High failure rate in start-ups can be avoided by doing lots of research before you get money, before you get people, develop products.
It is better that you evaluate the ideas before you launch yourself rather than to waste time and money discovering you have made a mistake some way down the line.
What is an idea:
Occurs any time
To anybody
Randomly
Seldom materialise
What is an opportunity:
Environmental factors merge
The right conditions
The right place, the right time
An idea is not the same as an opportunity
How feasible
Plan
Why is it great?
Ideas need to be right time at right place We explored the many inventions and ideas of Leonardo De Vinci but they had no commercial application.
So, how do you find out find the environment is receptive to your idea or not? Here is a test list you can use to find out if your target audience may be receptive to your idea or not.
You can apply these questions to your own project work. For instance, if you are creating a site specific installation piece, you might consider what environmental factors you should accommodate in order to get an appropriate response from your audience.
•What site specific political issues should you be aware of?
•What are the local economic conditions you want to respond to or reveal?
•What cultural aspects of society in that place are you picking up on?
•What are the economic factors that will make this project possible?
•If you cannot answer these questions then you are not aware enough.
Example Concord worked when launched in 1969 as people across the Atlantic from each other did not have the communication networks available today. Business people could travel between Europe and New York in 3 hours rather than 7 hours.
Technology progressed and the first fibre-optic cable was laid across the Atlantic in 1988 which increased call capacity by 1000%. Jumbo jets increased capacity for transatlantic flight which increase trade and reduced travel costs. All of these things were successful because of political and social conditions.
Political and Social conditions that create the right conditions for new products and services to succeed. New technologies such as supersonic engines, wide bodied aircraft and fibre-optic cables. There is a fourth factor which affects the ability for products and services to succeed and this is Economic conditions.
Economies were growing. More people were making more trade between more countries and their need to travel more often was making travel cheaper. That’s what we call economies of scale.
These examples have flourished in the wealthy, stable economic conditions of western economies. But, how would you respond if you were creating products and services in a developing economy where there is very little financial support from government and little spare cash for people to help themselves?
Being able to pick up on these signals in a marketing environment are key qualities of Entrepreneurship. The common tool is a PEST analysis.
Look at current : -
1.Political Changes ( from local issues to national and international issues)
2.Economic changes (unemployment, Big new employment opportunities create new wealth, Currency exchange rates)
3.Social Changes ( trends, behaviour patterns, TV reflects popular trends)
4.Technology changes ( what has just changed, what are the latest opportunities on eth internet or on mobile applications)
5.Forget last year’s trends and last decade’s technology – Everyone else has already been there.
P Politics - Local, national, international
E Economics - Trade laws, tax breaks
S Social - Are you aware of what just happens to you?
T Technology - Publications, Wired, The Guardian, Economics
To spot an opportunity read a broadsheet at least once a week as some media can be condensed and biased.
PEST analysis plus Environmental = PESTLE
What kind of creative are you?
< Evolutionary ------------------ Revolutionary >
< Manager ------------------ Opportunist >
< Cautious ------------------ Risk taker >
A Creative Entrepreneur
You may ask what an entrepreneur is. You may think that entrepreneurial behaviour or attitudes do not apply to your practice. Let’s have a look at some comparisons to help define it rather than take in isolation.
It may be better to define the difference between Entrepreneurial and other activities rather than to define Entrepreneurship itself
Where would you place yourself on each of these sliding scales. Where you place yourself will help you to understand what kind of creative you are, how you innovate and what kind of entrepreneur you will be.
The revolutionary will plough through everything and everyone to make change
The evolutionary is someone who adapts current situations, products and designs to gradually make changes that will carry people along with you.
The manager looks after existing situations and makes them more effective and efficient.
The Opportunist will seek new opportunities and hopes someone else will help them make it work
A cautious creative will give the market what it wants
The risk taker will give the market something it didn’t realise it needed yet!
There are roughly three types of entrepreneur.
1.The owner worker - Ltd by capacity
1.Pros. – you practice your own art in a solitary manner and are totally in control of every aspect of your work
2.Cons:- It is easy to fall into the ‘creative labourer’ trap. Your income will be limited by time, health and interruptions.
2. Owner manager
1.Pros:- your role is more diverse and you meet more people. You can develop talent in others and they enable you to generate more income. It is easier to control quality at arms length.
2.You have less time to do your own creative work. You have to think for others. You become a manger of people.
3.Owner Entrepreneur
1.You direct the creative work of others and orchestrate a number of different income streams so if one income stream fails, there are still others to keep you afloat. You can take more holidays and relax doing your own creative work.
2.Sometimes the opportunities you identify do not bring any income. Sometimes risks lead to disasters.
Example Damian Hurst - An orchestrator
Example Antony Gormley - Halifax Foundry makes his designs, Concept creators and Project coordinators
Where do opportunities come from?
Trends
•Technical developments
•Political change
•Economic boom and slump
•Human need
•Problems
•Research
Examples
Sony Walkman
was developed as an experiment in which some new technologies were put together to with existing technologies to create a brand new product. This is known as Technology PUSH. The market had no idea it needed this fun product but it was hugely popular and made a massive impact on social behaviour
Nike After the University of Oregon resurfaced the track at Hayward Field, Bowerman began experimenting with different potential outsoles that would grip the new urethane track more effectively. His efforts were rewarded one Sunday morning when he poured liquid urethane into his wife's waffle iron. Bowerman developed and refined the so-called 'waffle' sole which would evolve into the now-iconic Waffle Trainer in 1974.
This is also a Technology PUSH
Innocent Smoothie In fact, being accountable to our customers is something that is in our blood. In the summer of 1998 when we had developed our first smoothie recipes but were still nervous about giving up our proper jobs, we bought £500 worth of fruit, turned it into smoothies and sold them from a stall at a little music festival in London. We put up a big sign saying 'Do you think we should give up our jobs to make these smoothies?' and put out a bin saying 'YES' and a bin saying 'NO' and asked people to put the empty bottle in the right bin. At the end of the weekend the 'YES' bin was full so we went in the next day and resigned.
This is a Market PULL
Post it®It is a tale of two scientists/inventors, one who created glue that didn’t stick very well and the other had trouble with a bookmark that didn’t quite do its job.
Together with a band of determined scientists and marketers they created a product that redefined informal communication — the Post-it Note.
Once more, this is a Technology PUSH.
Technology PUSH means that new products that have emerged through the development of new technology are presented to the market without necessarily knowing how successful they may be
Market PULL means that products are developed in respnse to market demand for change
Where does the creative fit in?
•Project management
•Know how to find the right people
•Know where to source stuff
•Can work with a team
•Gets along with all kinds of people
•Optimistic
•Communicates well
We are great at these things AND we have been taught how to generate ideas and solutions to problems. The clever thing to do is to spot an opportunity where you can do it.
Project Manager skills
What is required by whom and by when
Gain client trust and convince people to invest in your innovations
Lateral thinking, holistic thinking and 3-D visualisations
PEST analysis
Know your suppliers, develop relationships and make them your frineds
Create a system that works for you and that helps you to communicate ideas to others
Be connected, network and know who can help you achieve high quality solutions
Define the quality of work required. Never entrust this decision to others because your reputation is on the line.
Opportunities can simply arise from these aptitudes because you, or others, recognise that you can put things together in a better, more effective, more imaginative and more convincing manner to achieve higher quality results. This is the most common opportunity that is developed. Some people think that entrepreneurs are heroes with massive personalities but actually, they tend to be quiet, hard working people who are sometimes a bit dull. Richard Branson, James Dyson and Sir John Hegarty are perfect examples of this.
So you think you have spotted an opportunity?
Skills
- Technical
- processes
Aptitudes
- Teamworking
- Entrepreneurs do not do it alone
Predisposition
- Risk / caution
- Evolution / revolution
- Manager / opportunist
How do you know if this is a good opportunity or not?
Look at your competitors
How many are there?
How well are they doing
What do they do well?
What could you improve upon?
Will anyone buy it?
This is not down to a matter of chance.
How many customers are there – are there enough.
How many competitors are there.
This known as Supply and Demand.
Where are you customers and who are your competitors.
Can you choose a location that would give you a competitive edge in relation to a target market.
Is anybody else doing this thing differently from you and if so, is their way better or worse than yours?
Assessing competitors
Apply these models to your competitors:
SWOT anaylsis - Strengths, Weaknesses, Opportunities, Threats
The 4 P's -Product, Price, Promotion, Place .
PEST
Assess the quality of the opportunity
For me
For the customer
For the planet
For other stakeholders
How will it affect your personal life, where you live, your family and your work / life balance?
How will you affect the customers’ quality of life or businesses
What beneficial effect can you have on your local, national and global environments?
Who else is affected by your business? For example, if we look at Leeds City Art Galery, who can you say is affected by its activities? These people are all stakeholders.
Stakeholders can be organised in these three brackets.
The internal environment in a business / practice
This may just be you. Or may be 10 people who work together
Your skills
Your resources
Your lifestyle
The Micro environment
- These are the stakeholders who are just on the periphery of your ‘world’
- They are affected by your success or failure
Your network of friends and associates
You competitors
Your supplies
Your local community
Stakeholders
The Macro environment
- These are stakeholders or factors which are beyond your control
- They are not directly affected by your success or failure but by the cumulative effect of many successes and faillures
- You may be significantly affected by these factors beyond your control
World market conditions – currency – populations - cultures
Economics – exchange rates – wealth - debt
Technology – supporting – emerging – alternative
Social Trends – trends – Behaviours – demographics - needs
Politics – legislation – tax – war - population
The Environment – pollution – conservation - sustainability
Conclusion
Understanding this principle and being able to research and evaluate some of the aspect we have looked will mean you are already in a better place than 80% of people who start a business based on an idea and end up failing.
By using these models of marketing basics we can avoid basic business errors.
