New business ideas are generated through original thinking or by adapting existing concepts, helping entrepreneurs create products and services that meet evolving consumer and market needs.
Original ideas
Original ideas involve creating something entirely new that has not been seen in the market before. These ideas are often based on unique insights, creative thinking, and an ability to spot gaps in existing products or services. They are not influenced or derived from existing products but arise independently.
Characteristics of original ideas
Novelty: These ideas offer something never before available to customers. They may introduce a new product, a new way of delivering a service, or an entirely new business model.
Innovation at the core: They are typically innovative and can disrupt existing markets by offering something entirely different from what consumers are used to.
Problem-solving nature: Many original ideas stem from trying to solve a problem that current products or services fail to address.
Higher risk and reward: Because they are new and untested, original ideas can be risky. However, if successful, they can offer a high return.
Sources of original ideas
Personal experience: Entrepreneurs often come up with ideas based on their own needs or frustrations.
Imagination and creativity: Some individuals can generate ideas purely from their imagination, particularly those with creative or design skills.
Scientific or technological breakthroughs: New discoveries often spark business ideas—for example, advancements in renewable energy leading to solar-powered appliances.
Gaps in the market: Careful analysis can reveal consumer needs that are not currently being met.
Examples of original ideas
Airbnb: Instead of building hotels, Airbnb allowed ordinary people to rent out their homes, completely changing how people find accommodation.
Dyson: Sir James Dyson invented the bagless vacuum cleaner by identifying how existing vacuum cleaners lost suction due to dust-filled bags.
Spotify: Provided legal and easy access to a massive music library through a subscription model, completely reimagining how people consume music.
How entrepreneurs develop original ideas
Entrepreneurs often follow structured methods to help bring original ideas to life:
Brainstorming: Creating a large number of ideas quickly without judging their quality helps uncover unexpected concepts.
Mind mapping: A visual technique to connect different ideas and identify patterns or new possibilities.
Problem-based thinking: Starting with a common problem and working backwards to identify unique solutions.
Blue sky thinking: An open-ended approach that encourages thinking without constraints or limits.
Customer observation: Watching how people use products or interact with services to identify pain points.
Adapting existing ideas
Adaptation is when a business takes an existing idea, product, or service and makes it better or changes it to suit a different market or purpose. It can be a more secure way to innovate because the core idea has already been proven to work.
Why businesses adapt ideas
Lower risk: Since the original idea has already proven to be successful, adapting it can be less risky than starting from scratch.
Cost-effective: It can be cheaper to adapt and improve something existing than to develop an entirely new product.
Meeting local needs: Some ideas need to be adjusted to suit different cultures, regions, or customer groups.
Adding value: Businesses can often increase appeal or function by modifying an existing concept.
Common adaptation strategies
Improving product features: Adding new functions or improving quality to make the product more attractive.
Targeting a different audience: Repackaging or redesigning a product to appeal to a new customer segment.
Changing delivery methods: Delivering services through new platforms, such as mobile apps instead of face-to-face.
Sustainable alternatives: Adapting products to be more environmentally friendly to match changing consumer preferences.
Examples of adapted ideas
Uber Eats: Adapted the Uber rideshare model and applied it to food delivery, allowing people to order meals from their favorite restaurants using the same app.
Facebook Stories: Originally a feature developed by Snapchat, Facebook adapted the idea and added it to its own platform, where it became widely used.
Netflix: Started by mailing DVDs but adapted by embracing streaming technology to become a dominant platform for online entertainment.
Eco-packaging: Brands like Lush and Ecover adapted their packaging by using recycled materials or eliminating packaging altogether to appeal to eco-conscious consumers.
The process of innovation
Innovation is the process of turning ideas—whether original or adapted—into products, services, or processes that are useful and marketable. It requires creativity, planning, testing, and implementation. Innovation can be incremental (small improvements) or radical (completely new ideas).
Stages in the innovation process
Idea generation
Gathering ideas from brainstorming, research, observation, and customer feedback.
Research and development (R&D)
Scientific or technical investigation to improve the idea and ensure it can work in practice.
Feasibility study
Analyzing the practicality of the idea, considering factors like cost, demand, and competition.
Prototyping
Creating a model or sample version of the product to test its design and function.
Market testing
Releasing the product to a small group of customers to gain feedback and make adjustments.
Product launch
The final product is introduced to the wider market with appropriate marketing and distribution strategies.
What helps innovation succeed?
Supportive business culture: A company that encourages creativity and tolerates mistakes can foster innovation.
Strong leadership: Clear vision and support from leaders help bring ideas through to completion.
Skilled workforce: Employees with the right mix of skills and knowledge are essential.
Access to capital: Innovation often requires funding for R&D, testing, and marketing.
Effective communication: Sharing ideas across departments and getting customer input improves outcomes.
The process of adaptation
Adaptation is a structured method that allows entrepreneurs to improve on what already exists and tailor it for new markets or trends. It involves analyzing what works well and what could be changed to make the idea better or more suitable for a new audience.
Steps in adapting an idea
Identify a successful concept
Look at existing businesses, products, or services that have been effective.
Analyze strengths and weaknesses
Understand what works well and what could be improved.
Spot market opportunities
Look for new customer groups or regions where the idea could work.
Make adjustments
Change the design, pricing, marketing, or delivery method as needed.
Test the adapted version
Try it out with a small audience to gather reactions and make final changes.
Launch
Introduce the adapted product or service to the broader market.
Benefits of adaptation
Faster development timeline compared to new inventions.
Easier to attract customers who are already familiar with the concept.
Fewer unknowns, since the base idea has been proven.
Can lead to innovation by combining multiple adaptations or modifying several features.
Sources of inspiration for business ideas
Entrepreneurs don’t generate ideas in isolation—they observe, analyze, and interact with the world around them to gain insight and find inspiration.
Observing problems and needs
Many businesses begin by identifying a common frustration or problem. By creating a solution, they can generate value and attract customers.
Example: An entrepreneur sees that many cyclists struggle to find safe bike storage in cities and develops a secure, app-controlled storage locker system.
Market research and customer feedback
Entrepreneurs analyze what customers are saying, whether through reviews, surveys, or direct conversations. This feedback can highlight gaps or suggest areas for improvement.
Example: Customers may consistently complain that a product is too complicated, prompting the business to redesign it with a more user-friendly interface.
Technological change
New technologies create new possibilities. Businesses that stay current with emerging tech can use it to adapt or create products.
Example: Voice assistant technology like Alexa inspired new smart home products, such as voice-activated lighting and thermostats.
Trends in society
Shifts in consumer behavior, values, and lifestyles often lead to new business opportunities.
Example: A growing interest in health and fitness has led to the development of home workout apps, personalized meal plans, and fitness tracking devices.
The role of entrepreneurs in turning ideas into reality
Entrepreneurs are responsible for taking a concept—whether original or adapted—and transforming it into a functioning business. This requires determination, planning, and the ability to manage uncertainty.
Entrepreneurial qualities
Creativity: Thinking outside the box to generate new ideas.
Initiative: Being proactive and taking steps toward achieving goals.
Risk-taking: Being prepared to invest time, money, and energy without guaranteed success.
Resilience: Overcoming setbacks and continuing to move forward.
Vision: Seeing the bigger picture and having a long-term plan for success.
Skills required
Market research: Understanding customer needs and market conditions.
Financial management: Budgeting, forecasting, and managing costs.
Communication and persuasion: Explaining the idea to investors, customers, and employees.
Technical skills: Depending on the business, these might include programming, product design, or logistics.
Tools entrepreneurs use
Business plan: A document that outlines objectives, strategies, market analysis, and financial forecasts.
SWOT analysis: Evaluates strengths, weaknesses, opportunities, and threats.
Surveys and interviews: Tools to gather opinions and preferences from target customers.
Prototypes and samples: Physical or digital models used for testing and refinement.
Examples of successful entrepreneurship
Apple: Steve Jobs and Steve Wozniak transformed the concept of the personal computer with user-friendly design and intuitive software.
TOMS Shoes: Adapted the traditional business model by including a social mission—donating a pair of shoes for every pair sold.
BrewDog: A craft beer company that started with two friends brewing in their garage, using unique branding and community investment to grow rapidly.
Entrepreneurs combine vision with action, creativity with discipline, and inspiration with execution. Their ability to transform ideas into marketable, successful businesses is what drives innovation and economic progress.
FAQ
Entrepreneurs evaluate the potential success of a new business idea through a combination of market research, competitor analysis, and financial forecasting. First, they conduct primary research, such as surveys and interviews, to understand whether customers would be interested in the product or service. They also use secondary research, like government data and industry reports, to assess trends, demand, and consumer behavior. Next, entrepreneurs analyze existing competitors to identify market gaps or ways to differentiate their idea. They study competitor strengths and weaknesses to ensure their idea offers a unique selling point. Financial forecasting is essential—entrepreneurs estimate potential costs, revenues, and profits using sales projections and cost analysis. They may also conduct a break-even analysis to see how many units need to be sold to cover costs. These combined evaluations help determine whether the idea is feasible, profitable, and sustainable, reducing risk before committing significant resources.
Invention and innovation are closely related but distinct in the context of generating business ideas. Invention refers to the creation of something entirely new that has never existed before. It could be a new product, service, or piece of technology. For example, inventing the first touchscreen phone would be considered an invention. In contrast, innovation involves improving, modifying, or applying existing ideas in new ways to add value. An innovation might not be brand-new, but it makes existing products more effective or accessible—for example, enhancing a smartphone with facial recognition or foldable screens. Invention often requires scientific or technical knowledge, while innovation is usually focused on meeting customer needs or improving usability. In business, innovation is more common and more commercially viable, as it builds on proven ideas. While invention can lead to breakthroughs, innovation tends to be more practical and directly tied to market success and competitive advantage.
Entrepreneurs can protect their original business ideas using a combination of legal protections, strategic secrecy, and brand development. Legally, they can apply for intellectual property rights such as patents, which protect inventions and technical processes; trademarks, which safeguard logos, brand names, and slogans; and copyright, which covers written content, software code, and designs. These tools legally prevent others from copying or using their ideas without permission. Entrepreneurs may also use non-disclosure agreements (NDAs) when discussing their ideas with potential investors, partners, or employees, ensuring that information stays confidential. On the strategic side, building a strong brand identity and being first to market can establish customer loyalty and discourage imitation. Additionally, continuing to innovate can keep the business ahead of competitors. While it's difficult to stop all copying, these combined measures make it significantly harder for others to benefit from someone else’s original work without consequences.
Customer trends play a crucial role in shaping new business ideas, as they reflect the changing preferences, needs, and behaviors of consumers. Entrepreneurs must pay close attention to social, cultural, and economic trends to stay relevant. For example, an increasing focus on health and wellness may inspire ideas for organic food products or fitness apps. The rise of environmental awareness might lead businesses to develop sustainable packaging or eco-friendly alternatives to everyday items. Entrepreneurs often analyze demographic changes, like aging populations or shifts in urban living, to develop ideas tailored to those groups. They may also monitor technology adoption trends, such as increased use of smartphones or AI, which can drive digital innovations. By staying aligned with trends, businesses can generate ideas that meet current demand and anticipate future needs. Failing to adapt to these trends could result in outdated products and lost relevance in a competitive market.
Franchises operate by licensing an existing and proven business model to franchisees, allowing for rapid expansion without starting new businesses from scratch. The franchisee pays to use the brand name, systems, products, and support of the parent company. This model is built on an existing idea that has been tested and shown to be successful, reducing risk for new entrepreneurs. However, many franchises also allow for a degree of local innovation to ensure the business meets regional customer preferences. For example, a global fast-food chain may allow franchisees to offer location-specific menu items to cater to local tastes or cultural practices. Additionally, franchisees might adjust marketing strategies or community involvement to suit their area. While the core brand and operational standards remain consistent, this flexibility helps the franchise remain competitive and relevant in diverse markets. The balance between consistency and local adaptation is key to a franchise’s sustained growth and success.
Practice Questions
Explain one way a business can generate a new business idea by adapting an existing product.
One way a business can generate a new idea by adapting an existing product is by changing its features to meet the needs of a different target market. For example, a company may take a regular smartphone and develop a version specifically designed for older people by increasing the screen size, adding larger buttons, and simplifying the interface. This adaptation uses an existing idea but improves it to suit a new audience. It allows the business to stand out in the market, increase sales, and reduce the risk compared to launching a completely original product.
Analyze how developing an original business idea could benefit an entrepreneur.
Developing an original business idea could benefit an entrepreneur by allowing them to create a unique product that meets a gap in the market. This means they can face less direct competition and potentially charge higher prices, increasing profit margins. An original idea may also attract attention from investors or customers seeking something innovative. If successful, the entrepreneur can build a strong brand identity early and gain loyal customers. However, while there is more risk with original ideas, the potential rewards in terms of growth, market leadership, and long-term success can be much greater.
