A huge established or possible market opportunity OR an insight leading to a small potential niche market. What gets your entrepreneurial juices flowing ?
I don’t fancy myself as great writer, neither have any great insights into entrepreneurship. Been an average Joe middle class employee for past 15 years. So take my rants as self doubts and feel free to put your forceful opinions in the comments and help me learn.
Over last 2 years while working on my venture for making a starch reducing rice cooker and trying to be more entrepreneurial in nature, I have become a huge fan of the ABC show – Shark Tank. I have now watched almost all episodes of past 8 seasons. One of my key takeaways from listening to so many entrepreneurial pitches on the american reality show is: A lot of good business ideas can often be based on some key insights which often come from a small personal need or problem faced. These ideas would often seem to have a very small niche market, often to the degree of not being interesting to the wannaprenuers as they don’t offer huge blue sky market opportunity.
Let’s talk in examples, it gets easier to relate.
- One of my favourites : Gauri Nanda of Indian origin, came up with clocky, an alarm clock that runs, after it sets off. Gauri found it difficult to get up in the morning while studying at MIT. She would put the alarm clock to snooze (like many of us do?) So, she came up with an idea for an alarm clock which jumps off it’s stand and runs around the house, kind of forcing one out of bed. She reportedly did $10 million sales on this simple product – bootstrapping from her dorm. Her ToyMail venture, a toy which kids can use to send voice message to parents was valued by Amazon & Verizone at $10 million at the time of going into shark tank and was valued at 12 million by some of the best Sharks – Chris Sacca & Lori. The small insight? Parent don’t want to give their kids (3-10 age) a screen (phone/tab) due to privacy and security issues but are fine to give a toy with just voice interface to approved contacts only, to keep in touch. Anything revolutionary in tech? I think, NO. Just a simple insight on a very small niche market in both the cases? In both cases, combining some of the very common existing tech to address a market need.
- Drop Stop : A piece of elastic/cotton material, which goes between the seat and centre console in the front of a car. They had sold 1.3 lac sets when they came into shark tank and as per the latest update had sold over $5 mn and were targeting over $15 million sales after their entry into Walmart. The simple insight? One of the founders, while driving, dropped something in that crack between the seat and console and while trying to retrieve it, had his car run over the pavement and could have almost killed someone. He wondered, why doesn’t someone do something about this. This whole venture was value by Lori at 1.5 million for her 20% stake. The product was costing 4$ and selling for 20$ online for each set.
- Squatty Potty : For thousands of years Indians have used squatting toilets. It’s been medically proven to aid elimination & benefit good health. But over a period of time a lot of us (including me) have silently moved to use western toilets for convenience (of course?). These entrepreneurs came up with a stool which one can use along with the western toilet to achieve the squatting position. It costs $4.5 to manufacture and sells for $25. Their sales were 1 million, 2.7 million, expecting 7 million for first 3 years (only online sales & without going to retail) and they valued the company at 7 million in their pitch and were finally offered 3.5 million valuation. what’s the simple insight behind the product ? Now one of us has taken their distributorship for Indian market. so I assume, many of us will soon buy this in India paying a bomb (~25$ for a basic plastic stool). Worst part, i know people (Indian) who already used a make shift stool for the same purpose.
Let me stay with just 3 examples and come to my point (i can go on and on with examples). In each of those cases, it was quite possible for the entrepreneur to waive off his insight and say, who will buy this !! It’s such a small thing & most likely has a very very small niche market. Let me try to look for something which has a much much larger blue sky kind of market opportunity.
In my understanding, often, a much larger market opportunity also translates into (a) everyone & his grand mother already knows about the opportunity and the fact that, many people need that product/service (b) there are multiple players vying for that opportunity (c) most likely, “execution” has become the key rather than “one fine insight” into an unmet customer need (d) a lot of money will be sunk into the venture trying to fight competition rather than making customer wow! (e) the opportunity is no longer for smaller players and needs deep pockets.
Should I give examples of ideas that I have come across, trying to address large markets? Ok, am going to get into “receiving brickbats” zone now. Education, Hyperlocal , e-com (with no strong USP), food delivery, car rental/service etc etc… I am NOT going to elaborate on this point as I lack the credentials to say my heart out on what I feel when I hear about most such startups with multiple player trying to win the markets “for ever” by annihilating their competitors with ads & discounts 🙂 I will leave it out for people with much deeper experiential pockets.
The thing am really trying to do is, searching for some good insights from all of us here. What can we do better to promote an entrepreneurial mindset & eco system which values original problem solving, many of which are noticed because of personal experiences?
Here are 2 businesses borne out of unique insights for Indian markets.
Read here about how Cynthia from Canada solved a problem of our women having to carry water jar/container for miles on their head. I think we will all nod in agreement that we had seen this problem and knew it exists. The solution, WelloWater is nothing rocket science and now our very well known Indian company WimPlast (Cello brand) will sell this product in Indian market.
Or watch the story of Achal Bakeri, Symphony talking about, how a simple insight of, clunky air cooler not looking elegant in his newly constructed house led to his ~1.5B$ market cap company.
I would like to end this un-elegant rant session with these learnings (for me). There are enough original problems around us which are begging for solutions, but often those problems will address very very small niche market segments. We need to trust our instincts and try to solve them. Let me know what are your thoughts on this topic.
I am trying to solve one such problem : Making a starch reducing rice cooker which is beneficial for our health to lower T2 diabetes and cancer risk and automate our Indian traditional method of rice cooking. You could read more about our story here visit our site. Follow us on facebook here and do help to spread the word.
If you ever come across an unique insight into a small problem that you would like to see solved, but have no special skills/time/money to bring it to life, do get in touch with me on twitter. While working on the rice cooker project and another project that is still work in progress I have developed some decent insights into the ecosystem of taking an idea to a tangible product. Good part is, I have done this as moonlighting projects, which means no employee, no office etc etc and I employed only freelancers or other small companies at the least cost possible. I am not looking to support pure software products, as a very healthy ecosystem for that already exists in India. I am looking to put my sweat equity (also cash, if required) into HW or HW+SW kind of product ideas of low to medium complexity, from people who don’t have the skills/time/money to bring those to life. Not looking for the the next space launcher kind of idea 😉