Entrepreneurs
often think they must revolutionize the marketplace in order to succeed.
Research indicates the opposite is true.
Over a 10-year period, Amar Bhide at the Harvard
Business School has conducted research to answer the question, "What
differentiates a successful start-up from the masses of new businesses
that are created every year?"
In an interview in Inc. Magazine, he observes
that most entrepreneurs start in uncertain markets and without a proprietary
idea. They also lack special training or qualifications and usually
begin operations without significant amounts of capital.
He found that individuals who see an opportunity
to do something better, faster or cheaper start many successful businesses.
They typically already know the business and use this business intelligence
to make a small modification in what somebody else is already doing.
In other words, they evolve the existing business model in some profitable
way.
Several business plan competitions have been
held recently and have shown the wisdom of evolving a product or service
into a new enterprise rather than inventing something new. The same
people who supply guidance and money for many of the region's startup
companies — venture capitalists, angel investors, accountants,
attorneys and other successful business leaders — conducted the
judging for the competitions. Using the same criteria that are used
to pick potential winners from among their own clients, these professionals
selected competition finalists.
At the Brigham Young University competition,
the finalists included ideas that were better, faster or cheaper versions
of existing companies. First place went to uSight, an Internet software
provider that found a "pain" in the marketplace and built a solution
to solve it. USight recognized that one of the most difficult steps
in setting up an online business is establishing a merchant account
with a bank for the acceptance of credit card purchases. The evolutionary
solution here was to build a software application and process that
would allow the customer to establish the account overnight with an
online signature capability. USight already has more than 10,000 clients
and is growing at a 100 percent compounded rate. |
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The second place winner
was Open Air Cinema. The student founder created a company to show
movies in parks and amphitheaters using a portable, drive-in size
screen. Customers buy a ticket for an evening of live band and movie
entertainment while enjoying the outdoors. He has booked 36 events
for the summer and has been featured on Fox 13 and ABC affiliate Channel
4.
Leading Edge Solutions was awarded third place.
This team recognized a need in the aviation industry. Many private
planes were designed with Kevlar leading edges on their wings. Due
to weather deterioration, the parts need to be replaced at a considerable
cost. The "better" idea was to design an aluminum replacement for
the leading edge of the wing. The team is in the early launch stage
and has received significant attention from industry players.
Other finalists included a student team from
China that is launching a company to place vending machines in Chinese
high schools, and a graduate student who has designed a paint ball
gun that replicates a real gun in looks and action with a focus on
the law enforcement and military training markets.
Better products or service, cheaper methods of
production or delivery, and faster ways of reaching and serving the
customer are alternatives in today's markets. In each case, entrepreneurs
and students have recognized options to evolve something in an existing
market and thereby to improve their chances for success. |
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