of trousers out of canvas, used rivets to hold the seams together, and created the ‘501 Blue Jean’. Avon Cosmetics was founded by book salesman David McConnell who quickly discovered that the free perfume samples he gave to women were more popular than his books. Decades later, Tom Fatjo and Louis Walters sensed that changing environmental laws were going to create opportunities for garbage collection so they bought a specialized garbage truck to help fill the needs of their community.
− What will make the world (or my neighborhood) a better place?
New ways of thinking that can help the world become a better place to live can lead to much entrepreneurial success. For example, Anita Roddick founded the Body Shop because she was upset by the fact that most cosmetics were tested on animals by squirting chemicals directly into their eyes. Her idea was to set up a company that sold beauty products free from animal testing. One hundred years earlier, the Borden food company came up with a winning idea that made the world safer when founder Gail Borden witnessed a number of infant deaths from putrefied milk and saw the need for a non-perishable substitute. Borden’s creative thinking and determination led to the discovery of condensed milk. The clockwork radio, a wind-up device invented by Trevor Baylis so people in remote places (without access to batteries) have the ability to stay in touch with the rest of the world, became a worldwide testament to innovation and persistence (a wind-up laptop computer has also been developed based on this concept). The water-purifying drinking straw, packed with f iltration aids, is yet another life-saving device designed to assist people in time of need.
− Is there an obvious problem out there just waiting for a solution?
With so many people concerned about clean, cheap energy (and the environment), business ventures that provide an alternative to dirty and expensive energy practices are proving to be real money-spinners (again, see Chapter 35). For example, in 2005, Scottish entrepreneur David Gordon was exiting a meeting in Glasgow, Scotland when he noticed a tree swaying in the wind next to an apartment building. He began thinking about how the energy moving the tree could be harnessed to provide power for the building and he quickly realized that somebody somewhere would probably make a fortune from wind power. He wanted that someone to be him. After doing some research, Gordon visualized a wind turbine small enough to fit on the top of a house or building. His next move was to develop a patented ‘inverter’ that pumps the turbine’s electricity straight into a building’s power structure. A range of products and services followed to complement the sustainable energy sector that’s being capitalizing on – including offering customers help with financing.
− Is there a current product or service on the market I truly believe in?
Business ideas do not have to be original. Sometimes an old idea can be copied and introduced into a new market to astonishing effect. For example, after witnessing Domino’s Pizza’s quick home deliveries in his travels through the United States, Leopoldo Pujals returned to Spain, set up a similar operation in 1987, and named it TelePizza. By 2010, the company had opened 1,025 outlets around the world. In April 2016, the company completed an IPO worth around €550-million. In the United States, Cheri Faith Woodward started the Faith Mountain Company, a $20-million mail-order business that distributes herbs, dried flowers, kitchen implements and handicrafts. Although Woodward learned her trade from a local woman who had been sharing her knowledge with others for decades, it was Woodward that turned this knowledge into a business. After 25-years of business, the company closed and sold its mailing list and database, which contained the names and addresses of over 1.7-million customers.
− What do the people or customers in my current job complain about (or want) the most?
Unhappy customers can unwittingly uncover vast opportunities – if they’re taken seriously and if someone takes the time to listen to them. For example, Buster Brown shoes came into being when shoe salesman George Warren Brown heard people complaining that most shoe fashions were staid. At this point in time (1878), the entire American shoe industry was located in New England so Brown developed a line of shoes that catered to his local market. Within a few years his products were being sold coast to coast. More recently, a corporate executive in London, England overheard several complaints circulating in his office about how difficult it was to find a good plumber. Intrigued by the notion of setting out on his own and working with his hands, he took a course in plumbing, became a registered plumber, and set up his own business. He now makes about the same money per year as a plumber compared with what he made as an executive.
− Is there a need for a product or service in an underserved market?
Too many small markets are ignored by business communities because of prejudice, ignorance, outdated misconceptions, or just plain laziness. Consider the GrameenPhone telecommunications company in Bangladesh, which was assisted in its start-up phase by Nobel Prize winner Mohammad Yunus. GrameenPhone (‘Gram’ means village) began selling mobile phones to impoverished communities in 1997. Instead of sticking with the traditional business model of selling one phone at a time to a customer (which is impossible to do in a country where the average yearly income is only $286), a new business model was established in which a single mobile phone is leased to a village and shared by dozens of people. Six years later, with this innovative service having expanded to include over 50-million people, GrameenPhone produced revenues of $330-million per annum. Future revenues are expected to rise to half a billion dollars.
− Is there a type of person, group, or customer base I connect with?
Those who enjoy working with the elderly, an ethnic group, hobbyists, children, mountain climbers, basketball players, or any form of potential customer probably harbor an above-average ability to talk with them, discover what it is they need or want, and learn ways to serve them. That’s how Daniel Gerber, son of the president of the Fremont Canning Company in Michigan, came up with his revolutionary idea of selling baby food. Gerber never thought much about parents with small children until his wife had a baby. Only then did he realize how difficult it was to prepare and strain baby food. After confirming this with countless parents he used his father’s machinery to develop food products for infants. Eventually his idea became so successful the company abandoned its adult line and concentrated solely on making baby food.