WHAT IS A BUSINESS OPPORTUNITY?
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What is a business opportunity?
A business opportunity is an idea or a set of circumstances that make it possible to create or develop a profitable and sustainable business. This opportunity can arise in different ways, such as from a market need, a technological innovation, a change in consumer trends, a new regulation, among other factors. Identifying a business opportunity and seizing it in the right way can be the key to the success of a venture.
What is the difference between a business idea and a business opportunity?
A business idea is an initial proposition for a product or service that could generate revenue. In contrast, a business opportunity implies an existing market with an unmet need that can be addressed by a product or service. In other words, a business opportunity is an idea that has been validated by the market and has the potential to generate revenue and growth. The key difference is that a business opportunity has a more solid and realistic basis than a simple idea.
Examples of business opportunities that famous companies were able to exploit
HERE ARE SOME EXAMPLES OF FAMOUS COMPANIES THAT HAVE SEIZED BUSINESS OPPORTUNITIES:
- Netflix: the company started as a DVD rental service by mail, but in 2007 it realised the potential of online video streaming and began to develop its streaming platform, which today is one of the leading online entertainment services.
- Airbnb: The idea came about when the company's founders had trouble finding accommodation in San Francisco during a conference. They realised that there was an opportunity in the market for people to rent out their own houses or flats to other travellers.
- Instagram: Although the original idea was a check-in and geolocation app, Instagram's founders realised that people were using the app primarily for sharing photos. So they focused on that aspect and developed an image-based social networking platform, which quickly became one of the most popular in the world.
- Apple: In the 1970s, Apple was not the first company to produce personal computers, but it realised that there was an opportunity in the market for a computer that was easy to use and accessible to the average consumer. Thus was born the Apple II, which revolutionised the industry and laid the foundation for the company's subsequent success.
- Uber: the company seized the business opportunity in the growing need for transportation in cities, especially at night and during special events. Uber allowed users to order a vehicle online through a mobile app, and quickly became a popular alternative to the traditional taxi.
- Google: the company started as an online search engine, but quickly realised that there was an opportunity in the market for online advertising. They developed their AdWords platform, which allowed advertisers to place targeted ads to Google users based on their online searches.
These are just a few examples of how companies can identify business opportunities and seize them to succeed.
Examples of things that are not business opportunities
There are many examples of things that may not be a business opportunity.
HERE ARE SOME EXAMPLES:
- Unrealistic ideas: if the business idea is unrealistic, such as selling a product that does not exist, then it would not be a business opportunity.
- Small markets: if the target market is too small, there may not be enough customers to generate enough income to sustain the business.
- Lack of demand: if there is not enough demand for a product or service, the business will not succeed.
- Intense competition: If there are many companies competing in the same market, it can be difficult for a new business to enter and establish itself.
- High costs: if production or operating costs are too high, it may be difficult for the business to generate enough revenue to cover expenses.
- Regulations and licensing: if the business requires costly licences or strict regulations, it may be difficult for the business to comply with the requirements and remain profitable.
- Seasonality: if the business is seasonally dependent and sales are low during certain times of the year, it may be difficult to maintain the business throughout the year.
In short, there are many reasons why a business idea may not be a viable opportunity. It is important to carefully research and evaluate any business idea before investing time, money and resources into it.
Cases of well-known companies that failed due to lack of business opportunity
There are many cases of well-known companies that failed due to lack of business opportunities.
HERE ARE SOME EXAMPLES:
- Kodak: Kodak was a leader in the photography industry for many years, but it failed to adapt to the digital age and its business was affected by the advent of digital cameras. Despite having developed digital technologies, it failed to capitalise on them effectively and eventually filed for bankruptcy in 2012.
- Blockbuster: Blockbuster was a movie and video game rental chain that had its heyday in the 1990s and early 2000s. However, it failed to adapt to the change in the market with the advent of streaming platforms such as Netflix and could not keep up with technology and consumer preferences. As a result, it filed for bankruptcy in 2010.
- Borders Group: Borders Group was a bookstore chain that also fell victim to industry change and competition from online retailers such as Amazon. Despite trying to make inroads into online retailing, it was unable to compete with Amazon and eventually filed for bankruptcy in 2011.
- Pets.com: Pets.com was an online shop selling pet supplies. Although it managed to attract many customers and a large investment, its high shipping costs and difficulty in maintaining profitability due to intense market competition led to its failure in 2000.
In summary, these cases show the importance of adapting to changes in the market and consumer preferences, as well as the need to carefully evaluate any business opportunity before investing in it. It is very easy to generate business ideas, the hard part is finding an opportunity. If we had special glasses you would discover that we are surrounded by business opportunities, but the reality is that you have to learn to see them and with the tips in this TIP you will be able to do so too, as many others have done before you. You have to differentiate a business idea from a business opportunity. An idea is an intellectual elaboration, which is generated in our brain and therefore may exist only in our brain.
The difference lies in whether or not the idea contributes to solving a problem or satisfying a real need in the market. If the answer is positive, this is a business opportunity!!! An opportunity is something that emanates from the market. It happens that behind an opportunity there is always an idea, but ideas do not systematically correspond to opportunities. Consequently, we can arrive at the opportunity directly, detecting its existence, or through a previous idea that acts as a trigger for a process of discovery that will allow us to ascertain whether such an opportunity exists. It is easy to generate lots of ideas, the hard part is turning each idea into a real opportunity. The idea is a very small part of the success of a new venture (it is actually worth very little). What matters is how you execute the idea to turn it into an opportunity.
By way of example, if three entrepreneurs had the same business idea, in three months working on the same idea they would arrive at different results, they would create three different business models, with different objectives and planning and therefore with totally different evaluations. Therefore, an opportunity is much more than an idea. In fact, we can generate many ideas but only a few will correspond to a market opportunity. This is why a business idea has little value. The value lies in executing a business idea to turn it into an opportunity and finding all the resources to turn it into a company, i.e. what counts is how the entrepreneur works on the idea.
Successful companies are created from a business opportunity, i.e. a business opportunity, the entrepreneur first discovers a problem that a group of people are having (problem discovery) and then develops a solution for which they are willing to pay (client discovery). It is important to keep in mind that acting in the opposite direction is very dangerous and gives worse results, it costs much more to succeed in the creation of the new company. When I launch a product and only after launching it do I go looking for customers, I am more likely to fail.
- Easier way to successful entrepreneurship: Problem, customer, solution.
- More complex: product, customer, problem.
It is more complicated to start a business for the sole reason that you have a product. An opportunity is an opportunity when there is an underlying need. So it is the first thing you should do is to find out whether or not there is an opportunity for your product. The method of creating successful businesses that we propose is the Lean Startup (+), recommends the right path: first identify the problem well and then develop the solution and check that it provides sufficient value to the customer. The phrase that illustrates this orientation is: "Do what you sell, don't sell what you do".
ENTREPRENEURS AND BUSINESS OPPORTUNITIES
They are much more likely to succeed than necessity entrepreneurs. (see+ TIP with profiles of entrepreneurs). Creating a company just out of necessity without having found an opportunity is a typical mistake (in Spain >25% of entrepreneurs). Pessimists never see opportunities and over-optimistic people think there are plenty. Both positions are dangerous - which one are you in? (requirements to be an entrepreneur (+)). The truth is that if we could put on special glasses we would discover that we are surrounded by opportunities and that the problem lies in seeing them and taking action to seize them.
APPLY THIS TIP TO YOUR PROJECT
Now that you have learned how to identify an opportunity, reflect on these questions:
- Write down all the ideas and opportunities you come across during the programme on a drive.
- Indicates in the same drive and separately other opportunities that were good in the past and are no longer good.
- When videos were born it was an opportunity to set up a video club, today it is no longer an opportunity.
- When the movie Jurassic Park came out, it was an opportunity to sell dragons, but not today.
- Show that you have a business opportunity (much more than an idea).
- Does the idea of the opportunity you have identified differ?
- How have you identified your opportunity?
If you already have a project identify your ideas and write down why you consider them to be a real opportunity. If you are still looking for your project write down examples of business ideas and their corresponding opportunity. Show that you have more than just an idea in your hands and that you have a business opportunity.
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