How To Find A Business Problem To Solve

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Photo by Tyler Franta on Unsplash

Josh James, the co-founder and former CEO of Omniture once famously said, “When you find an idea that you just can’t stop thinking about, that’s probably a good one to pursue”.

The trouble with a number of aspiring entrepreneurs is that they never are really able to find that one business idea that consumes them completely. There are those who have dozens of ideas but none of them is truly captivating. On the other hand, there are those aspiring entrepreneurs who are great at executing but are never able to find that one, unique business idea.

Blue Ocean Vs. Red Ocean Ideas

Your business idea does not have to be truly unique. Some of the most successful tech businesses in recent history, including the likes of Google, Facebook, and Uber were not really unique business ideas. In other words, they launched at a time when internet search, social networking or online ride-hailing were already being done by other players.

A truly unique business idea (blue ocean strategy) requires you to educate your customers on the problem they are facing and how you solve it. That needs a lot of time and financial investment. On the other hand, disrupting an existing market (red ocean strategy) can be easier since you already know where to find your customers. The challenge is in building a product that is better than what competition has to offer.

Idea Sourcing Strategies

Now that we have established that there is as much potential in an existing market as there is in a new one, let us take a look at the various strategies to source your business ideas.

Takt Time Method

Manufacturing industries make use of what is known as the ‘Takt time’ to identify productivity. In short, this is the average time that it takes to complete every single process in a manufacturing process. The idea is to identify bottlenecks in the process so that it can be fixed through alternate strategies.

You may deploy this method to any industry to find areas of improvement. For instance, let us say you are a Sales Manager whose job it is to find prospective new clients and reach out to them for an appointment. Applying the Takt time method to this process, you may notice that it takes an average of two minutes to identify a new prospect, another five minutes to dig out their contact credentials, but just two minutes to call them.

In the above example, the bottleneck is in digging out a prospect’s contact details. If you could bring this down to two minutes, then you improve productivity by almost a third.

A lucrative business opportunity here is in speeding up the contact discovery process. If you could build a software that automates this process, you could save millions of hours they waste in discovering contact information of their prospects.

What’s Trending

Entrepreneurs often dismiss products that are fads. This is because such products are only popular for a short amount of time and are not “long-term” ideas. However, there are a couple of ways to build a solid business by knowing what is trending.

The first is arbitrage. Fads often start in one part of the world and then travel fast elsewhere. The fidget spinner was invented way back in 1993. Yet, it started picking up in popularity among American school kids back in 2017 and quickly traveled the rest of the world. If you are in the toy business, you could look at emerging trends in one part of the world and devise a way to introduce this to your own country. Since you are early on in the game, you may often be able to source these products for cheap and sell them at a high margin when they become popular.

This is especially true in the case of health and fitness industry. Quinoa as a superfood emerged in popularity in the United States around 2010. It took nearly two years before the word spread and it became popular in India.

Another way to benefit from knowing what’s trending is by predicting future market potential. For example, the charts here illustrate the steady growth in popularity of fashion accessories like artificial hair, fake nails, fake eyelashes and shapewear while terrarium vases and air sofa have huge spikes, but unreliable growth. Knowing what products are beginning to see a steady growth should give you an idea of the products you could invest in.

The Cost Disruption Method

This is similar to the ‘Takt time method’ except that we target the cost to the consumer. The process works something like this — pick an industry and identify how much money a consumer spends getting a certain task done. Once you have this information, you could look at the pricing breakdown to identify a cheaper way to do things.

Let us take the financial industry, for example. With globalization, there are today thousands of small businesses that transact with similar businesses from other parts of the world. Wire transfers are complicated while online alternatives like Paypal can be expensive. For instance, an Indian freelancer receiving $500 in payment from his client in the US loses over $25 in fees; not to mention an unfavorable exchange rate.

Services like TransferWise became popular since they brought the cost of transaction significantly down. This is despite the fact that transferring through such a service can be a little more complex than using Paypal. Could you build a tool that is as simple as using Paypal and is yet not as expensive?

Message Board Mining

Sometimes, the cost and complexity are often determined by regulations and the free market. As a new entrant to the business, you may not always have a lot of control in disrupting the market on these counts. What you could however do is look at the factors that concern customers but are yet to be addressed by the established businesses in the space.

One of the most effective ways to do this is through message board mining. This is how you do it — pick an industry you are knowledgeable about and go through online message boards to identify the areas that existing businesses do poorly in. A telecommunications forum could have people complaining about poor customer support or unstable connections. Other industries may have consumers complaining about issues like data privacy or product quality.

Once you mine these forums deep enough, you may be in a position to identify patterns and common causes for concern. Your startup may thus focus on addressing these issues in your product. For instance, DuckDuckGo is a search engine founded on strong privacy related fundamentals. This search engine, which sees over 20 million queries each day, became popular simply because of privacy concerns surrounding Google.

The ideas provided here is simply a starting point for identifying lucrative business ideas. It is recommended that you validate your business idea before throwing in all your time and money into the venture.