From the course: Entrepreneurship: Finding and Testing Your Business Idea

Understand the difference between idea and opportunity

From the course: Entrepreneurship: Finding and Testing Your Business Idea

Understand the difference between idea and opportunity

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- A long time ago, I was having a conversation with a friend, and he was excited because he had this great business idea. It was to stream video, movies, and TV online. The problem was it was just that, an idea and nothing more. What was the difference between what my friend said to me and people actually creating services, like Netflix and Amazon? The difference comes down to what I call the opportunity factors. These are the principles that combine together that lead to an actually successful business. First, demand. How much does the market actually want this product or service? Next, expertise. We actually have to have the know how in the industry that we're trying to get into. That's what we need to make it happen in that business. Third, resources. Your resources as an entrepreneur are money, equipment, materials. We have to have the things necessary to create that product or service. Fourth, profitability. We actually have to make money in the business. This means we want to look at the price and cost differential and make sure that there's enough money to be made. Distribution is critical because it gets the product into people's hands, and we need infrastructure and connections to make that happen. And finally, it's your proprietary advantage. This is what makes you unique in terms of a patent or trademark, or a process. We're going to go into an in-depth worksheet into each of these opportunity factors beginning in the next video.

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