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What Makes a Great Opportunity?
We know that opportunities start as ideas and that they can be cultivated though several different processes, but the critical question is “What makes a great opportunity?” After all the thinking, searching, and analysis, how do you separate opportunities that have real, actionable value from those that simply don’t make the cut?
A great opportunity:
Solves a problem for a customer
Exists in a strategic space that isn’t too crowded
Can be executed in a strategic space where you can maintain a competitive advantage
Has a reasonable potential to help you achieve your goals
Fills a critical customer need that may or may not be obvious to them
Is not obvious to others who don’t have your background, experience, or insight
Does not exist independently of you, the entrepreneur
Let’s take a closer look at what makes an opportunity great.
It Solves Problems for Customers
This may seem obvious, but in practice it’s not. The word “problem” indicates a negative emotion, but that’s not necessarily the case. Customer problems fall into two broad categories—resolving pain and creating delight. Really great products do both at the same time. Products that do neither have little potential for success.
Customers buy benefits, not features. All the flashy features in the world will not help if they don’t provide concrete benefits for the customer. This is why it’s so critical for entrepreneurs to think in terms of solving customers’ problems. Pain and delight are extreme emotions, and these are the sorts of emotions that cause customers to adopt new products. Incremental improvements and flashy features without benefits are unlikely to sway potential customers.
Quick Case: The smartphone market is littered with new entrants that ultimately failed due to the overzealous adding of features without tangible benefits. In 2005, ESPN, the Entertainment and Sports Programming Network, decided that what the smartphone users of the day were missing was an ESPN-branded phone. In the days before apps were the established standard, the ESPN phone could receive up-to-the-minute sports alerts and was truly a cut above other phones for the sports enthusiast when it came to sports news and scores. The phone flopped and was discontinued nine months later after reaching 30,000 customers—well below the 500,000 ESPN needed to break even on their investment.2
While the sports alerts feature certainly did provide enthusiasts with the benefit of very current news and scores, the phone fell short of consumer expectations in nearly every other way. The high price tag, cut-rate hardware, and restrictive contract failed to impress. Furthermore, ESPN committed to the release of this phone while simultaneously offering sports news and scores through services available from Verizon, Sprint, and other wireless carriers.
In the end, the phone did not do enough to solve the problems faced by its prospective customers, and it also failed to thrill. ESPN relied on brand recognition and a high-powered marketing campaign to pick up the slack in their value proposition—never a good idea.
It Exists in a Strategic Space That Isn’t Too Crowded
It’s no secret that new ventures are entering a business landscape that is already crowded with established competitors. This means that the best way for new ventures to survive is to carve out a niche that they can dominate rather than compete as a small fish in a big pond. The space that your venture occupies can’t be written on a scrap of paper and pulled out of a hat. You must position yourself strategically.
What this means is that while passion about your venture is a necessary prerequisite for success, it isn’t enough. Just because you’re passionate about fitness does not mean that your gym will be successful. There are a lot of gyms out there—what sets yours apart?
It Maintains a Competitive Advantage
Competitive advantage is what makes your venture better at doing whatever it is you do than your rivals in the same space. Competitive advantage is detailed in the next section, but for now, know that if your opportunity can’t be executed strategically in a manner that allows you to maintain competitive advantage, then it isn’t a great opportunity.
It Has a Reasonable Potential to Help You Achieve Your Goals
Successful entrepreneurs don’t start new ventures because they believe it’s good for their health, and they don’t start new ventures to get rich. When it comes to moneymaking potential, starting your own business is one of the worst ways to become independently wealthy. In fact, once your venture clears the startup stage and begins courting investors, remember that professional investors tend to shy away from entrepreneurs who are looking to get rich from their business.
Obviously you want to benefit financially from your successful venture. However, the road to startup wealth is long and extremely uncertain. If your primary goal is to get rich fast, this isn’t the path for you. The stories you’ve read about tech “unicorns” that exploded into high growth and profitability are the extreme exception to the rule.
Investors look for talent, passion, and proof that your business can win. When assessing an opportunity, consider the ways in which it has the potential to achieve your goals. Of course, there are no guarantees, but if an opportunity isn’t likely to help you achieve your personal goals, then why would you follow through with it at all?
It Is Not Obvious to Others
The unique blend of experience, insight, and passion that each entrepreneur brings to the table—his or her entrepreneurial thumbprint—is a key decider in what makes an opportunity great for that person and not for another. If a problem exists that a customer is aware of, then the idea of solving that problem is an obvious one, along with some ideas about how to solve it.
Remember that ideas are not opportunities. An entrepreneur with the right background, experience, and talent may see an executable solution to a problem. Because of his or her unique thumbprint, this executable solution might be a good opportunity. Others who are looking at the same problem may not see an opportunity so easily, if at СКАЧАТЬ