There is a secret sauce behind most great ideas. It’s what enables that seemingly elusive spark, creative imagination or strategic mind that seems to find the next big idea and successfully commercialize it.
We’ve written in the past about the importance of clearly understanding customer or client needs in order to feed innovation. Great entrepreneurial thinkers and do-ers continuously collect these insights, and then “magically” create unique, breakthrough solutions.
When we unpack great business ideas, we almost always find that they are constructed using learnings from and building blocks of analogs: existing business models where a similar challenge was solved.
Bonobos launched guideshops, constructed with building blocks from sports bars and “showrooms,” solving for places where guys want to hang out; and places where customers can try a product out, but don’t purchase on the spot and inventory is controlled.
Netflix learned from Amazon (Ecommerce) and Dell (eliminate the middle man) to re-imagine how we consume media.
ZipCar built on business and cultural models for borrowing and sharing to create an alternative to car rental and ownership.
Demystifying the magic behind these great ideas boils down to a 3 step process:
1. Clarify the business challenge.
2. Search for analogs. Explore the business model behind them.
3. Smartly reapply.
If your core business challenge is to revive a commodity, you might start by looking at Starbucks.
If you need to bridge non-profit and for profit, or build a cause into your brand, the Tom’s model is worth exploring.
If you want to drive usage occasions for a premium, special occasion item, check into what DeBeer’s did for Diamonds.
Want to create a loyal tribe of brand lovers? You may not find a more complete business model than Harley Davidson.
Trying to change a historical paradigm? Check out what Nike did in China.
Any of these analogs can be far more valuable than just the inspiration that they provide. Consider key elements of the business models behind each of these success stories. What was the product mix? Who were the key partners? How tight or widely defined is the target customer or client? What is the marketing approach? How do they think about supply chain? Pricing? How about the internal organizational structure that they use to enable their model to work?
