Starting a business: How to identify bad business Ideas – Damilola Odunlade-Akeju, founder/CEO, DriveMe.ng
You must have heard top business executives say, “Idea rules the world”. Believe me, that saying is 100% true. The Apple iPhone was an idea. Amazon e-commerce business was an idea. My business, Driveme a one-stop fleet service platform that solves logistics and mobility issues with technology, was once an idea. In essence, every successful product is conceived from a deep understanding of the needs (or pain points, if you like) of a particular segment of the market.
New product development begins with an ideation process that describes a business manager’s imaginary world of solutions to an identified market problem. Because the ideation process may be generally fuzzy, the imaginary solutions are further screened and couched in general terms before being developed into a concept.
For instance, Investopedia described the ideation process that birthed the popular ride-hailing platform, Uber: “The concept for Uber was born one winter night during the conference (a tech event in Paris) when the pair (Travis Kalanick and Garrett Camp) was unable to get a cab. Uber was founded on a single idea: “What if you could request a ride from your phone?” Initially, the idea was for a timeshare limo service that could be ordered via an app.”
As you know, Uber is an ongoing success. The conception of great business ideas is not generally bound by any specifically marked fundamentals. A moment of startling insights could generate a trillion-dollar-worth of solutions. It is therefore very important for entrepreneurs to be alert to personal mental flashes and take note of momentary cognitive streaks.
However, a momentary flash of brilliant solutions to perceived market problems isn’t enough to build a successful business. Brilliant ideas can lack a richer view of the socio-economic environment, lifestyle trends and policy directions. Of course, that explains how nearly 2/3 of starts-up fold up within the first 5 years.
While the rate of business failure globally could be discouraging for most young people who are bristling with fresh energy, starting a business is not a dead-end.
It is possible to build a business product that survives and scales despite prevailing harsh economies, over-flooded channels, and fierce competitive environments.
The ability to track trends and resiliently re-tweak an original product/ business idea is key to overcoming the various headwinds of incredibly complex environmental and competitive forces. Such canny business disposition ensures an entrepreneur is not trapped by underlying operation glitches, ever-transforming consumer behaviours, and policy landscapes.
Thanks to our understanding of the market, at DriveMe.ng, we have been able to scale despite the challenging environment. We believe that every company should concentrate on their core business while DriveMe.ng manages its fleet of vehicles and drivers. We include a driver retraining program to strengthen experienced drivers’ driving culture, minimizing injuries and maintaining adherence to traffic laws and etiquette. These are valuable service features stemmed from our deep understanding of our market. And the feature propositions distinguish and differentiate DriveMe.ng from a raft of competitors out there.
DriveMe.ng ongoing success story put me in a position to alert you to bad business ideas that you should avoid in your entrepreneurial journey. I want you to succeed.
Precisely, the business ideas that are likely to fail exhibit one of these features:
a. Focus on Solutions Instead of Customers – Many business ideas are great, but the products that stem from them may not align with the consumers’ current needs. The consumers may be squeezed financially due to a bad economy. In some cases, the ideas’ relevance may lie somewhere in the future. Some ideas might have even passed their time in other cases. Therefore, any business idea that will succeed need not only be brilliant but have a direct impact on the immediate needs and desires of the consumers while taking into consideration the prevailing economic situation. For instance, the Blockchain industry may have its relevance in the future but for now, nothing is wrong with paper currency, and that is why so many people don’t care to know how it works.
b. Lack of differentiating features – ‘Me-too’ businesses or products are soon choked/ sidelined by the sharks in the red ocean. For a business idea to have a chance of survival in a fiercely contested market, it must offer something that others do not offer. Better still, it can offer an upgraded version of what is currently obtainable in the market. Uber was able to sideline the local taxi operations in the cab-hailing industry because it offered convenience, comfort, security, and affordability. Apple iPhones offer services that other phone makers do not offer. Some restaurants offer home-delivery services; and more. If your business product idea does not offer something unique in addition to what is already obtainable in the market, it would be a hard sale.
c. Dissonance with prevailing economy – Building a highly-priced product or services for a market located within a recessionary economy is not a great idea. A low-cost environment or depressing economy cannot absorb luxury. Successful business product ideas factor in economic realities and the status of target consumers. Pitching a luxury watch or an upper-scale eatery in a local setting is scary. A lounge in a suburb can get out of business sooner. So watch it – ensure your target market can afford your offering?
d. Functional misalignment – Product functionality must tie into the core needs of the target market. Samsung is reconsidering its business models these days since many low-cost android phones have flooded the market. Yank off the extra features that do not necessarily meet the needs of your target market.
e. Focus on Trends Only – As the internet went mainstream, many blogs cropped up here and there without defining their audience or choosing a peculiar niche. That is why most of them went burst in no time. CNN, Forbes, Punch Newspapers, and the Guardian Newspapers have a well-defined target audience. It is not enough to build a business product idea around prevailing circumstances. Kudos to LindaIkeji, a Nigerian blogger, she chose gossip blogging and scaled with it.
If you discover that your business idea titters towards any of the listed features, you should not quit. You can tweak and rework the existing business product ideas until it fits into the market.
Damilola Odunlade-Akeju is the founder/CEO of DriveMe.ng. DriveMe is a fleet service company. The business service propositions comprise driver hiring, training, and driver management. While the business delivers services to clients nationwide via its digital platforms, it is headquartered in Lagos. Check the web for more info.