We deal with proposals for start-ups all the time. And frequently we are asked "what is the perfect idea for a start-up?" This is an easy question to a complex issue. We'll try to give a simple answer:
The dilemma in defining a new business idea is the following:
The general idea is that in order to generate value, you need to change behavior. Without a change in behavior there is no significant value. But any change in behavior will increase the entry barrier.
The trick is to define a proposition that uses an improved version of an existing behavioral pattern as a carrier and ensure sufficient additional content to enable new behavior once the product or service has been bought.
The genius of the introduction of the iPhone was that it was an improved cell phone (the carrier to the market) and the first truly usable handheld computer with immediate access to a wealth of applications at unprecedented price levels at the same time!
So the ideal start-up has ALL following characteristics:
- High scalability
- High leverage potential
- Includes a carrier to the market based on an improved version of an existing business model
- Includes the potential to revolutionize a market with new value creation once the customer is locked in