How to Discover Business Opportunities in a Saturated Economy
At the age of 10, I had a seemingly glorious business idea. I envisioned a voice recorder that turns audio automatically into computer text.
Although I was clueless about how to build this product, I had the urge to share this idea with my father. Then the shock — my father confessed to me that an audio-to-text converter already had been invented.
The good news is that I had enough time to process that shock. The bad news is that, even 20 years later, the same phenomenon keeps happening to me:
- I have a business idea
- I google it
- I find out that “my” idea already exists
It’s uncomfortable to talk about, but aspiring entrepreneurs know the dilemma just too well:
Almost every imaginable business idea already exists.
There are more than enough products and services to be productive, smart, fit, beautiful, entertained, and organized — be it books, information products, coaching services, software, podcasts, and blogs.
A Golden Opportunity
I hated the fact that all avenues to entrepreneurship seemed blocked.
But maybe I was looking at it the wrong way?
I immersed myself in market research and analyzed the average Joe’s pain points. To my astonishment, I realized that today’s oversupply has led to an interesting yet underrated kind of customer problems.
Here are some of them:
- What’s the best mountain bike for me?
- How can I connect my apps?
- How do current cell phones differ in terms of features?
- How to go about contradicting self-help tips?
Today’s customer problems center around information overload, decision fatigue, fear of missing out, and ever-changing technological trends.
I call these kinds of problems building block problems, and their solutions building block solutions. As a little kid, I was obsessed with playing Lego.
If you played Lego yourself, you know that Lego bricks have different shapes, forms, and colors. However, individual Lego bricks are basically worthless as long as they are not plugged together as Lego figures.
Now, for entrepreneurs, Lego bricks represent the different types of existing products, services, or technologies within a market. As with Lego figures, aspiring entrepreneurs can ask themselves how single building blocks can be plugged together to build bigger and better customer solutions.
How Smart Companies Invent the Future
Building block solutions do already exist. And they’re getting more and more important in a world full of overabundance and information overload.
Here are three successful companies who take advantage of building block problems:
Problem 1: Too many images on the web
Existing solution: Pinterest is an online sharing platform for images. It solves the problem of visual content curation by enabling users to group images into visual boards. This provides an easy way to save, share, and discover images around the web in one single place. Users can share anything on Pinterest: recipes, fashion styles, inspirational quotes, or blog articles. Besides that, Pinterest is a great tool for online marketing.
Problem 2: I can’t connect my web apps
Existing solution: Zapier is a software platform that connects web apps to automate daily tasks. One simple automation could be 1) if I get an email 2) upload the attachment to Dropbox, and 3) inform me about this on Slack. The cool thing about Zapier is that users can build their own automation tasks without having programming skills. To get inspired, have a look at these great examples.
Problem 3: Finding the right website builder
Existing >solution: SitebuilderReport is a site that is helping customers to find the right website builder. Every builder is presented with all its features, strengths, weaknesses, and target group. The business idea may sound trivial but solves the painful problem of choosing between dozens of website builders. SitebuilderReport makes money from affiliate commissions.
Let’s Get Nerdy
Building block solutions acknowledge the fact that customers already suffer from information overload, oversupply, and complexity. So instead of flooding markets with new products and services, these kinds of ideas take on a different perspective:
How to connect existing things?
As a software engineer, I’m used to thinking in patterns and abstractions. In the same way, I have found 5 connection patterns that explain the anatomy of successful building block ideas:
Connection Pattern 1 — Process
Putting building blocks in a chronological or logical order.
Successful examples: Zapier, Zenefits, IFTTT
Connection Pattern 2 — Platform
Integrating different building blocks on one platform.
Successful examples: Airbnb, Facebook, GitHub
Connection Pattern 3 — Curation
Reducing information overload by categorizing and restructuring.
Successful examples: Quora, Medium, Reddit
Connection Pattern 4 — Comparison
Comparing and analyzing building blocks based on their features.
Successful examples: MoneySavingExpert, Amazon, Hostingfacts
Connection Pattern 5 — Search
Finding the right building block according to the customers’ needs and goals.
Successful examples: Google, Elasticsearch, Capterra
Playing Business Lego
How to discover building block ideas?
It’s quite easy: take a look at current products and services, see them as building blocks, and ask yourself:
How can I combine these building blocks to build new solutions?
For that purpose, I created a 3-step method:
1) Select a Market
Pick your target market first.
This will be the environment within which you will apply the building block method. For demonstration purposes, I’ll choose WordPress as a market.
2) Identify Building Blocks
Then, you need to analyze your chosen market to find its building blocks.
So what are the building blocks of the WordPress market?
With the help of Google, Fiverr, and Quora, my search efforts led to these results:
- Themes: Astra, Ocean WP, Avada, Hestia
- Plugins: Jetpack, Askimet, Yoast SEO, Total Cache
- Information provider: wpbeginner.com, chrislema.com, wparena.com
- CRMs: MailChimp, Salesforce, AWeber, ConvertKit
- Hosting provider: Bluehost, Siteground, WPEngine, Dreamhost
- Consulting gigs: customization, migration, sales funnel, malware removal, Google analytics
- Niches: E-Commerce, Communities, Landing Pages, Restaurants, Startups
3) Apply Connection Pattern
Now we’re ready to come up with building block solutions.
a) Pick (at least) two random building blocks (i.e. Astra, Ocean WP, Jetpack) or building block types (i.e. Themes, Plugins).
b) For every two blocks or types, apply one or several connection-patterns.
Example 1: Apply the search pattern on Consulting gigs & Restaurants
One solution could be a search engine that lists WordPress consulting gigs for restaurants. Services could include theme design, sales funnels optimization, or Google Analytics installation — all tailored to the needs of restaurants.
Example 2: Apply the comparison pattern on Bluehost, Siteground & WP-Engine
In this case, I think of an information product that compares WordPress hosting-providers in regard to performance, reliability, and customer support. We also could try to niche this down. So what about comparing WordPress hosting providers for fast-growing startups?
Example 3: Apply the process pattern on Plugins & CRMs
A possible solution does already exist: the successful WordPress plugin WP Fusion, which integrates dozens of WordPress plugins with leading CRMs and marketing automation platforms.
Obviously, my examples are raw and need refinement. One way to do this is the application of validation techniques. For example, I could improve my ideas by using the Meatgrinder concept of Tyler Tringas. It’s a practical way to eliminate bad business ideas in a matter of minutes.
The potential for building block solutions is endless. Because the more time passes, the more stuff gets created.
Another crucial advantage of building block ideas is the fact they are based on existing products and services that have already been proven by markets. Therefore, you decrease the chance of building a useless product. If somebody uses product 1 as well as product 2, there’s a huge chance (s)he also needs the integration of these two products.
There’s no need to anticipate new products and services. >The foundation for great business ideas already exists.
Don’t be a pioneer. Be boring instead. Apply the building block method, use connection patterns, and connect existing things.
Which one of the 5 entrepreneur types are you? My free 2-minute quiz will give you the answer.