6 Frameworks for Generating New Business Ideas
Resources and tips to help aspiring entrepreneurs explore and discover new business opportunities.
Sometimes one of the hardest things about being an entrepreneur is coming up with a business idea. Sure, disruptive technologies and unmet customer needs are the best ways to identify business opportunities, but may be too broad for anyone who is stuck in a creativity rut.
Here are 6 frameworks that will help organize your thoughts and get your creative juices flowing. Scroll to the bottom for more motivational resources.
Frameworks
Democratization
The democratization approach refers to the process of taking a product or service that is mostly used by wealthy households and making it available to the average citizen.
The concept has been popularized by fintech companies, but this framework is useful outside of the financial industry as well. For example, some have argued that you no longer need an extraordinary amount of wealth to have access to a private driver because of companies like Uber and Lyft. Ordinary people also now have access to what is equivalent to a personal chef because of food delivery apps like DoorDash and Grubhub. Instacart is like having a personal shopper and Airbnb is like having a second home.
By democratizing products and services that have historically been limited to a select group of people, you can exponentially increase the potential number of buyers.
Consequentially, the revenue opportunities are massive, which will of course inevitably attract enormous competition. To come out on top, you’ll need a solid strategy in place early into your launch and a phenomenal team to execute it
Simplification
Think about some of the tasks that you dread and why you dread them. It’s often because the process is painfully complicated or because the task is time-consuming with very little reward. Identifying solutions to pain points like these makes for great business opportunities.
One approach for identifying solutions is to see if there’s a way to knock out 10 or more steps with 1. For example, when’s the last time that you booked a flight or made vacation plans through a travel agent? This used to be a time-consuming process that involved calling various agencies to compare itineraries and prices. Travel sites like Kayak eliminated several steps and reinvented the process by making all the necessary information available on a single website. This innovation allows everyone to conveniently book flights, hotel rooms, and rental cars within minutes, without ever needing to speak with a travel agent or sales rep.
Meal kit companies like Hello Fresh and Blue Apron are another example of the simplification approach. Think about all the steps that are involved in cooking meals at home. First, you have to browse through websites or cookbooks to find recipes. Then you have to shop for the ingredients. If you’re lucky, one store will have everything that you need. Otherwise, you’ll need to go to multiple stores. You have to get through all of that before you can cook your meals. Meal kits simplify this process by knocking out two of the most time-consuming steps. They curate all the ingredients for delicious recipes and deliver them right to your doorstep.
The advantage of the simplification approach is that it can work for a large consumer base or a niche group. It can also be applied to a process in almost any industry. But identifying a good solution for a complicated process isn’t easy. Even if you can spot an opportunity, this approach often requires a non-obvious technical solution or a sophisticated operation that very few experts can execute. Entrepreneurs who pursue this approach should be fairly savvy with technology and keenly aware of emerging trends. Technological advancements can create a path for revolutionizing an existing industry if you’re quick and able to think outside of the box.
Business Doppelgängers
The doppelgänger approach copies existing businesses but launches them in new markets. A classic example is Rocket Internet, a German investment firm that launched European companies using the same business models of US tech companies like Facebook, eBay, and Airbnb. The practice is controversial but it certainly has strategic advantages.
This approach is best for someone with resources and friends in high places, because you’re likely to make enemies as you launch your business. Even if you don’t see any issues with being disliked, the risk is that enemies can drain your company’s resources by burying you in litigation. Additionally, you may lock yourself out of important partnerships by offending the wrong people. You’re probably better off doing this on a much smaller scale, but even then, you still run the risk of getting sued.
Fly Under the Radar
Profitable businesses almost always immediately attract fierce competition unless the business is boring or unconventional. For example, have you heard of United Site Services? Most of us haven’t. The company is the largest provider of portable sanitation services in the United States and valued at around $4 billion.
There are millions of businesses like United Site Services around the country that most people overlook. Just because a business idea doesn’t seem glamorous doesn’t mean it wouldn’t be profitable.
Entrepreneurs pursuing this route should focus on the size of the market and find one with strong demand. While VCs are chasing after splashy ideas and groundbreaking technologies, build an empire in an industry that hardly anyone is paying attention to.
Helping Other People Make Money
There will never be a shortage of people who need and want to make money. Some of the most lucrative opportunities include creating a market that enables individuals to make use of idol property or a way to capitalize on their skills and talents. For example, consignment platforms like Depop and Poshmark created a marketplace for lightly used clothes and accessories. Hospitality platforms like Hipcamp and Airbnb allow people to rent out unused rooms, homes, or land. Creator platforms like Buy Me a Coffee and Patreon enable creators to build communities and sell memberships.
While some of the most notable examples use technology as a solution, it’s possible to enter this space through more traditional means. Flea markets, for example, provide a physical space for business owners to sell products and services. You can also help people increase their wealth and income indirectly by providing childcare or facilitating educational workshops related to a specific industry or career.
Building a business that helps others succeed can give you a sense of meaning and purpose. The opportunities in this space are also truly endless. To increase your likelihood of success, it’s important to have a strong understanding of the problem you’re aiming to solve. Entrepreneurs who have first-hand experience are more likely to provide a better solution than ones who don’t.
Founder Market Fit
Sometimes the strongest tool in your arsenal is anything that you can leverage that would give you a distinct advantage over competitors. This includes any unique insights and talents, as well as resources such as cash you can use from savings accounts and a network that you can turn to for advice and financial support. For example, maybe you’re a skilled designer with several years of experience at a creative agency. You may be in a good position to leverage your skill set and experience as a freelancer or start an agency of your own. You could also begin building your personal brand to eventually sell digital products like eBooks and online courses to generate a steady stream of passive revenue.
To identify your unique strengths, start by reflecting on your hobbies and experiences. What makes you stand out from others? Try not to be dismissive of anything that comes up. These days, you can capitalize on just about any unique hobby or interest. Check out this lawyer who created a YouTube channel that is entirely dedicated to picking interesting locks. That seems like a very small niche but he has nearly 3.6 million subscribers and his videos have generated almost 809 million views. For more examples, check out my post about 5 Latinx founders who are breaking barriers and forging a path for indie creators.
Even if you’re unable to identify your competitive advantage right now, keep in mind that you can carve out a niche in just about anything that you dedicate time and effort towards. The important thing is that you get out of your comfort zone and begin exploring your interests. Don’t be afraid to take risks. Investor and entrepreneur, Erik Torenberg suggests that founders with less experience should take on greater risks because they have the most to gain and least to lose. Even if your business fails, the lessons that you learn could set you miles ahead of your competition in your next venture.
Key Takeaways
Everyone experiences a creativity block every once in a while and frameworks like these can help you overcome them. Frameworks provide a way to systemically frame and organize business ideas. They can also spark new ones by encouraging entrepreneurs break up their usual thought patterns and think outside the box.
TIP: Take notes as you reflect on your ideas. This way, you can begin identifying patterns between your interests. It’s also important to make time to allow your mind to wander. It’s difficult, if not impossible, to think your way out of a creativity block. By exploring new subjects and engaging in different activities, new ideas will often automatically come to you.
If you’re looking for some more inspiration, check out the resources below.
Resources to Inspire Your Next Business Idea
- The My First Million podcast is hosted by serial entrepreneurs, Sam Parr and Shaan Puri. Sam and Shaan regularly share little-known facts about successful companies and interview creators who have made millions by launching unconventional businesses like a dog ramp business and a soap opera blog. The hosts are unpretentious and candid which makes the podcast light and fun. They discuss business ideas that range from total moonshots to ones that are can be launched within the day. The podcast is perfect for anyone who is searching for their next business adventure. If you enjoy My First Million, you may want to check out the Trends newsletter ($299 a year) which shares research on industry trends and startup ideas. Both are products under the parent brand The Hustle.
- Side Hustle Nation was created by author and serial entrepreneur, Nick Loper, and is a phenomenal resource for discovering helpful tools and strategies for building successful businesses and passive income streams. Don’t be deceived by the name of the website. The vast majority of the businesses that are featured on the podcast (The Side Hustle Show) and on blog can be full-time gigs in addition to side hustles and sources of passive income.
- Discover creators who have successfully turned their passion into a career and business on My First Dollar, a series created by the crowdfunding platform Buy Me a Coffee. If you enjoy listening to authentic stories from content creators who are facing the odds and turning their creative passions into a business, check out ConvertKit’s Creator Stories and Creator Sessions. You may also enjoy YouTube’s new podcast “The Upload: The Rise of the Creator Economy,” which features stories from successful YouTubers who share what it took to launch their business and some tips and tricks that they learned along the way.
- Explore three different startup ideas each week in Elaine Zelby’s newsletter 3 Things. Each newsletter is short and cuts straight to the point. Her ideas also span across industries and are perfect for entrepreneurs are looking to expand beyond a single niche area. If you’re looking for more fresh insights into niche markets, check out her podcast (un)sexy which features interviews with pioneering entrepreneurs who are disrupting overlooked industries.
- Learn to think like a contrarian with former journalist turned investor, Codie Sanchez. Codie encourages entrepreneurs to pursue diversified revenue streams and business ideas that are typically overlooked by VCs. Sign up for her newsletter and follow her on Twitter @Codie_Sanchez to learn more about her contrarian framework. You can also learn more about Codie and how she monetized her newsletter on this episode of The Side Hustle Show.
- Listen to seasoned experts brainstorm unique business ideas and frameworks on the Unearthing Opportunities podcast by Opportunities.so. Upgrade to Opportunities Pro for access to more ideas and a curated database of research.
- Sometimes it’s helpful when you can ask questions and learn with others, in addition to learning from real world examples. You can immerse yourself in a community of like-minded individuals on subreddits like r/Entrepreneur, r/smallbusiness, r/startup, and r/freelance. There’s also the Indie Hackers community, although you must be invited to the platform to post and comment. Some entrepreneurs also find the Ask section of Hacker News inspirational and educational.
- If you prefer to actively explore real world examples, you may enjoy browsing through digital products that have been launched on Product Hunt and Gumroad.
- It’s no secret that the startup and VC world is mostly dominated by men. Luckily, there are podcasts like Meant For It and 9 to 5ish with theSkimm, which features the advice and journey of female entrepreneurs and business leaders.
- Dive into the implication of emerging technologies and dissect different business models with Tanay Jaipuria’s weekly newsletter and Below the Line by Kevin LaBuz. You can also follow Tanay on Medium.
- Follow the journey of other entrepreneurs and discover tips for staying motivated with Nicaila Matthews Okome on Side Hustle Pro.
This post was originally published at https://curiositysphere.com on November 12, 2021.
