In the Market for New Venture Opportunities?
Simple Strategies to identify new market opportunities for startup founders.
You can’t have lived on earth without hearing that “opportunity knocks but once.” It is one of those things we like to say to teach people a lesson about the importance of being prepared for defining moments. The sentence gives the sense that opportunity is something that finds you where you are, given that “opportunity knocks.”
In business, however, if this statement were always true, there would be an astonishing number of businesses that were never built and founders who never became so. While opportunity can find you in business, you would do well to find it yourself. While specific opportunities might never be available more than once, opportunity in itself is not a once-in-a-lifetime occurrence.
Opportunity is a necessary precursor to building a new venture. An opportunity is an idea with real promise and potential. While an idea is a picture of or belief in how something should or could work, an opportunity is more than that; it goes beyond belief and imagination. Opportunities in business come in different forms and can often be seen to change over time, especially depending on the industry. As a new founder or an existing business leader, your ability to identify opportunities is crucial to the success and longevity of your organization. Three major ways venture opportunities can present themselves.
Interested in learning about practical strategies for your product or business? Sign up for our 1001 with Gumi newsletter for business executives and senior employees.
Types of Opportunities
- New product or service
- Existing product, but in a market where it is not available
- Franchise tested and tried.
New product or service
This is a product or service that does not yet exist. Think of the first personal computers produced, sticky notes, and Virgin Galactic’s commercial space flights. While the personal computer is very familiar and has become a part of daily life, there was a time when it was novel, a new product that eventually blew up. New is promising and scary because it has probably not been done before, at least not successfully, and there are not enough use cases to support venturing in this direction. However, on the side of promising, new can be extremely rewarding if it achieves product-market fit.
Existing product, but in a market where it’s not available
Some products or services already exist and are successful but are not available in markets where there could be a lot of demand. This opportunity involves introducing such products to promising markets, and you can either act as a distributor of those products or replicate and adapt them in your market.
This format is also applicable to services as well. Uber disrupted the traditional ride-hailing business by introducing a different model; customers could order rides from wherever they were and be connected to drivers who could earn on the platform in a flexible work model. This service has been replicated in different countries worldwide; China’s Didi, OlaCabs in India, and Estonia’s Bolt, which operates globally.
Adaptation can be crucial when introducing a service or product to a market because context matters and will determine the success of that venture. Nigeria’s Gokada, for example, introduced ride-hailing services in Lagos using okadas (commercial motorcycles), which are a popular alternative to four-wheelers because of Lagos’ famed traffic.
Franchise tried and tested
The chances that the most popular places to eat where you live are franchises is very high. Investopedia clarifies what a franchise is, “a business whereby the owner licenses its operations — along with its products, branding, and knowledge — in exchange for a franchise fee.” Franchises allow entrepreneurs to leverage the success of existing businesses, and when they go well, they are beneficial for the franchisee and franchisor. The former enjoy the expansion and the latter success without starting from scratch. While food and beverages are the most popular sector for franchises, they also exist in several sectors like car rentals, accommodation, and home furniture.
Sources of Opportunities
While knowing what shape and form opportunities come in is important, it is equally so to have practical ways of finding them. Some ways or sources of opportunities are enveloped in everyday and mundane activities, while others require more deliberate action. These sources include customer insights, competitors, industry trends and insights, and experiences.
(Deep) Customer Insight
Successful businesses are often built on deep customer insights about unsolved problems of potential clients — Sanjeev Bikhchandani.
In the TEDx talk where this quote was culled, Sanjeev, the founder of Info Edge and co-founder of Ashoka University, narrated a story from when he was in University and companies would come to recruit during placement week. He realized that the tough competition for the best candidates amongst these companies was an opportunity to act upon. Students could benefit from information on compensation packages to make their decisions, and companies could be better placed to recruit the talent they want by offering competitive salaries. Sanjeev’s company began offering salary reports to university graduates and selling salary reports to companies in the 90s. It was valuable information, especially when the internet was still new in India. That initial business has grown into Nakuri.com, one of India’s most popular job sites.
Businesses do not exist without customers, and paying attention to them (their needs, pain points, challenges, preferences) is valuable for uncovering new opportunities. This could mean developing an entirely new product or improving on an existing one. Businesses are built for people, regardless of the industry, and listening to them helps you create products and services that are valuable to them. Customer insights can be derived by conducting surveys, interviews, reviews, A/B testing, social listening, etc. Through secondary sources like data and reports published by organizations and researchers.
Competitors
If you are already in business, you have competitors. Carrying out a competitor analysis is a great way to identify opportunities. Competitor analysis involves finding out key information about competitors, including features, market share, pricing, marketing, differentiators, strengths, weaknesses, geography, culture, and customer reviews. It is a study that focuses on strengths and weaknesses, and the results produced can show you gaps that your business can fill and weaknesses that you can improve upon.
Competitive analysis can help you learn how your competition works and identify potential opportunities where you can out-perform them. It also enables you to stay atop of industry trends and ensure your product is consistently meeting — and exceeding — industry standards.
If you are not already in business, a competitor analysis remains valuable, and it involves studying other companies or businesses offering the same service or product you plan to, with a focus on the most closely aligned as well as those that would be the biggest threats when you go into business.
Industry Trends and Insights
Organizations are dedicated to producing and publishing insights on specific industries or even across industries. This information comes in various formats; newsletters, podcasts, podcasts, journals, and books. By following industry trends and insights, you can find information on what is new, promising, and what works. Top picks include Harvard Business Review, Bloomberg, The Economist, Stears Business, and yours truly, Gumi articles and newsletters 😉
These trends and insights are an important reference for your opportunity search because they present data, facts, and cases that give credence to the worthiness of an opportunity. For opportunities that are already established, they allow you to understand existing models and the advantages and limitations of organizations operating those models or offering that product. When the opportunity is mostly theoretical with few or no real-life applications, trends and insights tell you what may or may not be possible based on expert analysis and opinion. Practical ways to stay updated include subscribing to publications, joining relevant associations, setting Google alerts for key terms, and following influencers in the industry on social media.
Experience
Our experiences contain a lot of insight, and if we paid more attention, we would discover opportunities in the things we observe and our daily interactions. If you are subscribed to our Bored Brain newsletter, you have probably come across the innovation story about William Lee. In case you haven’t, William Lee was born in the Elizabethan age, and there was a standing decree at the time that all people wear knitted items. On returning from University, he noticed one evening while watching his mother and sister knit that the process involved repeatedly looping yarn to create stitches, a time-consuming process. He decided that this process could be more efficient, and he dedicated himself to building a machine that would do this. This resulted in the invention of the stocking frame, which is a precursor to modern textile manufacturing. Today, many machines are used in textile production operations — William’s principle of building his machine.
Identifying opportunities in our experiences requires attentiveness to what happens around us, seeing problems, and thinking about possible solutions. These problems must be problems not just for you but also for other people because those are your potential customers.
Knowing what form opportunities come in and where they can be found is completed by understanding practical ways to find them. Whether you are an aspiring entrepreneur or an established organization, research should be an integral part of your operations in whatever industry. Four key areas you need to research to find opportunities are;
- Consumers
- Competition
- Complimentary products and
- Macroeconomic environment and trends.
One of the first things you should remember in identifying business opportunities is that all enterprising ventures answer a particular human need in one way or another. Whether a product or a service, it must respond to the buyers’ needs or want. — Euromonitor International.
Interested in learning about practical strategies for your product or business? Sign up for our 1001 with Gumi newsletter for business executives and senior employees.
What to do when you find an opportunity:
What to do then, when you have found an opportunity or when it comes knocking? How do you know whether to open the door and how to make the most of it if you do? In our next Innovation Learning Series article, we will be walking you through how you can evaluate opportunities to know what is worth pursuing.
If you enjoyed this article and thought someone out there might as well, don’t hesitate to share it. Spread knowledge!
Judith.
