Entrepreneur's Handbook
IDEA, OPPORTUNITY, PROBLEM AND NEED CONCEPTS
The idea is the seed that is predicted to grow into a product. Just as the seed does not make sense as long as it does not turn into a vegetable, fruit, or tree, so is the idea. Where will you sow this seed, when will you sow it, how will you grow it, with what money will you get the necessary water and medicines while growing it, to whom will you sell it when it grows up, will you be able to cover your costs and make a profit when you sell it? These questions are just some of the factors that affect the success of your idea. As you can see, an idea that looks great to you can be very unsuccessful or very successful depending on many factors. So it's important to know how your idea can succeed or fail.
It doesn't matter whether your idea has already been thought of or not, although most people say you should have an "original" idea, the important thing is to put it into practice in the right place at the right time and make it long lasting. For example, one of every two initiatives established to sell jewelry over the Internet in our country since 2010 went bankrupt. If you start out with the idea that "women like to wear jewelry, let me sell jewelry online", you are likely to fail. Therefore, you need to do the right analysis. You need to deepen your analysis by asking questions such as: How, in what way, where and how often do women buy jewelry? Do they have trouble finding jewelry or are they satisfied with their lives?
1.2. What is an opportunity?
Opportunity is related to the environment created by environmental and internal factors. In other words, the opportunity is the creation of suitable market conditions, the creation of an environment to make the product, the right time for the people to make the product, and the financial support to make the product. If we go from the example at the idea stage, when you have suitable weather conditions, good soil and excellent water resources, the germination of the seed (idea) is an opportunity. Opportunities can come up with technological developments, market trends, and sometimes laws.
The widespread interest of young people in e-sports in recent years is an opportunity for many initiatives such as trainings, information and sharing websites, social groups, and many entrepreneurs have already taken advantage of this opportunity.
Ten years ago, e-commerce sites used to set up their own warehouses, sell their own products, and the changing market conditions highlighted the platforms where sellers become members and open their own shops which we call marketplaces. This created an opportunity for many small businesses to emerge. Ten years ago, businesses that needed to know many issues such as how to set up a website, how to grow it, how to make digital marketing left their place to entrepreneurs who only focus on the product they sell and who do not need to know the web world.
It is an opportunity for entrepreneurs that solar panels are 100 times cheaper compared to the 1970s. A technology that would hardly cost years ago has become able to pay off in a short time.
Especially the inability of working people to have time for everything made their time more valuable. For this reason, many shopping centers have started to offer valet services. This is about realizing that working people have a time problem and seeing an opportunity.
1.3. What is a Problem?
The trouble a potential customer or customer group experiences is called a problem. For example, the rapid discharge of the smart phones used is a problem for many customers. Different ideas can be put forward to turn this into an opportunity. It may be a solution to invent a different battery technology, or it may be a solution to make a portable battery and charge the phone with this battery as it runs out. That is why many experts say "keep the problem constant and go over the solution options". So if you dedicate yourself to the problem of running out of battery quickly, you will go more easily than to be obsessed with a single solution.
Human beings have thousands of problems to solve. For example, the biggest problems related to the world can be listed as global warming, earthquakes, flood disasters, droughts, storms, hurricanes.
According to NASA's research, sea level will rise by 30 to 120 centimeters by 2100 due to global warming. This means that habitable areas will decrease. Of course, this is just one effect of the global warming problem. Many problems such as melting of glaciers, severe drought, water shortage, forest fires, floods, decrease in agriculture and fisheries, decrease in many plant and animal species, allergies, asthma and infectious disease epidemics, air pollution are among the problems caused by global warming. Earthquakes are also among the biggest problems of our world. It is estimated that around 222 thousand people died in the earthquake in Haiti in 2010. The number of people who have died since 2010 due to flood disasters is over 28 thousand. The cost of the drought in America in 2012 cost the USA 20 billion dollars. In 2011, 553 people died due to tornadoes and storms alone.
There is still no solution for many diseases related to human health, especially many diseases such as cancer, AIDS, asthma, diabetes, polio and Ebola. In 2016, 15.2 million people died worldwide due to an ischemic heart disease or attack. In Turkey, 65 thousand people died due to ischemic heart disease, and around 81 thousand people died due to benign or malignant tumors in 2017. Chronic diseases such as diabetes are also a problem for the country's economy. In 2012, the cost of type 1 and type 2 diabetes to SSI is around 10 billion TL. Considering that the number of diabetes patients increases every year, it is certain that this cost will be more burden on the state.
According to the research conducted by the World Health Organization, 2 billion people in the world still use a drinking water source contaminated with feces. According to data from 2015, 423 million people use untreated surface water from unprotected wells and waters, and 159 million from lakes, ponds, rivers and streams as drinking water. It is estimated that 842,000 people die each year from diarrhea as a result of the consumption of unsafe drinking water.
According to the data of the International Labor Organization, the number of unemployed people in the world in 2017 was around 190 million, and in Turkey the number of unemployed people in the same year was approximately 3.5 million people. The number of people whose General Health Insurance (GSS) premiums were paid by the state was around 9 million in 2015. In other words, approximately 9 million people stated that the income per capita in the family was less than 1/3 of the gross minimum wage and received this support. In America, the number of people who are not financially well-received and who receive "Supplemental Nutrition Aid Program (SNAP) / Food Stamp" is around 40 million as of August 2018. In other words, 40 million Americans who ask for support from the state saying "I have no money to eat" try to survive without hunger every day.
As you can see, there are tens of thousands of problems around us that need to be solved. Getting used to problems, not realizing that there is a problem, is the biggest enemy of innovation. Examining the environment, questioning and being a solution generator is the first step of innovation. You will find that there are many areas where money can be made when you are a solution maker and chase opportunities when you discover the problems around you, the customer. Many products that will reduce dependency abroad have emerged in times of economic crisis. For this reason, it is the main duty of the entrepreneur to observe the environment even in the economic crisis, to examine which products cannot be bought due to cost, and to investigate whether those products can be produced here.
1.3.1. Ventures and Problems They Solved
1.3.1.1. Mailchimp
Two entrepreneurs, Ben Chestnut and Dan Kurzius, were running a design agency in the early 2000s, and many of their customers wanted email design. Email design, which I and Dan didn't like the most, was their biggest problem, but customer requests were endless. To solve this problem, they edited an old software (a failed digital greeting card product) they had written for a previous project and created Mailchimp. This code became the turning point for MailChimp email marketing service. In fact, until 2007 they saw Mailchimp as a side job. But in 2007, they shut down their design agency and focused entirely on this business, becoming one of the largest email delivery services in the world, currently with over $ 400 million in revenue.
1.3.1.2. Shopify
Tobias Lütke was looking for an e-commerce site to sell snowboards. But he couldn't find a practical way to market his products online. Despite his professional involvement in software, Lütke realized how problematic it was to deal with e-commerce platforms with limited design options, strict rules, and no easy interaction with other infrastructures. Lütke and his friend Scott Lake decided to help others sell their products online as well. Lütke and Lake, who received $ 200,000 from friends and family and $ 250,000 from an angel investor, officially launched the customizable online store maker in 2006 and named it "Shopify". Shopify, which set out to solve their own problems and then establish a platform that will solve the problems of thousands of people, turned into a business that earned $ 580 million in 2017.
1.3.1.3. WeWork
Adam Neumann was an entrepreneur born in Israel and moved to America in 2001. Neumann, an initiative on baby clothing, together with architect Miguel McKelvey, who works for another firm in the same building, realized that there was too much space in the building, which was a big problem for the homeowner. They talked and persuaded the landlord many times, and in 2008 they founded the Green Desk initiative, where many people can work in the same environment. In this way, both those who came to find a working area for less money and the unused and non-rented space in the building was rented. Of course, they completely sold this venture to the landlord a few years later and earned some money. Afterwards, they saw that this model, which actually solved the problems of both sides, could solve the problems of thousands of people with the focus of human and community, and today's WeWork emerged. They have reached 21 billion company value with more than 250 thousand members in more than 18 countries.
1.3.1.4. Dropbox
An entrepreneur named Drew Houston, on the bus from Boston to New York, realized that he had forgotten his USB drive at home, which contained the files he needed. He was very angry with himself for forgetting the USB drive at home and did not want to have this problem again. So he started writing code to solve this problem and built a website that allows people to store their files online and share them with others. Later, he was accepted into the Y Combinator acceleration program and met his first investors there. Today it has grown into a company with over a billion dollars in revenue.
1.3.1.5. Malwarebytes
When Marcin Kleczynski was 14 years old, the computer he was using at home was infected with a virus and he could not destroy the virus with any antivirus program he used. Later, on a forum site he entered, there were people who helped him out how to destroy that virus one by one. He then told these people that he wanted to start a business without telling them that he was 14 years old and offered some jobs. The company has generated over $ 100 million in revenue last year.
1.3.1.6. Facebook
Mark Zuckerberg had built a site called Coursematch to see who else was taking the classes he took while in college. He then built another site for entertainment called “Facemash” that tested the attractiveness of those around him. He realized how difficult it was to learn what others were doing and what others thought on both sites online, and the seeds of Facebook today emerged by solving these problems. The site, which was used only in universities at first, was opened all over the world after all people realized that they had such problems.
1.3.1.7. Google
Larry Page was looking for a topic for his doctoral dissertation and was thinking of an all-page graphic structure on the Internet. In fact, his aim was not to make the best search engine in the Internet world. It was easy to connect to another web page by following the links on one web page, but he noticed a problem. He could not find which other pages linked to a web page.
Scholars build their articles on the basis of a carefully constructed citation. In each article they come to a conclusion by showing previously published articles as points of evidence that advance the author's argument. Articles are evaluated not only according to their original opinion, but also according to the number of articles they cited and the perceived significance of each citation. Quotations are so important that there is even a science in this field, “Bibliometry”.
Larry Page and Sergey Brin teamed up to form an initiative called "BackRub" to bring the logic of the same academic papers to the Internet world, which later became "Google" and took its current form. In fact, the duo started out with a mathematical problem and later used it to measure the credibility and reputation of web pages and found the "PageRank" algorithm, which constitutes Google's largest infrastructure.
1.3.1.8. Joy Mangano
In the movie named “Joy”, which is also shown in our country, it is told that an American woman named Joy Mangano turns the problems she experiences or sees into inventions. In the movie, Joy Mangano realizes that the mats are both difficult to squeeze and do not clean the floors well. Joy Mangano, who goes on this problem, makes a mat (Miracle Mop in America) that can be easily turned and squeezed with one move. He tries to sell it on television channels that sell as shown in the movie. He has many difficulties but then turns into a very successful business person. He then gets obsessed with problem solving and receives more than 100 patents. Another product it has released is the "Non-Slip Hanger" product, which is also brought to life based on the problem. Joy Mangano notices that many of the clothes in her closet are barely sliding on the hangers, even falling down the closet, and realizes that the hangers are not made of non-slip material and the upper part of the hanger is not made at the correct slopes. She uses a non-slip material to solve this and makes the top of the sling at the correct slopes. This hanger becomes one of Joy Mangano's successful products.
1.4. What is a Need?
Need is what a person feels lacking. But trying to meet the need directly means following the wrong path for the entrepreneur. It is alleged that Henry Ford, one of the leaders of the car industry, said "If I asked people what they want, horses that go faster" even before motor vehicles were absent. This discourse actually shows us that people can misidentify their needs. Need is a concept that changes according to time. For example, 10 years ago it seemed like a need for MP3 players to listen to music, but nowadays, music has been listened to with fully digital subscriptions. Here, of course, it is necessary to consider carefully “whether you need to listen to music or play MP3”. MP3 is just a tool and varies according to time, technology and trends, listening to music is the main need, even if its tools change, it will remain as a need. The need and the subject of work to be done will be explained in more detail in the following titles.