Businesses that make (real) money revolve around one of two ideas:
- They sell shovels
- They are middlemen (middlepeople?)
They sell shovels.
This is stolen from the old saying that during the American gold rush the people who made the money were the ones selling shovels. Or facilitating others to go and do what they wanted (in this case, chase a wild dream).
Uber, the example you used, sells shovels. It lets people make money from their car. Real money. Not peanuts. Your idea to sell food to neighbors didn't have the potential to make much money. You weren't selling shovels, you were selling work (cooking is hard work).
Now, let's take your current business (which you list in your profile). You sell shovels because you help companies get what they what in terms of engineering management (lots of money to be made there). Better engineering processes usually trickles down into the finances. In a way, you are selling money.
They are middlemen.
A middleman is someone who simply takes a cut for facilitating something. They import beer from somewhere else and by doing that they jack up the price a little bit and resell it to you. This is a very straightforward mechanic.
Amazon is one of the best middlemen out there right now. It even changed the game by reducing the friction in selling online. Their whole "fulfilled by Amazon" approach is a classic middlemen tactic.
Middlemen sell the idea that they make getting what you want easier.
How to apply this to software
Selling shovels: Build a product that makes people money. Ecommerce is still growing. Do something there.
Be a middleman: Find something to facilitate. Look for inefficiencies. How? Listen to complaints. People love to complain to someone who listens. Make some contacts on social media and listen to people. They will show you the way.
One last thing: don't be stupid. Big ideas are tied to a big ego. You are not Musk, Jobs, or Gates. Who cares?! Look for small ideas that you can execute well. And then execute, not for passion or ego, but as a grind. Like a regular job. Because that's what it is. Good luck.
My problem was my nomenclature - they are both entrepreneurs (one builds, they other connects built stuff). You've done what I wanted to do so elegantly!
Thank you.
Link: https://www.fastcompany.com/40435064/what-alan-kay-thinks-ab...
Environment wise, I'd say that there is opportunity in the data collection side (this would make you a middleman). Lots of orgs need a way to CRUD localized enviromental data. Look into it.
About dividing and conquering.
Again: map, filter, and reduce. Map your ideas to business models (money making functions). Filter them to remove the ones who don't have a clear path to revenue. Reduce down to the one you can execute. Take your time.
All companies want business process automation, but none of them want to pay enough for it, or have their shit together enough to work with us, usually.
We still manage to get enough business to make money, but we've had lots of clients that absolutely needed something done by a certain date drag their feet about signing contracts to the point where we did free work expecting the contract to be signed, then they still don't sign the contracts or say they couldn't get their data ready to send to us so we could do what they wanted with it, or their IT department decides they can do what we do (and then ends up failing miserably because their culture is slow and awful), or all sorts of things.
It's quite a mess, but there is money to be made in it. Our corporation alone has billions of dollars in revenue from it every year, so the industry as a whole has to be pretty big.
Our particular building has had a lot of bad luck since we were a smaller company that was purchased and absorbed into the big corporation, and a lot has happened since that has resulted in us becoming a lot, lot smaller than we used to be (There's even talk that the corporate overlords might close down our office building to save money and force relocation soon).
If I didn't have so much going on in my personal life right now I probably would have left already, like many others already have. If they do close and force relocation, then I will finally leave the company at that point. I just bought a house, I'm not going anywhere for awhile.
The clients that I'm referring to that dragged their feet signing contracts, couldn't get their own data in place, or broke/backed out of existing contracts suddenly and without any issues of performance on our parts were major, major companies as well. I'm sure you've heard of each of them.
You day this about uber > It lets people make money from their car.
I think the implicit assumption above is that cars don't make money traditionally.
Same can be said amazon: "It let's you make (more) money from the things you're already selling"
Uber is also a middle man between ride-hailer(user) and driver, the same way Amazon is a middle man between buyer and seller.
Are the examples incorrect because they're way too similar (platform plays) or is my understanding incorrect (that they're very similar)? I'll be happy if somebody could take a few minutes to explain
Fashion
Although they can be called scammers and fraudsters when they are tech companies that can't deliver there are other sectors where utility isn't as apparent (literal fashion, art) and then sometimes well established players that are a little bit of each (middlemen, shovel salesmen..) start to capitalize on this angle, maybe Apple is the archetypical example?
Edited for clarity.
It's important to keep in mind that selling shovels and being a middleman are not the only options. There are certainly others. Its just that my exoeriences and studies have pointed to those two being the most profitable in the current cultural setting.
Or in other words, a gambler. Your profit from the game relies on convincing people that your game is fun and worthwhile; two ill defined concepts that vary from person to person.
With a business idea (shovels or middleman) your profit comes from convincing people that your product will help them make more money than they're paying you.
In your worldview all of life is just a gold rush. I'm not sure if I find that analogy useful.
I think what we're looking at is selling experiences?
You can sell shovels and bundle experience with them - I think it's pretty straightforward to view Apple from that perspective.
But home furnishings are just purely experiences. Clothing seems to fall into the same experience category.
So maybe it's a sort of trifecta. Middlemen, Shovels, and experience.
When I buy a television there's going to be a middleman - a retailer - who probably can provide some pro/con to the experience category. But what's driving me is the experience that the TV will afford. Same with IKEA.
When I buy a Macbook Pro I'm looking for a device that can help me edit code and video in ways that I enjoy, so the shovel factor is important to me.
If I'm going to buy a luxury car like a BMW then there's the shovel-factor of having reliable transportation, but the premium price comes from experience.
Utility, middle-men, and experience. The extra category of experience seems to fill in the gaps.
(Obviously I’m massively generalising. I’m not having a dig at anyone here.)
I’ve realised recently that there’s good money to be made solving little problems. Not Zuckerberg money, but who wants that lifestyle. Ramen money.
Example: my partner is a medical copywriter. Some jobs, she spends hours reformatting journal citations. All she’s doing is making part of it italic, making sure the dashes are all en-dashes, whatever.
How many medical copywriters are there? How many people have this problem? Now, it’s not a life-changing thing, but it’s what computers are for! So we’re building a little tool that will make this easier for us.
What’s our goal? I don’t know. To make enough to pay our rent? That’d be lovely for starters and what is that, a thousand people giving us $5/month each? That’s nothing.
It also helps, of course, that she’s in this industry. She knows where to go to find other people with the same problem. Solve something in your domain, and everything’s going to be easier. (It’s also why I’m not afraid of telling everyone here what the idea is. Chances of someone else being passionate and knowledgeable about this, enough to steal the idea, are near nil.)
That’s where my head’s at, and it makes thinking about this stuff much easier for me, at least.
I can recall back in the old Business of Software forum on joelonsoftware when I pointed out that I was digging in my garden and came across a grub. Since I was thinking about the people who said they could never "think of business ideas" I wondered if there was software that had something to do with grubs and bugs. Less than a minute on google and I had pages of Pest Management Software.
The moral of the story was that if I could come up with software business ideas while digging in the dirt, it shouldn't be that hard to see opportunities all around.
Basically, it's difficult for me to imagine personally paying for any type of SAAS offering, so when I'm working on a project with a paid model, sometimes I have to employ a 'suspension of disbelief' because I'm working on something that I know I probably wouldn't be willing to pay for (not because it sucks, just because I'm hesitant to pay for any software or online service).
The same can be said about smaller services too. Something that sounds simple, like sending emails is actually very time consuming due to spam-filters etc. First you have the initial work, and then you have all the follow up during the lifetime of your business. This includes not only the cost of running servers and patching software, but also all the bugs. Every time a customer does not get a mail, you will have to dig into the system to find out why. Hopefully the dev who implemented it still works there, or you would need time for the new person to ramp up.
The alternative is to pay a small amount for a 3rd party mail service.
To give an example I sell my software through Avangate, this results in a single invoice and payment each month. I know if I switched to Stripe it would save my a couple of percentage points on each sale but then I'd need to maintain systems that handled EU VAT laws, issue license codes and import a lot of data into my accounting system, in fact I'd need to upgrade my accounting system which is fine with a few transactions each month but would be stretched at fifty or more.
This has been my experience with most of these services, great if you want to grow a large business because you are effectively outsourcing some of your work but it does tend to complicate things. Personally I like my work to be small and simple.
As per your example, have you done the research concerning health codes and what sorts of operations violate them and which don't? I'm pretty sure off the top of my head that if you're not actually selling food, as in taking in payments and delivering food, you're not on the hook for what other people are doing in their homes.
So I can envision a service facilitating neighborhood meal swaps. The state might not exactly like it, but it won't have anyone to go after for health code violations. This is pretty much exactly what Uber did, they kept toeing ever closer to the line of the actually illegal until they had both the legal budget and a public mandate to fight City Hall.
Ok, maybe those are grand ideas that need billions of dollars of research, but any one of those involves a myriad of smaller improvements that can turn into startup products. The potential for improving our lives is so vast I cannot imagine how could anyone say "I have everything I need".
Why not just have the washer also be the storage, then you just walk up to it and select e.g. plate + fork on the frontend and it spits out a clean pair for you. When you're done you place them back in and they're washed and stored for later use.
Same for the clothing, although in that case one might argue that a lady might enjoy the display of the product and wants to physically see them.
Ideally in the (small) house of the future the tighter packing allowed by the machine might be a great advantage.
It would be really hard to improve on that combo.
Then it's down to effectively 15 seconds.
[1] https://www.indiegogo.com/projects/unico-smartbrush--3#/
Yup. More important issues like no rule of law, no sanitation, low literacy rates, mob rule, etc.
"Clamping down on innocent people making informed choices about their lives" is what you get to once you stabilize a society and solve its most urgent, life-threatening problems. It's what you get to once people are living in relative health and safety, and then you discover that "informed choices" aren't really that informed, because they're made in the environment full of scammers and people who can't give two fucks about other human beings, if it means few dollars more.
And once you get to that, you can live in a world where food poisoning in a restaurant is national news.
https://theculturetrip.com/europe/germany/articles/discover-...
In addition to the fancy ones in the articles there are a lot that are cheap and emphasize dining together with strangers. I went to a Syrian refugee dinner in a cafe/film theater. The Syrians were all smart college grads with interesting stories.
There used to be a lot of squats in Berlin that were given legal status as long as they did a community dinner once a week. Punk bars and cafes would serve vegan chow for €2. It wasn't like a restaurant at all, more like visiting friends. Probably this still happens but I haven't gone in a long time.
That's just silly. There are plenty of countries out there with friendlier business climates that aren't still in the bush league. Most South American countries and Eastern Europe and many Asian countries should be on your list if you're considering moving abroad to start a business.
Personally my pick is Colombia.
Seriously though, I get that archaic rules need to be fought in order to be changed. But there are proper ways to do that, and Uber did it in about the most antisocial way possible aside from murdering people. Please, don't be like Uber. Innovations need a stable society to flourish.
Without their 'hustle' and willingness to take steps which were risky, relatively antisocial, and often illegal (e.g. entering cities illegally first and asking for permission later, organising pretty challenging pressure campaigns against local politicians, authorities, etc.) they'd not have made it past a year, let alone revolutionised an industry.
Their downfall was applying the same risk and hustle mentality indiscriminately, including within their own company.
Are you kidding? If SpaceX was able to break ULA’s monopoly on launching god damn rockets to space and do it in a way that doesn’t break laws and regulations, Uber certainly could have done the same in the taxi industry.
SpaceX had essentially one body to convince - NASA. And given NASA's dependence on ULA to get things into space, and ULA's reliance on Russian rocket engines (aside from NASA's traditional conservatism and reluctance to support a brash new young Silicon Valley upstart company not doing things the NASA way) they quietly welcomed SpaceX with open arms, and paid SpaceX huge amounts for their development. Also, I'm not aware that ULA was a 'monopoly' in the usual sense of the word - they've not taken measures to suppress potential competition in the past, have they? (There's no launch provider badge system!). They were just the only US company that could offer orbital services at that time.
tl;dr, NASA had major incentives to support SpaceX, and ULA wasn't a true monopoly.
In contrast, Uber faced hundreds of different NASAs - each one the local government of any and every major city they wanted to enter. In each case, the challenge and the hurdles in their way would have been different. In each case, there were multiple long-established alternatives (the incumbent taxi firms). And in many cases, the lobbying power of the incumbent taxi firms on the local decision makers would have been considerable (via overt lobbying, relationships, threat of strikes, maybe even bribery). All of this would have made making the case for Uber in theory to unenlightened local politicians almost a non-starter. What worked for Uber was getting their service up and running (sometimes illegally), users seeing that it was a dramatically better option than the incumbent uninnovative taxi firms offered, and then leveraging that support, together with other forms of pressure, to be allowed to continue business.
tl;dr, local governments generally had disincentives to support Uber, and Uber faced multiple entrenched competitors, sometimes in a monopoly position.
There was some bad blood between them and the regular taxi corps, some tyres got slashed, but the court sorted things out, updated the regulations a bit, and now iCar and other companies happily coexist. The major difference between them and Uber is that they didn't keep breaking law with impunity, but engaged in finding a legal solution and made the entire space better for everyone.
Sure, this is not the path to exponential growth, but maybe not everything is best done by VC-backed "zero to billion dollars corporation in 5 years" businesses.
- Backend and Frontend development are never in sync, so we have to resort to mocking the API by using dummy code. There are API mocking services, but I would prefer something that mocks locally. Charles Proxy is great for this but it can be limiting and isn't very intuitive.
- Every time our customers face an obscure issue with the product, there's plenty of to and fro to understand the root cause of the issue. If there was a product that could tell us the trail of actions that the customers followed, it'll make debugging vastly easier.
Of course, there's a world of difference in recognizing the problem and creating a sustainable product. But, every organization is inefficient in some sort of way. It's just a matter of observing carefully.
Sentry.io may be a good start, perhaps?
This seems to be the state of the art: https://www.youtube.com/watch?v=rNcPVvIs_tk http://www.moley.com/about-us/
They state that the consumer version is set to launch in 2018. It will probably take several more years to work out all the kinks. But this is likely the actual future of cooking, not the local outsourcing.
Your identified problem was - Don't like cooking and don't want to eat outside.
The solution you had was - crowdsource cooking.
But how about looking it in another way? What do you disliked more - cooking or unhealthy outside food?
I dislike cooking. One of the issues with cooking is that prep, measurement and deciding menu takes time. Lot of times I am stuck with - what to cook today?
So, how do we solve this problem? Meal Kits.
I know they still don't take away from the fact that you need to cook. But it is similar to getting food from outside, even if they are your neighbor.
So, it is not only the problem but solution that matters as well.
Your cooking annoyance is a good place to do thought experiments. I don't always want to cook, but in cases where I don't want to cook I don't always want to go out. Proposed solution: Get my neighbours to cook for me. It's a good idea, but after you investigated, it was infeasible.
There are two ways you can go with this. First, you now have a new annoyance: normal people can't sell their own food creations without poisoning people (or, alternatively, the government discourages people poisoning each other :-) ). Nothing is saying that you have to stay with your original annoyance. You can move. And since this is a thought experiment, maybe you might come up with another idea and investigate that. If it doesn't pan out, then you will get new annoyances.
This technique is pretty similar to Toyota's "5 whys". Before they decide on how to fix a problem they first ask why the problem exists. When they answer that question, they ask why that situation exists. They go down 5 times (I don't think that number is actually carved out in stone, but you get the idea). At that point they have a much better idea of the situation and can choose the most effective place to solve their problem.
But you may come to a realisation that "getting my neighbours to cook for me" is not going to be feasible -- and that nothing down that chain is going to work out. That's not a problem, because it's not the only solution to the problem.
For example (and feel free to steal this idea) I live in Japan and my wife was ill the other day. Normally she makes me a packed lunch. I was too busy with work to return the favour, so instead I went to the convenience store and bought some instant ramen.
You may have eaten instant ramen before. When I lived in Canada, I learned how horrible it is. But in Japan, if you spend $2 instead of $1 the instant ramen is pretty freaking good. If you spend $3 instead of $2, it's almost as good as I can make myself (the only real downside is that the toppings are not really numerous enough).
I thought to myself, "I wonder if I could export these amazing ramen soups to the US. I'm sure you can get them in specialty stores, but this is absolutely ripe for exploitation on the web. These things weigh nothing and they will ship perfectly. And they don't rot in any reasonable time frame. Why the heck is there not anything like this?"
So I did my 5 why's and realised that if you want to do it, you have to be in the US (or wherever you want to sell) because you need to order container sized amounts to make the overseas shipping reasonable. This means you need a distribution centre at the destination. But I absolutely guarantee that Nissin (or whoever you want to talk to) would be thrilled to sell you a container of ramen, with which you can do a "Ramen of the week club" on the internet (surely this already exists... surely... I haven't actually checked).
Anyway, that's an example. Don't give up is the answer. One idea is nothing. Let it go. Use it to inform your next move. Keep going and never stop.
Edit: I just had a quick look. There are internet ramen clubs, but their ramen is all crap. Ripe for disruption -- look for ramen in a bowl shaped container.
Edit Edit: Darn: https://japanramenbox.com This is exactly what I was thinking. Hope they do well (though you might be able to undercut them ;-) ).
They have what is essentially this service in Singapore. Professional kitchens that make home cooked meals. Very popular.
I would say that AI and cryptocurrencies are the startup clichés of today.
Don't start with a solution in search of a problem. Instead, start with a problem, and see if you can find a solution. When comparing problem-solution pairs, discount those that involve trendy, hyped technologies, to account for mental bias.
To say they're cliche suggests we've exhausted all ideas in the space which we definitely have not.
I think just about every industry that seems, from the outside, to have exploitable conditions like this has hidden barriers. The taxi industry looked exploitable, but in fact was tightly regulated. Uber has managed to capture some of the market by pretending to not be a taxi company, and wound up in a plethora of legal battles for their trouble.
I propose that how obvious or necessary a business idea appears at first glance is directly proportional to how difficult it would be to implement.
You can't be a food distributor if you're not distributing food. I've gone to our local small business seminars for food service, and I've been told that as long as you're not handling food at any point, you can't be held responsible.
Anyway, regarding food you could have thought about a machine/robot based solution, at least to begin with :)
Brainstorm Uber with a group of people and you'd get challenges that taxis already exist and are fine, that laws stand in your way, and that people wouldn't want to get in a stranger's car.
Or to misquote (I think?) Steve Jobs, if Henry Ford had asked his users what they'd wanted before building the Model T, they'd have asked for a faster horse.
I also find that sometimes I can think of problems that aren't really a single problem but a whole category of problems, and I have no idea which particular piece I'd like to break off, or any idea for a solution.
Especially regarding food intake, where one un-hygienic perdon could endanger the lives of many.
Personally I like the idea of regulation to ensure a minimum level of quality and security. Look at the aviation industry. Just as an example. What do you think makes flying one of the safest methods of travel?
It is easy to dismiss regulations as hindering. But be prepared to have the consequences dealt with.
Does anyone else feel pretty content with what they have?
Because this strategy I think Paul Graham has talked about in one of his essays for ideas. And to be honest, I do genuinely feel like I don't have much if anything to complain about, and so I can't really think of startup ideas. To the point where I'm just consulting at the moment because I can't think of any startup idea to work on.
I mean I have ideas of problems I want to solve - but they've all been met by massive resistance because they're huge problems. Like for instance one idea I had was I hate making food, but I don't want to eat out all of the time. Can you crowdsource cooking from your neighbors? So I tried building that platform. I instantly discovered there were huge safety regulations about cooking, and that really baking (or anything that isn't extremely perishable) is the only thing you can pretty much do out of your home and not get slapped by the state for violating health codes. So I'm just sort of defeated...the only problems I want to tackle just seem massive and I can't seem to find the divide-and-conquer algorithm to help the world in a smaller (but still meaningful) way.