How to Develop a Business Idea: Crash Course Business - Entrepreneurship #2

CrashCourse
21 Aug 201912:21
EducationalLearning
32 Likes 10 Comments

TLDRThe video explains that entrepreneurial ideas originate from passions, complaints, and egos. It emphasizes using customer feedback to refine ideas and avoid blind spots before launching a business. The script outlines steps like identifying the problem an idea solves, gathering input by networking with relevant communities, and structuring ideas using tools like the Business Model Canvas. It analyzes Netflix's business model as an example, breaking down their value proposition, customer relationships, cost structure, and other key components.

Takeaways
  • 📝 Entrepreneurs are not a special group of people but individuals who believe in their ideas enough to take a financial risk.
  • 💡 Innovative ideas often stem from passions, complaints, or the desire to do something better (ego).
  • 💻 Sharing your idea is crucial for its development and to avoid inheriting your own blind spots and biases.
  • 📍 Engaging with potential customers and listening to their feedback can significantly refine and improve your idea.
  • 💼 A business model, like the Business Model Canvas, is essential for visualizing and planning the fundamental aspects of your business.
  • 💸 Understanding your target market, customer relationships, and channels of communication is key to reaching your audience effectively.
  • 💾 Netflix is used as an example to illustrate how to apply the Business Model Canvas to a real-world scenario.
  • 💰 Revenue streams and cost structures are critical components of your business model, determining financial viability.
  • 🔔 Openness to feedback and adaptability are fundamental for entrepreneurs to refine their ideas and business models.
  • 📲 Utilizing resources, partnerships, and modern tools can greatly enhance the execution and success of your business idea.
Q & A

  • What are the three main sources of innovative ideas according to the script?

    -The three main sources of innovative ideas mentioned in the script are our passions, our complaints, and our egos.

  • How did the idea for Under Armour start?

    -The idea for Under Armour started because the founder got tired of their shirt getting so sweaty they had to change it multiple times during one workout.

  • What should you do after coming up with an initial idea?

    -After coming up with an initial idea, you should understand the problem at the root of your idea by getting insight from potential customers and people who can help think through your idea.

  • Why is it important to share your ideas with others?

    -Sharing ideas with others, especially potential customers, allows you to get feedback to improve your idea, uncover blindspots, and ensure your solution actually solves a problem for people.

  • What are some resources entrepreneurs can use for help in developing their ideas?

    -Some resources entrepreneurs can use for help include Small Business Development Centers, entrepreneurial networking groups, co-working spaces with entrepreneurial consulting, and college professors.

  • What are the two main types of people entrepreneurs should target when initially sharing their ideas?

    -The two main types of people entrepreneurs should target are potential customers who have the problem they are trying to solve and people who can help think through the idea.

  • What are some of the key components of the Business Model Canvas?

    -Some key components of the Business Model Canvas include the value proposition, customer segments, customer relationships, channels, key activities, key resources, key partners, revenue streams, and costs.

  • What subscriptions plans does Netflix offer?

    -As of 2019, Netflix offered three membership subscription plans: Basic ($7.99/month), Standard ($10.99/month), and Premium ($13.99/month).

  • What are some examples of costs for a company like Netflix?

    -Some examples of costs for Netflix include employees, licensing and production fees for content, servers for data storage, brick and mortar workplace locations, DVD production and mail, and research & development.

  • What is the next topic to be covered regarding entrepreneurship based on the end of the script?

    -The next topic to be covered will be value propositions and how to create something that potential customers find inherently valuable and worth paying for.

Outlines
00:00
😊 Ideas from Passion, Complaints & Ego

Paragraph 1 discusses where innovative ideas come from - our passions, complaints, and egos. It provides examples like monetizing a hobby, identifying an annoyance to fix like tangled headphones, or believing you can offer an existing product/service better.

05:00
😩 Ask People to Improve Your Idea

Paragraph 2 advises entrepreneurs to get feedback on their ideas before launching, using an example of someone opening a gluten-free bakery without consulting customers first. This caused issues down the line that could've been avoided by talking to more people first.

10:03
👥 Share Ideas, But Avoid Overplanning

Paragraph 3 recommends sharing ideas with potential customers and experts to improve them, but not overplanning every detail. It contrasts detailed business plans with lean tools like the Business Model Canvas that force entrepreneurs to think through their model.

Mindmap
Keywords
💡entrepreneurship
Entrepreneurship refers to the process of designing, launching, and running a new business. It often involves identifying a problem or need in the market, developing an innovative solution or product, and taking financial risks to turn the idea into a sustainable business model. The video emphasizes that entrepreneurs are not necessarily gifted with creative ideas, but believe enough in the value of their idea to make it a reality.
💡idea
Ideas are the initial sparks of innovation that can eventually grow into an entrepreneurial business. As discussed in the video, ideas usually originate from people's passions, complaints about existing solutions, or their ego to improve on existing products/services. Strong ideas identify problems that customers care about and provide effective solutions.
💡problem
Understanding the root problem an idea aims to solve is crucial for developing an effective, impactful business. Entrepreneurs need to deeply understand their target customers' problems through research and feedback. This enables refining the initial idea to better meet customer needs.
💡customer
Customers refer to the target audience or user base for an entrepreneur's product or service. The video stresses the importance of sharing ideas early with potential customers to get feedback, avoid blindspots, and create more customer-focused solutions before launching a business.
💡business model
A business model refers to the core components of how a company delivers value to customers and generates sustainable revenue. As illustrated through the Business Model Canvas framework, this covers the product/service, customer segments, channels, revenue streams, key activities, resources, partnerships and costs.
💡feedback
Feedback involves getting input from a diversity of people, especially target customers and experts, to improve an initial idea. Quality feedback helps entrepreneurs modify their assumptions, fill knowledge gaps, and optimize the product-market fit before investing significant time and money.
💡launch
The launch marks the public introduction of an entrepreneur's new business after a period of early development and testing. As the video cautions through its example, launching too soon without sufficient planning and incorporation of stakeholder feedback risks creating solutions that miss the mark for customers.
💡risk
Risk acceptance lies at the heart of entrepreneurship. Since new ideas and ventures have uncertain outcomes, entrepreneurs take on financial, personal or professional risks - like leaving a secure job - based on their belief in an idea and its ability to fill a market need.
💡value
Value represents the core benefit a business's product/service provides to customers - the reason why users would invest money or time in that solution. As the video hints for its next installment, entrepreneurs need a clear value proposition that convinces potential customers of the inherent value of their offerings.
💡sustainable
A sustainable business is one that develops a financially viable, repeatable business model to keep operating into the long-term. The video suggests entrepreneurs take risks to transform ideas into sustainable businesses that can grow rather than short-term projects.
Highlights

Entrepreneurs aren’t a special group of people gifted with all the good ideas. They believe in themselves and the value of their idea enough to take a financial risk to make it a reality.

Looking back at the people we now think of as great entrepreneurs, these people were just looking to make life easier or better in some way -- from inventing the wheel to dreaming up the dishwasher.

Innovative ideas can be traced to three main sources: our passions, our complaints, and our egos.

Sometimes you start doing something as a hobby, like art. But then you might get commission requests from people you don’t even know. So, if you take a risk, that hobby could become a full-time job.

If you’ve ever found yourself thinking, "Wow, I really wish someone would do something about that," guess what? You can do something about it!

Our egos are a great place to find innovation and motivation. Maybe you visit the same coffee shop every morning and after the thousandth cup of hot sludge, you are so done. You could make a much better cup of coffee!

Even after you understand the problem, there’s more talking to do. Let’s look at my latest big idea. It’s great, right? But now that I’ve told you, I’m going to have to kill you! Sorry, I got a little dramatic there.

When we keep things to ourselves, we end up thinking shoe umbrellas are the next big thing. We have to share our ideas with the people who are actually going to use the product or service. Otherwise, our solutions inherit our blind spots and biases.

If Mary had been willing to share her menu, she could have optimized her cream puff ideas for potential customers before launching. And she could’ve stirred up even more hype and brand recognition for Dream Puffs on her opening day.

It depends on the idea, but generally at this early stage, we want to target two main types of people. First, customers who might have the problem we’re trying to solve. And second, people who can help us think through our idea.

Don’t be afraid to reach out and ask for help!

Filling out a business plan or Business Model Canvas lets you collect all your thoughts about your idea and visualize how your business might exist.

Netflix relies on SO MANY resources to keep their massive wheels turning. They have people making content including their in-house studios, engineers to make sure their website and apps work, customer service to troubleshoot, attorneys to deal with licensing, internal teams for promotion, and a global network of data storage facilities -- to name a few.

This is exactly the goal of the Business Model Canvas: to provide a framework for anyone to break down the pieces of a business -- especially your future business!

So remember that everyone has ideas, and the real work of an entrepreneur is in sharing them and getting lots of feedback!

Transcripts

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