At Sussex Innovation, we help to make ideas happen. It’s central to what we do, as a business incubator working with entrepreneurs, start-ups and innovative companies. The phrase “making ideas happen” is even part of our logo. But it doesn’t tell the whole story. Perhaps a better description of our method would be “turning ideas into business opportunities”.
An idea by itself isn’t a business. Ideas are important and valuable things, and anyone with the creative capacity to mine the information they see every day for new ideas has a great advantage when it comes to finding success as an entrepreneur – but the real hard work is in coming to understand the opportunity that your idea creates. Creating a business model is about finding the opportunity to deliver value to your customer.
There are many stories of businesses that started life as one idea, before evolving into a completely different business model as their founders discovered more about how they could leverage what they had. An early form of crowdfunding was pioneered in 2007 by a website called The Point. Once the pledged donations for a particular cause reached a “tipping point”, it would receive funding. While the subsequent rise of crowdfunding sites have proved that this model works, at the time it wasn’t profitable for the site’s developers. They decided to start a side project, using the same principle to unlock discount offers from local retailers and service providers. The resulting site, Groupon, quickly became the main focus of the business as its popularity soared.
Many of our members have ‘pivoted’ in this manner, having discovered a market where their idea was in demand. You can find plenty of examples in the ‘Member Stories’ section of this website. If you notice a problem that is common to several of your customers, and there isn’t a readily available solution, it’s often a good indication that there’s a valuable opportunity out there.
A business model starts with an idea, and an assumption of the value that idea provides to a customer. By challenging that assumption, and taking every opportunity to test whether that value exists, and whether that customer is who you think they are, you begin to learn exactly where the opportunity lies. It might mean taking an existing business model into a new industry, developing an existing product for a new purpose, finding a more efficient way to deliver a service, or even discovering the value created by an entirely new technology.
As the Innovation Support Manager at Sussex Innovation Centre, I spend much of my time working with academics from the University of Sussex to help find commercial applications for their research. Often, academics will come to us with an idea that is quite brilliant, but exceedingly complex and difficult for the layman to wrap their head around
The process of building a business model around such an idea involves thinking laterally around the value that this new research or new technology delivers. Can you simply explain a problem that it solves? If it’s something really revolutionary, it might solve many potential problems. Is there a defined group of people that suffers from one of these problems, and are they prepared to pay someone to make it go away? That’s how you uncover the beginnings of a business model.