How to find your next big money-making idea

No-one can predict the future, but there is plenty that every business can do to catch the next innovation wave. TOM McKASKILL points the way.

By Tom McKaskill

Grow your business Tom McKaskill

No-one can predict the future, but there is plenty that every business can do to catch the next innovation wave.

You might put growth down to superb execution, but I don’t think you can ever get away from just being lucky.

Being in the right place at the right time has certainly paid off big time for a lot of entrepreneurs. The same business concept implemented 12 months earlier would not have worked, and if they had done it 12 months later, they would have missed the wave. Then again, a lot of people would argue that you can create your own luck – so perhaps it isn’t luck then.

I am a great believer in looking for turning points in a market that can create growth spurts. If you can see them coming and position yourself to take advantage of them, you can catch the wave. In fact, you may be the only one to see the wave coming. While everyone else if trying to catch up, you are already on your way. So what do you look for?

You might start by looking into your own industry at the events, inventions or changes which stimulated growth.

What you will find is that there were breakthrough inventions; those products that dramatically improved performance, ones that substantially reduced cost, and those that brought forth a way of solving old problems in remarkably different ways. The companies that brought these to market grew dramatically.

Next, look at the changes in business concept. Which companies changed the way in which business was done and moved the goal posts?

Inventions or innovations that provide platforms for many new products and processes create growth for early adopters. This was certainly the case with early entrants into internet e-commerce sites and social networking. But the same trend occurred during the computer hardware boom of the 1970s and 1980s, and the biotech boom at the turn of the 21st century.

Many other firms achieved growth spurts by getting into the market early when regulations changed. New regulations create obsolete products, create new and replacement markets, and drive purchase decisions because there are penalties for non-compliance.

Look at historical trends. Trends such as the aging population, environmental concerns, obesity, infrastructure needs and increasing oil prices create demand for existing and new products over time.

In every industry there are macro trends, micro trends, new regulations, changing consumer tastes, inventions, innovations and new business concepts. In other words, there are lots of things happening and each one will throw up opportunities.

You can either be the laggard and wait until it hits you in the face, or you can be proactive and look out in the future to project which of these will affect your market and which you can exploit.

Growth will be facilitated where you have the capability and capacity to exploit a change where you can develop a sustainable competitive advantage.

Don’t do what everyone else is doing; that simply leads to competing in a commoditised market and you end up competing on price. Find a niche where you can do something different and special and that attracts customers to you because you have the best solution at that point in time.

Now turn that exercise into an ongoing capability within your business. In other words – “create your own luck!”

 

Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.

 

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