4 ms·

"Ideas" and "market opportunities" sort of go hand in hand, don't you think? The market opportunity is assumed when someone talks about an idea for a business.

Robin_Message 14y ago
Yes, and validating the assumption of a market opportunity is called finding product-market fit. Failing to do so is a leading cause of death among startups. An actual market opportunity, not an assumed one, is certainly valuable - which is why a VC will invest in it where they wouldn't invest in just an idea.
deleted 14y ago
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robomartin 14y ago
> "Ideas" and "market opportunities" sort of go hand in hand Only when the idea precedes the exploration of the opportunity space. Have an idea -> Build a prototype -> Show it around -> Close some sales. Here the idea is related to the market opportunity. It triggered a search for the opportunity when someone was interested or puzzled enough to do the work. Few will invest in an idea unless there's some kind of "sugar on top" that reveals really good potential for a market opportunity. Many will invest in a reasonably tested market opportunity. When are an idea and a market opportunity not connected? When the idea does not precede the market opportunity. I'll give you a couple of concrete examples from my own life. A friend of mine came over one day many years ago and said that his contact at one of the local film studios told him that they were looking for a carpenter that would make them 100 sets of this specially designed piece of furniture for an expansion project. My friend knew that I, when not coding or designing products, liked to, among other things, do woodworking projects. I also had a pretty niche setup in my garage at the time. So, here's an opportunity presented to me which had not originated with an idea. What did we do? We spent that weekend making an unsolicited sample of the piece the studio needed. He delivered it on Monday to his contact along with pricing. By Wednesday we got the deal. By Saturday I had a pile of furniture-grade plywood in front of my house that was eight feet tall. We setup an assembly line and spent a week (with some help) cranking out the pieces. My neighbors were puzzled and probably somewhat concerned. A couple of them came over to help for a few bucks. Delivered on time and walked away with $60K profit. Sweet. Any able carpenter would have taken that opportunity and run with it. We just ran faster and put a solution in front of the customer as painlessly and well-executed as possible. Another time I had someone call me to tell me that there was a company in need of a box built to translate a communications protocol in real time. RS422 in and out. Status display. Power button. The conversations went something like this: Me: "How many?" Him: "Probably 25 per month" Me: "How much are they willing to pay?" Him: "They've been trying for months but it's a bunch of Optics PhD's and this isn't their thing. They are desperate for a solution". Me: "Why?" Him: "They have sold a bunch of these units at about $500K a piece and this has been one of the only reasons they can't deliver." Me: "I can meet with them tomorrow AM" End result: I sold them a protocol converter box for $3,000 a pop for the first 25 units, $2,000 each for the next 75 and $1,000 each thereafter in lots of 100 units. I built it in a weekend: 1 RU enclosure. Off the shelf 8051 board. Small custom board with RS422 drivers and receivers. LCD display. Power supply. Connectors. I don't think the total cost exceeded $150. It would have been a sweet ride except that about six months later they got acquired by a large multinational and, effectively, shut down. Again, a market opportunity that did not come from an idea. Now, what if I said? "Let's build an RS422 protocol converter box and sell it for $3,000". And I did this in complete isolation of having identified a market need? Well, it'd be a flop. Sometimes fining opportunities is like finding a needle in a haystack. Someone almost has to sit on it for you to become aware it even exists.
- aortega 14y ago
  I'm a "optics" (actually photonics-crypto) PHD candidate that also can build a RS422 protocol converter. You had luck I wasn't in their team :)
  - robomartin 14y ago
    I actually tried to convince them that this stuff was very simple and that they could do it. No interest whatsoever. I think what was going on behind the scenes is that they were in talks to be acquired (or planning to be in talks) and they really wanted their product to work. They probably also had a number of challenges of their own to deal with. In that context, it may have made sense to pay whatever was necessary to get going.

Robin_Message 14y ago

Yes, and validating the assumption of a market opportunity is called finding product-market fit. Failing to do so is a leading cause of death among startups. An actual market opportunity, not an assumed one, is certainly valuable - which is why a VC will invest in it where they wouldn't invest in just an idea.

deleted 14y ago

[deleted]

robomartin 14y ago

> "Ideas" and "market opportunities" sort of go hand in hand Only when the idea precedes the exploration of the opportunity space. Have an idea -> Build a prototype -> Show it around -> Close some sales. Here the idea is related to the market opportunity. It triggered a search for the opportunity when someone was interested or puzzled enough to do the work. Few will invest in an idea unless there's some kind of "sugar on top" that reveals really good potential for a market opportunity. Many will invest in a reasonably tested market opportunity. When are an idea and a market opportunity not connected? When the idea does not precede the market opportunity. I'll give you a couple of concrete examples from my own life. A friend of mine came over one day many years ago and said that his contact at one of the local film studios told him that they were looking for a carpenter that would make them 100 sets of this specially designed piece of furniture for an expansion project. My friend knew that I, when not coding or designing products, liked to, among other things, do woodworking projects. I also had a pretty niche setup in my garage at the time. So, here's an opportunity presented to me which had not originated with an idea. What did we do? We spent that weekend making an unsolicited sample of the piece the studio needed. He delivered it on Monday to his contact along with pricing. By Wednesday we got the deal. By Saturday I had a pile of furniture-grade plywood in front of my house that was eight feet tall. We setup an assembly line and spent a week (with some help) cranking out the pieces. My neighbors were puzzled and probably somewhat concerned. A couple of them came over to help for a few bucks. Delivered on time and walked away with $60K profit. Sweet. Any able carpenter would have taken that opportunity and run with it. We just ran faster and put a solution in front of the customer as painlessly and well-executed as possible. Another time I had someone call me to tell me that there was a company in need of a box built to translate a communications protocol in real time. RS422 in and out. Status display. Power button. The conversations went something like this: Me: "How many?" Him: "Probably 25 per month" Me: "How much are they willing to pay?" Him: "They've been trying for months but it's a bunch of Optics PhD's and this isn't their thing. They are desperate for a solution". Me: "Why?" Him: "They have sold a bunch of these units at about $500K a piece and this has been one of the only reasons they can't deliver." Me: "I can meet with them tomorrow AM" End result: I sold them a protocol converter box for $3,000 a pop for the first 25 units, $2,000 each for the next 75 and $1,000 each thereafter in lots of 100 units. I built it in a weekend: 1 RU enclosure. Off the shelf 8051 board. Small custom board with RS422 drivers and receivers. LCD display. Power supply. Connectors. I don't think the total cost exceeded $150. It would have been a sweet ride except that about six months later they got acquired by a large multinational and, effectively, shut down. Again, a market opportunity that did not come from an idea. Now, what if I said? "Let's build an RS422 protocol converter box and sell it for $3,000". And I did this in complete isolation of having identified a market need? Well, it'd be a flop. Sometimes fining opportunities is like finding a needle in a haystack. Someone almost has to sit on it for you to become aware it even exists.

aortega 14y ago
I'm a "optics" (actually photonics-crypto) PHD candidate that also can build a RS422 protocol converter. You had luck I wasn't in their team :)
- robomartin 14y ago
  I actually tried to convince them that this stuff was very simple and that they could do it. No interest whatsoever. I think what was going on behind the scenes is that they were in talks to be acquired (or planning to be in talks) and they really wanted their product to work. They probably also had a number of challenges of their own to deal with. In that context, it may have made sense to pay whatever was necessary to get going.