Business ideas can come from original ideas or adaptations. Both have different risks. While an original idea may not be tested in the market, adaptation involves less risk because it relies on existing products or services to be further developed, modified, or applied. For example, an entrepreneur applies ride-hailing in developed countries to their country. Or, they adapt products abroad and modify them slightly to suit local tastes.
Idealism might say original ideas are better than adaptations. Developing original ideas requires us to always think outside the box to find product gaps. Invention and innovation come from original ideas. Thus, generating original ideas means constantly training us to become inventors and innovators.
Why is a business idea important?
Businesses produce goods or provide services to satisfy consumer needs and want to make a profit. They sell it to consumers at a price they are willing to pay. To operate profitably, they carry out activities from production to marketing efficiently. By operating efficiently, they can generate more revenue than spent on operating costs.
However, companies must compete with each other to satisfy consumers and, therefore, make a profit. And beating competitors requires them to offer superior products. In addition, excellent operations are also vital as it affects their competitiveness. So, where do superior products and operations come from? They come from a business idea.
So, business ideas are essential for several reasons. First, a new business starts with an idea. They sell new goods or offer new services to fill gaps in markets where there is demand. In other words, their new product fills a need gap yet to be met by the existing product. Does this mean that business ideas are only relevant to new businesses?
The answer is no. Established companies also need business ideas. It may be product or operation related. For now, let’s focus on business ideas for products.
Companies realize business ideas and develop new products for several purposes. Hence, this is another reason why business ideas matter. First, they depend on new products to make more money. Second, new products fill market gaps before they are served by competitors or new companies, which has the potential to weaken their market position. Thus, business ideas are essential to maintain competitiveness.
Third, new products exist to continuously satisfy customer needs and want. Customer tastes and preferences are dynamic. And companies must adapt to these changes. Launching a new product is one way. In other words, new products are important to maintain their loyalty to the company.
In a broader aspect, business ideas are crucial for continuously adapting to changes in the business environment. It’s not just about changes in consumer tastes and preferences. But it can also cover other aspects, such as changes in technology. For example, mobile phone companies are constantly adapting their products to changes in mobile technology generations, from 3G to now 5G. The inability to adjust to these changes can lead the company to failure.
How to develop a business idea?
Business ideas can come from two sources:
- Original idea
- Adaptation
Both are ways for us to generate business ideas. We need them when starting a business. And once we have operated a business, we need a business idea to remain competitive and successfully adapt to changes in the business environment. For example, we need to develop new ideas, products, and services to keep up with changes in consumer tastes.
Original idea
Coming up with original ideas is a challenge. Entrepreneurs must be creative in seeing what consumers want. They may have to think outside the box and think outside their business routine.
Where do entrepreneurs find business ideas? They may discover it while pursuing their hobby. Or, they find it out when others share experiences or problems with them. Attending shows and conferences may also be their source.
An original idea can be an invention. Or it is an innovation.
Invention means creating something completely new. The previous product does not exist. And entrepreneurs find it to fill gaps in the market. For example, the printing press, electric light, automobiles, computers, and airplanes are among the greatest inventions in the last 1000 years. Meanwhile, NVIDIA Omniverse, OrCam Read, MTA Live Subway Map, Everist Waterless Haircare Concentrates, and Paper Shoot Camera are among the best inventions in 2021.
Innovation means commercializing something new or changing an existing method, process, or product and making it better. Commercializing a successful invention is also considered an innovation. Likewise, adapting a product to improve its features over time is also an innovation. Electric vehicles are an example of innovation. Quantum computing, autonomous driving, artificial intelligence, and virtual reality are other examples. The electric mountain bike by Yeti Cycles is another example of innovation.
Adaptation
Adaptation adjusts existing products to what the market demands. So, once products are adapted, they become suitable for different customers. For example, a restaurant may change its menu to appeal to consumers on a vegan diet. By adapting products, companies try to satisfy consumer demands for the latest trends or changes in their tastes and preferences.
Adaptation is considered less risky than developing an original idea. This is due to adaptation using existing products, so consumers are familiar with them. On the other hand, original ideas for new products often fail due to consumer disapproval or competitors have launched similar products.
There are several ways to adapt the product. First, entrepreneurs introduce products to consumers in different regions. For example, GoJek and Grab imitated the online transportation model in developed countries, Uber and applied it in Indonesia.
Second, the company changed the packaging to suit local tastes. For example, products add a halal label when expanding their marketing to Muslim countries. The label is necessary to encourage consumer acceptance in the destination country. And because of that, adding labels is essential to increase sales to new markets.
Changing branding or logos in other ways. Apple, with its logo, is a great example. The company made changes to its logo to better visualize its value proposition.
Third, changing the product format is another way to adapt. For example, Microsoft Office changed its default design layout from Microsoft Office 1.0 in 1990 to Microsoft Office 2019 to be more up-to-date while adding new features. In addition, retailers are shifting from conventional retail outlets to online to accommodate technological changes and consumer tastes in shopping. Another example is coffee manufacturers adding powdered sugar and milk to their coffee sachets.
Fourth, companies adapt by changing their promotion strategy. For example, they use the local language in their advertisements. Or they use special offers and discount codes when targeting price-conscious consumers. Or they turn to online advertising instead of traditional television or print newspaper ads.
Further reading
- Business Idea: Sources and Criteria for a Good Idea
- What are the characteristics of a good business idea?
- What are sources of business ideas?
- Where Do Entrepreneurs’ Business Ideas Come From?
- Business Idea: Original Idea or Adaptation?