Chapter 5. Myth No. 5: The Best Business Ideas Are Already Taken
Truth No. 5: There Are an Infinite Number of Possibilities for Good Business Ideas

Introduction

Of all the myths surrounding business ownership, the notion that the best business ideas are already taken is the most exaggerated. It simply isn’t true. New businesses based on new ideas are started everyday. In addition, there is nothing wrong with starting a business that’s a slight variation of something that already exists. In fact, most new businesses do not launch revolutionary new products or services—they are just too expensive to bring to market. Though there are exceptions. FedEx, for example, was started in the 1970s on the revolutionary idea of creating a system to facilitate the overnight delivery of packages. Far more common are businesses such as The Pampered Chef, which sells unique but not revolutionary kitchen products, and Daisy Rock, which sells guitars that are designed specifically for women but are otherwise regular guitars.

The reason it’s easy to believe the myth that the best business ideas are already taken is that it seems as if the marketplace as crowded and full of products that meet every conceivable need. In many instances, this perception is correct. Think of how many different choices we all have for car insurance, credit cards, house paint, and tires. These are products in mature industries where it is difficult to think of new business ideas. But for someone who’s thinking about starting a business, there are ample opportunities elsewhere. For example, think about how society is changing. The aging of the population alone is spawning new business ideas almost daily—from fitness centers designed specifically for older people to cell phones that have large buttons and bright screens to make them easier for older people to use and see. There are also many problems that remain unsolved. This sentiment is captured by Philip Kotler, a marketing expert, who said:

"Think about problems. People complain about it being hard to sleep through the night, get rid of clutter in their homes, find an affordable vacation, trace their family origins, get rid of garden weeds, and so on. As the late John Gardner, founder of Common Cause, observed: ’Every problem is a brilliantly disguised opportunity.’"¹

The gist of Kotler’s point is that potential business owners have fertile ground in which to discern new business ideas. If you agree with this sentiment, it makes more sense to believe that the best business ideas have yet to be discovered rather than the best business ideas are already taken.

How, then, are new business ideas discovered? And what are the attributes of effective versus ineffective ideas? Even if we’ve convinced you by now that the best business ideas aren’t already taken, you’re still left with the task of coming up with a business idea as the foundation for starting your own business. To address these issues and further dispel the myth that the best business ideas are already taken, this chapter is divided into two sections. The first section focuses on the three most common sources of new business ideas. The second section focuses on techniques that potential business owners use to explore these sources and generate business ideas.

Three Most Common Sources of New Business Ideas

The first step in discerning new business ideas is to understand where business ideas come from. In our experience, business ideas emerge from three sources: changing environmental trends, unsolved problems, and gaps in the marketplace. A recognition and understanding of these sources is helpful to people who are trying to identify business ideas for themselves. Once you understand the importance of each of these sources, you’ll be much more likely to look for opportunities and ideas that fit each profile. One thing to be careful about as you read through each source is immediately thinking of an idea and quickly moving forward with it. Business owners often think of many ideas before they settle on the idea that becomes their business—so don’t rush the process. It’s also important not to select an idea simply because it is appealing. Although the conviction and passion for an idea is vitally important, the key to the selection process is to identify a product or service that people need and are willing to buy, not one that seems fun or attractive to sell.

Now let’s look at the three most common sources of business ideas, as reflected in Figure 5.1.

Figure 5.1. Three sources of new business ideas

Changing Environmental Trends

The first source of new business ideas is changing environmental trends. The most important trends for people to follow in thinking of starting their own business are economic trends, social trends, technological advances, and political action and regulatory changes. Changes in these areas often provide the impetus for new business ideas. When looking at environmental trends to discern new business ideas, there are two caveats to keep in mind. First, it’s important to distinguish between trends and fads. New businesses typically do not have the resources to ramp up quickly enough to take advantage of a fad. Second, even though we discuss each trend individually, they are interconnected and should be considered simultaneously when brainstorming new business ideas. For example, one reason the Apple iPod is so popular is because it benefits from several trends converging at the same time, including teenagers and young adults with increased disposable income (economic trend), an increasingly mobile population (social trend), and the continual miniaturization of electronics (technological trend). If any of these trends weren’t present, the iPod wouldn’t be as successful as it is.

Table 5.1 provides examples of how changes in environmental trends have provided the impetus for new business ideas and new businesses. The following is a discussion of each trend and how changes in a trend provide openings for new business and product ideas.

Table 5.1. Companies Started to Take Advantage of Changes in Environmental Trends

Economic Trends

An understanding of economic trends is helpful in determining areas that are ripe for new business ideas as well as areas to avoid. When the economy is strong, people are more willing to buy discretionary products and services that enhance their lives. Individual sectors of the economy have a direct impact on consumer buying patterns. For example, a drop in interest rates typically leads to an increase in new home construction, furniture sales, and appliance sales. Conversely, a string of corporate layoffs or a rapid decline in the stock market normally leads to a reduction in the demand for luxury goods such as expensive clothing and cars.

When studying how economic trends affect opportunities, it is important to evaluate who has money to spend and what they spend it on. For example, an increase in the number of women in the workforce and their related increase in disposable income is largely responsible for the number of clothing stores targeting professional women that have opened in the past several years. Some of the boutiques, like Ellen Tracey and Tory Burch, compete on a national scale, while others, like Olivine, in Seattle, are single-store boutiques that have been opened by an individual entrepreneur. There are also an increasing number of online stores that serve specific niche markets. For example, Shade Clothing is a realitvely new online store that designs and sells clothing for women who want apparel that is stylish yet not too revealing.

Similarly, as baby boomers reach retirement age, a sizeable portion of their spending will be redirected toward areas that make their retirment more comfortable, enjoyable, and secure. This trend will invariably spawn new businesses in many areas, largely because baby boomers have greater disposable income relative to previous generations. The most promising areas include finance, travel, housing, recreation, entertainment, and health care.

An understanding of economic trends can also help identify areas to avoid. For example, this is not a good time to start a company that relies on fossil fuels, such as airlines or trucking, because of high fuel prices. There are also certain product categories that suffer as a result of economic circumstances. This is not a good time to start a company that sells musical instruments, for example, such as violins, trumpets, and tubas. Domestic production of musical instruments has declined 3% annually over the past four years, and U.S. imports of musical instruments were down 7% from 2005 to 2006.² A major reason for this decline is that middle schools and high schools, which have historically been major buyers of musical instruments, have reduced their purchases due to budget cuts. In addition, the advent of online auction sites like eBay has made it easy for people to sell used musical instruments, which has cut into the market for new musical instrument sales.

Social Trends

An understanding of the impact of social trends on the way people live their lives and the products and services they need provides fertile ground for new business ideas. Often, the reason that a product or service exists has more to do with satisfying a social need than the more transparent need the product fills. For example, the proliferation of fast-food restaurants isn’t due primarily to people’s love for fast food but rather to the fact that people are busy and often don’t have time to cook their own meals. Similarly, social networking sites such as MySpace and Facebook aren’t popular because they can be used to post music and pictures on a Web site. They’re popular because they allow people to connect and communicate with each other, which is a natural human tendency.

Changes in social trends alter how people and businesses behave and how they set their priorities. These changes affect how products and services are built and sold. A sample of the social trends that are currently affecting how individuals behave and set their priorities is provided here:

• Retirement of baby boomers
• The increasing diversity of the workforce
• Increasing interest in healthy foods and "green" products
• New forms of music and other types of entertainment
• The increasing focus on health care, fitness, and wellness
• Emphasis on alternative forms of energy
• Increasing globalization of business
• Increased purchasing power of women
• Increased purchasing power of teenagers and preteens
• Increased availability of inexpensive yet relatively powerful personal computers

Each of these trends is providing the impetus for new business ideas and will continue to do so. For example, the increasing emphasis on alternative forms of energy is spawning business ideas ranging from solar power, to wind-generated electricity, to alternatives for fossil fuels. One new company, Greasecar Vegetable Fuel Systems, makes conversion kits that allow diesel engines to run on vegetable oil. Justin Carvan, the company’s founder, got interested in alternative fuels while at Hampshire College. The company is now growing at a rate of more than 200% per year and is projected to reach $2.5 million in annual sales shortly.³ The increasing emphasis on green products is another social trend that is spawning interesting new business ideas. An example of a recent startup in this area is South West Trading Co., a business that specializes in earth-friendly, alternative fibers and textiles such as yarns made from bamboo, corn, and even recycled crab shells.

Technological Advances

Technological advances provide an ongoing source of new business ideas. In most cases, the technology itself isn’t the key to recognizing business opportunities. Instead, the key is to recognize how technologies can be used and harnessed to help satisfy basic or changing human needs. For example, the creation of the cell phone is a technological achievement, but it was motivated by an increasingly mobile population that finds many advantages to having the ability to communicate with coworkers, customers, friends, and families from anywhere and everywhere.

Technological advancements also provide opportunities to help people perform everyday tasks in better or more convenient ways. For example, OpenTable.com is a Web site that allows users to make restaurant reservations online and now covers most of the United States. If you’re planning a trip to San Francisco, for example, you can access OpenTable.com, select the area of the city you’ll be visiting, and view descriptions, reviews, customer ratings, and in most cases the menus of the restaurants in the area. You can then make a reservation at the restaurant and print a map of directions. The basic tasks that OpenTable.com helps people perform have always been done—looking for a restaurant, comparing prices and menus, soliciting feedback from people who are familiar with competing restaurants, and getting directions. What OpenTable.com does is help people perform these takes in a more convenient and expedient manner.

Another aspect of technological advances is that once a technology is created, products often emerge to advance it. For example, the creation of the Apple iPod has created an entire industry that produces iPod accessories. An example is H2OAudio, a company that was started by four former San Diego State University students that makes waterproof housings for the iPod and the iPod nano. The waterproof housing permits iPod users to listen to their iPods while swimming, surfing, snowboarding, or engaging in any activity where the iPod is likely to get wet. There is a wide variety of other accessories available for the iPod, from designer cases to car rechargers. It is now estimated that for every $3 spent on an iPod, at least $1 is spent on an accessory.⁴ Technology advances also give us new platforms to sell everyday products and services more efficiently and effectively. For example, at least four companies on the 2007 Inc. 500 started by selling their products on eBay.⁵

Political Action and Regulatory Changes

Political and regulatory changes also provide the basis for new business ideas. For example, new laws create opportunities for business owners to start firms to help companies, individuals, and governmental agencies comply with the laws. A case in point is the No Child Left Behind Act of 2002. The act, which is based on the notion of outcome-based education, requires states to develop criterion-based assessments in basic skills to be periodically given to all students in certain grades. Shortly after the act was passed, Kim and Jay Kleeman, two high school teachers, started Shakespeare Squared, a company that produces materials that help schools comply with the act. On some occasions, changes in government regulations motivate business owners to start firms that differentiate themselves by "exceeding" the regulation. For example, several years ago, the Federal Trade Commission changed the regulation about how far apart the wood or metal bars in an infant crib can be. If the bars are too far apart, a baby can get an arm or leg caught between the bars, causing an injury. A obvious business idea that might be spawned by this type of change is to produce a crib that is advertised and positioned as "exceeding" the new standard for width between bars and is "extra safe" for babies and young children. The change in regulation brings attention to the issue and provides ideal timing for a new company to reassure parents by providing a product that not only meets but exceeds the new regulation.

Political change also engenders new business and product opportunities. For example, global political instability and the threat of terrorism have resulted in many firms becoming more security conscious. These companies need new products and services to protect their physical assets and intellectual property as well as protect their customers and employees.

Unsolved Problems

The second approach to new business ideas is unsolved problems. Problems can be experienced or recognized by people through their jobs, hobbies, or everyday activities. Consistent with this observation, many companies have been started by people who have experienced a problem in their own lives, and in the process of solving the problem realized that they were on to a business idea. For example, in 2006 Christine Ingemi, a mother of four children under 11, became concerned by how loud her children were playing their MP3 players. She said she could hear music coming through her children’s MP3 players’ earphones when she was driving her van with the music on. To prevent her children from playing their MP3 players too loud, she and her husband, Rick, did some research, interviewed several audiologists, and invented a set of earbuds that limit the volume entering the user’s ears. After her kids started using the earbuds, Ingemi began getting inquires from other parents asking where they could get a similar device. To make the device available to others, Ingemi started a business, called Ingemi Corp., to sell her IHearSafe earbuds.⁶ Similarly, Laura Udall, another mother, invented an alternative to traditional backpacks when her fourth-grade daughter complained daily that her back hurt from carrying her backpack. After conducting research, obtaining feedback from student focus groups, and building several prototypes, Udall invented the ZUCA, a backpack on rollers that strikes the ideal balance between functionality and "cool" for kids. ZUCA is now a successful company, and its rolling backpacks can be purchased online or through a number of retailers.

Advances in technology often result in problems for people who can’t use the technology in the way it is sold to the masses. For example, some older people find traditional cell phones hard to use—the buttons are small, the text is hard to read, and it’s often difficult to hear someone on a cell phone in a noisy room. To solve these problems, GreatCall Inc., a recent startup, is producing a cell phone called the Jitterbug, which is designed specifically for older users. The Jitterbug features large buttons, easy-to ready text, and a cushion that cups around the ear to improve sound quality. The phone also includes a button that connects the user directly with an operator who can assist in completing a call. Another company, Firefly Mobile, has created a cell phone designed specifically for tweens, ages 8 to 12. The phone only weighs two ounces and is designed to fit a kid’s hand. The phone includes appropriate limitations for a young child and speed-dial keys for Mom and Dad.

A useful technique to use when confronted with a difficult problem is to find an instance where a similar issue was solved and then apply that solution to your problem. An example is provided by Susan Nichols, the founder of Yogitoes (www.yogitoes.com), a company that makes nonslip rugs for Yoga enthusiasts. Several Yoga positions require participants to strike poses where they balance their weight on their feet at an angle. In this position, it is easy to fall or slip when using a regular rug or mat. Nichols looked for a Yoga mat that would prevent her from slipping but found out that no one knew how to make one. So she started looking for an example of a product that was designed specifically to prevent it from slipping on a hard floor, to study how it functioned. Eventually, she stumbled upon a dog bowl with rubber nubs on the bottom to prevent it from sliding when a large dog ate or drank from it. Using the dog bowl (of all things) as a model, Nichols found a manufacturer who helped her develop a rug with small PVC nubs that prevent yoga participants from slipping when they perform Yoga moves. Nichols started Yogitoes to sell the rugs, and sales were on track to hit $3 million in 2006.⁷

Many other colorful examples of people who launched businesses to solve problems are included in Table 5.2.

Table 5.2. Companies Started to Solve a Problem

Gaps in the Marketplace

The third source of business ideas is gaps in the marketplace. There are many examples of products that consumers need or want, that aren’t available in a particular location or aren’t available at all. Part of the problem is created by large retailers, like Wal-Mart and Costco, which compete primarily on price and offer the most popular items targeted toward mainstream consumers. While this approach allows the large retailers to achieve economies of scale, it leaves gaps in the marketplace. This is the reason that clothing boutiques and specialty shops exist. These businesses are willing to carry merchandise that doesn’t sell in large enough quantities for Wal-Mart or Costco to carry.

There are also product gaps in the marketplace, many of which represent potentially viable business opportunities. For example, in 1997, Julie Aigner-Clark realized that there were no videos on the market to expose her one-year old daughter to music, the arts, and science. To fill this gap, she started Baby Einstein, a company that produced uplifting videos for children aged three months to three years. The company did so well that it was acquired by Disney in 2001. A more common example of a company that filled a gap in the marketplace is provided by p.45 (www.p45.com), a women’s clothing boutique in Chicago. The store carries innovative collections from young fashion designers, original pieces of jewlery made by Chicago area residents, unique shoes, and accessories that complement the clothing in the store. p.45 fills a gap in the marketplace by offering people with particular tastes a line of clothing and accessories that they couldn’t find in mainstream stores. It is also located in an area of Chicago that has a sufficient critical mass of upscale shoppers to support the store.

A common way that gaps in the marketplace are recognized is when people become frustrated because they can’t find a product or service that they need and recognize that other people feel the same frustration. This scenerio played out for Lorna Ketler and Barb Wilkins, who became frustrated when they couldn’t find stylish "plus-sized" clothing that fit. In response to their frustration, they started Bodacious (www.bodacious.ca), a store that sells fun and stylish clothing for hard-to-fit women. Ketler and Wilkins’ experience illustrates how compelling a business idea can be when it strikes just the right cord by filling a gap that deeply resonates with a specific clientele. Reflecting on the success of Bodacious, Wilkins said:

"It’s so rewarding when you take a risk and it pays off for you and people are telling you every single day, ’I’m so glad you’re here.’ We’ve had people cry in our store. It happens a lot. They’re crying because they’re so happy (that they’re finding clothes that fit). One woman put on a pair of jeans that fit her, and she called me an hour later and said, ’They still look good, even at home!’ Sometimes people have a body change that happens, whether they have been ill or had a baby, and there’s lots of emotion involved in it. If you can go out and buy clothes that fit, that helps people feel good about themselves."⁸

A related technique for generating new business ideas is to take an existing product or service and create a new category by targeting a completely different target market. This approach essentially involves creating a gap and filling it. An example is PopCap games (www.popcap.com), a company that was started to create a new category in the electronic games industry called "casual games." The games are casual and relaxing rather than flashy and action-packed and are made for people who want to wind down after a busy day. Currently, 90% of the company’s customers are women 25 years old or older, which is a completely different demographic than the young males that the mainstream game manufacturers target.⁹ Another approach to filling gaps in the marketplace is to service an area that is lacking a particular product or service. For example, SPC Office Products (www.spcop.com) is a company that sells the same products as Staples and Office Depot but focuses on towns under 20,000 in population. As a rule of thumb, SPC doesn’t like to open a store that’s within 120 miles of a Staples or Office Depot.¹⁰

Other examples of companies that were launched to fill gaps in the marketplace are included in Table 5.3.

Table 5.3. Companies Started to Fill a Gap in the Marketplace

Techniques for Generating Ideas

Most businesses are started in one of two ways. Some businesses are internally stimulated. An individual, who hadn’t necessarily been thinking about starting a business, sees a problem or recognizes a gap in the marketplace and creates a business to fill it. This was the case with Laura Udall of ZUCA as well as Julie Aigner-Clark of Baby Einstein, who were discussed earlier. Other businesses are externally stimulated. In this instance, an individual has a strong interest in starting a business and then starts looking for ideas for businesses to start. This was the case with Jeff Bezos, the founder of Amazon.com. In 1994, Bezos quit his lucrative job at a New York City investment firm and headed for Seattle with a plan to find an attractive opportunity and launch an e-commerce firm. After kicking around a number of different ideas, he settled on books and started Amazon.com.

This section of the chapter focuses on two techniques that people use to try to explicitly generate new business ideas. These techniques are most commonly used by people searching for business ideas but are also used by people who spot an opportunity (like Laura Udall did when she realized that her daughter needed a different kind of backpack) and want to flesh-out their ideas. Having knowledge about each of the three most common sources of business ideas, articulated here, enhances each of these techniques.

One point to remain mindful of while considering these techniques is that business ideas take time to develop, so it’s important not to become discouraged if an idea doesn’t surface quickly. It’s also important to realize that the best ideas aren’t necessarily the most original—as long as the idea is "different" enough that it adds unique value for the consumer. As mentioned earlier in the chapter, it normally exceeds the budget of a new firm to educate the public about a revolutionary or completely original idea.

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Why the Most Original Ideas Aren’t Always the Best Ideas

When considering business ideas, it’s important to realize that the best ideas aren’t always the most original ones, as indicated at the beginning of the chapter. New firms don’t often have the capital to effectively get their names and products or services quickly recognizable.

The diagram pictured here provides a quick visual depiction of the four categories of new business ideas and the most realistic categories for new firms. The simplest ideas (existing products in existing markets) are located in Box 1 and are generally undesirable because they are in crowded fields with stiff competition. The trickiest and most expensive to implement ideas are in Box 4 (new products in new markets) and are usually avoided because they put a new firm too far out on a limb. The most practical ideas for most new businesses are located in either Box 2 or Box 3. The vast majority of new businesses referred to in this book are Box 2 or Box 3 startups.¹¹

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Brainstorming

The term brainstorming is a catch phrase that means different things to different people. In general, brainstorming is simply the process of generating several ideas about a specific topic. It can easily be used to generate business ideas. The approaches range from a person sitting down with a yellow legal pad and jotting down interesting business ideas to formal "brainstorming sessions" led by moderators that involve a group of people.

In a formal brainstorming session, the leader of the group asks the participants to share their ideas. One person shares an idea, another person reacts to it, another person reacts to the reaction, and so on. A flip chart or whiteboard is typically used to record the ideas. A productive brainstorming session is freewheeling and lively. The session is not used for analysis or decision-making—the ideas generated during a brainstorming session need to be filtered and analyzed, but this is done later. The number one rule of a brainstorming session is that no criticism is allowed, including chuckles, raised eyebrows, or facial expressions that express skepticism or doubt. Criticism stymies creativity and inhibits the free flow of ideas.

Brainstorming sessions dedicated to generating new business ideas are often less formal. For example, during the creation of Proactiv, a popular acne treatment product, Dr. Katie Rodan, one of the company’s founders, hosted dinner parties at her house and conducted brainstorming sessions with guests. The guests included business executives, market researchers, marketing consultants, the chief financial officer of a major company, an FDA regulatory attorney, and others. Rodan credits this group with helping her and her cofounder brainstorm a number of ideas that helped shape the company and move the process of starting the company along.¹² Similarly, Sharelle Klause, the founder of Dry Soda, a company that makes an all-natural soda that’s paired with food the way wine is in upscale restaurants, tested her idea by first talking to her husband’s colleagues, who were in the food industry, and then tapped into the professional network of a friend who owned a bottled water company. Through this process she met a chemist, who was instrumental in helping her develop the initial recipes for her beverage. Klause also went directly to restaurant owners and chefs to ask them to sample early versions of her product.¹³ While this approach only loosely fits the definition of brainstorming, the spirit is the same. Klause was bouncing ideas and early prototypes of her product off others to get their reactions and generate additional ideas.

Approaches to brainstorming are only limited by your imagination. For example, to teach her students an approach to utilizing brainstorming to generate business ideas, Marcene Sonneborn, an adjunct professor in the Whitman School of Management at Syracuse University, uses a tool she developed called the "bug report" to help her students brainstorm business ideas. She instructs her students to list 75 things that "bug" them in their everyday lives. The number 75 was chosen because it forces students to go beyond thinking about obvious things that bug them (campus parking, roommates, scraping snow off their windshields in the winter), and think more deeply. On occasion, students actually hold focus groups with their friends to brainstorm ideas and fill out their lists. Another particularly effective approach to brainstorming is to utilize the three sources for new business ideas as a way of organizing the discussion. Imagine this: Suppose you are part of a small group that is trying to brainstorm ideas for a new type of fitness center. You know the market is too crowded to support another generic center, so you’re looking for novel ideas. You create three columns on a whiteboard labeled Changing Environmental Trends, Unsolved Problems, and Gaps in the Marketplace. You then start brainstorming specific ideas, looking at each category individually, and then at how the categories interact with each other. After brainstorming dozens of ideas in each category, you start grouping the ideas into themes or patterns to create more solid ideas. One pattern jumps out at you: The population is aging, older people are increasingly interested in fitness, many of the exercise machines and classes taught in traditional fitness centers aren’t suitable for older people, and there are no fitness centers designed specifically for the 50+ demographic. Based on this pattern, your first solid idea is to create a fitness center designed specifically for people 50 years old and older.

Library and Internet Research

A second approach people can use to generate new business ideas is to conduct library and Internet research, as discussed briefly in Chapter 2. A natural tendency is to think that an idea should be chosen, and the process of researching the idea should then begin. This approach is too linear. Often, the best ideas emerge when the general notion of an idea, like opening an innovative type of fitness center, is merged with extensive library and Internet research, which might provide insights into the best type of innovative fitness center to pursue.

Libraries are often an underutilized source of information for generating business ideas, as mentioned earlier in the book. The best approach to utilizing a library is to discuss your general area of interest with a reference librarian, who can point out useful resources, such as powerful online resources that libraries often have access to. An example is Mintel, an online resource that publishes market research on all major industries and subcategories within industries. Mintel has literally dozens of pages of information on the "Health and Fitness Club" industry alone. Spending time reading through the information could spark new ideas for fitness centers or help affirm an existing idea. Just a few minutes reading Mintel’s report bodes well for the idea of opening a fitness center for the 50+ demographic. According to the report, while 45% of people say they exercise regularly, only 22% belong to fitness clubs, which suggests there are opportunities for membership growth. Households with higher incomes are more likely to belong to fitness clubs, which fits the 50+ demographic. Individuals who are 35 to 54 are the most likely candidates to join health clubs. Interestingly, 67% of the people who currently don’t belong to a fitness club said they would join if they knew the activities would keep them motivated. Mintel’s summary of the fitness club industry concluded by stating, "It is important for health clubs to tailor their offerings to their target market."¹⁴ This is exactly what a fitness center for the 50+ demographic would do. Equally insightful information is available for all industries, so it might be a good use of your time to visit a university or large city library to access the Mintel report on your area of interest.

Internet research is also important. If you’re starting from scratch, simply type "new business ideas" into Google or Yahoo!, and it will produce links to newspaper and magazine articles about the "hottest" and "latest" new business ideas. While these types of articles are general in nature, they provide a starting point if you’re trying to generate new business ideas from scratch. If you have a specific idea in mind, like the fitness center concept we’ve been discussing, a useful technique is to set up a Google or Yahoo "email alert" using keywords that pertain to your topic of interest. Google and Yahoo! alerts are email updates of the latest Google or Yahoo! results (i.e., Web site updates, press releases, news articles, blog postings) based on your topic. This technique, which is available for free, will feed you a daily stream of news articles and blog postings about specific topics.

Summary

The ability to generate a good business idea is a key ingredient to launching a successful startup. Many businesses fail not because the people involved weren’t committed or didn’t work hard; they fail because the businesses weren’t good ideas to start with. Don’t let this happen to you. Following the frameworks and suggestions provided in this chapter can help you enhance your chances of coming up with a business idea that is successful.

The next chapter deals with the myth that no one can compete against Wal-Mart and the other big-box retailers. This myth is true in part—virtually no one can compete against big-box retailers at their own game. New businesses can compete if they understand what the big-boxes’ strengths and vulnerabilities are and adjust their strategies accordingly.

Endnotes

1. Philip Kotler, Marketing Insights from A to Z (New York: John Wiley & Sons, 2003), 128.

2. First Research, 2007.

3. S. Cooper and others, "The Hot List," Entrepreneur.com, December, 2006.

4. Damon Darlin, "The iPod Ecosystem," The New York Times, February 3, 2006.

5. "Inc. 500," Inc., September 2007, 77.

6. K. Spiller, "Low-Decibel Earbuds Keep Noise At a Reasonable Level," The Nashua Telegraph, August 13, 2006.

7. "A Foothold in the Yoga Market," Business 2.0, July 2006, 64.

8. Ladies Who Launch, accessed October 4, 2007 (see chap. 1, n. 4).

9. nPost, accessed October 4, 2007 (see chap. 1, n. 11).

10. Bailey, J., "How One Small Store Thrives Among Giants," Startup Journal home page, http://www.startupjournal.com.

11. "Getting New Business Ideas," Adapted from PlanWare, http://www.planware.org, accessed September 1, 2007.

12. K. Rodan, "Entrepreneurial Thought Leaders" Podcast, Stanford Technology Ventures, http://stvp.stanford.edu/, April 2006.

13. Greg Galant and Sharelle Klause, "VV Show #35," Venture Voice: Entertaining Entrepreneurship, http://www.venturevoice.com, March 2006.

14. Mintel, 2007.