SEARCHING FOR A BUSINESS

IDEA
STEP 1 : IDENTIFYING THE
IDEA
Recipe Book
Winning idea came out of a pain point:
Urban company (Urban Clap)
 Innovative online food delivery
space
• How swiggy has differentiated against its
competitors?
– Competitors: zomato, foodpanda
• Own fleet of delivery boys:
• Swiggy appears to have faster delivery
times:
– Swiggy also claims to be faster than its
competitors with average delivery time to be
about 37 minutes.
• Swiggy offers No Minimum Order
Amount’ option to the customers.
– The Minimum Order Amount for Zomato, on
the other hand, is driven by the restaurants
themselves.
• Swiggy has done superbly is its UI/UX.
– You get the phone no of the person
delivering your order, estimated time
(which is dynamic as well) so that you can
directly contact him if there is any issue
• It works on simple principle ‘feed the hungry’
– no reviews no ratings only ordering and deliveries
with commission from restaurant.
• Zomato on the other hand started with only
listing restaurants and getting reviews from
users. This created a environment for users
and restaurants and so now most of the
revenues zomato earning today is from
Advertising and sponsored listing of
restaurant.
 How to Identify Business
Opportunities?

• Identify Market Inefficiencies

– Customers Desire to Experience Something New
– Product Differentiation
• Pick a Growing Sector/Industry

• The ideal way is to look for problems and

needs, preferably problems and needs you
have faced yourself.
Sources of business ideas
 DESIGN THINKING

Design Thinking is a design methodology that

provides a solution-based approach to solving
problems.

It’s extremely useful in tackling complex problems that

are ill-defined or unknown, by understanding
the human needs involved, by re-framing the problem
in human-centric ways, by creating many ideas
in brainstorming sessions, and by adopting a
hands-on approach in prototyping and testing.
DESIGN THINKING PROCESS
 STEPS IN DESIGN THINKING
• Empathy is crucial to a
human-centered
design process such
as Design Thinking
• Empathy allows design
thinkers to set aside
their
own assumptions abou
t the world in order to
gain insight into users
and their needs.
 Define (the Problem)

• During the Define stage, you put together the

information you have created and gathered during
the Empathise stage.
• This is where you will analyse your observations
and synthesise them in order to define the core
problems that you and your team have identified
up to this point.
• You should seek to define the problem as
a problem statement in a human-centred manner.
• With the solid background of empathizing
and defining, you and your team members
can start to "think outside the box" to
identify new solutions to the problem
statement you’ve created, and you can
start to look for alternative ways of viewing
the problem.
• The design team will now produce a number of inexpensive, scaled
down versions of the product or specific features found within the
product, so they can investigate the problem solutions generated in
the previous stage.
• Prototypes may be shared and tested within the team itself, in other
departments, or on a small group of people outside the design team.
• This is an experimental phase, and the aim is to identify the best
possible solution for each of the problems identified during the first
three stages.
• The solutions are implemented within the prototypes, and, one by
one, they are investigated and either accepted, improved and
re-examined, or rejected on the basis of the users’ experiences
• This is an iterative process, the results generated
during the testing phase are often used to redefine one
or more problems and inform the understanding of the
users, the conditions of use, how people think, behave,
and feel, and to empathise.
• Even during this phase, alterations and refinements
are made in order to rule out problem solutions and
derive as deep an understanding of the product and its
users as possible.
CUSTOMER JOURNEY MAPPING
• Quick and easy to learn visual method to unearth
needs that have not been expressed: Helps in
empathising the customer
 Initial assessment /Researching the
Opportunity
• You are excited about your business idea
and you are already envisioning all the
possibilities.
• Now is the time to make sure that your
Business Idea is indeed viable and you not
getting carried away by the sheer
excitement.
 Assessing the Information
Once you have developed your idea, you can move on to assessing the
information that will help you in convincing potential investors or
bankers
IDEATION TO CONCEPTING
• What Is A Business Concept?
– Difference Between Idea And Concept
• An idea can be referred to as a “mental
construct” of
a business possibility/opportunity that you
come up with.
• A concept can be viewed as a form of an
idea that has gone through the process of
fine-tuning and is less inconsistent.
• Business Idea: I would like to start a
fitness centre.
• Business Concept: I plan on starting a
fitness centre that focuses on providing
Zumba classes to working women.
• Steps to turn your Ideas into Concepts
– Find Your Target Market
– Market Identification
– Find The Value Proposition Of Your Idea
– Make It Better
 Steps to turn your Ideas into Concepts
1. Find Your Target Market

• When you go about finding and defining

your target market, make sure you:
– Analyze Your Customer Base:
– Figure Out Your Competitors:
– Analyze Your Competitors’ Customer
Base:
 Steps to turn your Ideas into
Concepts
2. Market Identification
• In simple terms, it refers to a process of
determining whether your business idea is
of any interest to your target audiences.
 Steps to turn your Ideas into Concepts
3. Find The Value Proposition Of Your
Idea
• Value Proposition is a clear statement
which –
– explains the benefits
– explains how the offering solves customers’
problems
– differentiates the offering from your
competitors
 Steps to turn your Ideas into
Concepts
4. Make It Better
• Take your feedback and test it out
• Keep striving to make it better until there is
nothing else left.
 STEP 2: Assessment of the
Concept/Idea
• Validate the idea and understand the depth in
the market.
• When the pain-point is identified, you need to
assess and ask yourself
– if the pain-point is large enough and critical
enough for you to solve
– Think of existing solutions available. Are
customers satisfied with such solutions?
– it is something on basis of which a large business
can be built. Sometimes, a personal pain-point
can bring you to a very large market.
For assessing your idea, you should
try and answer these questions:
• 1. What pain point are you trying to solve?
• 2. Who are you solving it for?
• 3. How are you trying to solve it?
• 4. Is anyone else doing it?
• 5. Can you do it differently from them?
• 6. Can I charge my customer? How much?
 Example :
UrbanClap to understand how to assess an
idea
• About Urbanclap
– UrbanClap enables users to find any service
professional like a plumber, a wedding
photographer, a yoga teacher, or an interior
designer.
– UrbanClap helps people by providing them
with trusted, efficient, affordable and
credential professionals for all service needs.
What pain point are you trying to solve?
Who are you solving it
for?
How are you trying to solve it?
Is anyone else doing it?
Can you do it differently from them?

• Customized offerings for consumers

• Organizing the unstructured market
• Consumer trust
– Is built by providing the service seekers, the social
network profile links of service professionals
whom they are thinking to hire for their work. It is
a way for users to authenticate the services which
has been put up by UrbanClap
• Mechanism of removing service professionals
with low rating.
 Can I charge my customer and how much?

• In case of UrbanClap, it gets

commission-cut from what the service
providers charge the users.
• Then, they have another addition to their
revenue model, called reverse auction,
– wherein UrbanClap charges the service
providers meeting consumer requirements for
putting forward their leads superseding others.
 STEP 3: Understanding your Target
Segment
• Identify the customer segment
• Market segmentation
– Geographies- rural urban, region/city
– Demographic- age, gender, income etc
– Behavioural- benefit/attitude
• Narrow the focus to the right segment
• E commerce expansion- 3 waves
– First wave
• Wave of electronics and fairly standard products: mobile
phones, digital cameras, books, DVDs, CDs etc. Online.
– Second wave
• people buy brands of fashion
– Third wave
• Non-standard products which are products such as the
products which pepperfry sells, which is furniture and
home
• Change in Consumer behaviour in India
– It took about 15 years for these 3 waves to
materialise in developed countries and in India
these three waves happened in a span of 5 years
and today we know that customers buy a lot of
furniture and home products online
– women have become a large chunk of the overall
buying segment in e commerce
 Staying focused helps
• It is best to choose a smaller / niche segment
of customers within the overall market and
serve that one segment really well.
• As the venture grows, you can expand into
other areas.
• Saavn is one such company that built its
product keeping a niche in mind.
What are the target markets of these players in
the market?

• Initial target
segment: working
couple
• Gradual expansion:
use cases for how
different people
want to use it
• Indigo Airlines –
– focuses on middle class Indian households who
are price sensitive and value on-time performance
– Not for the luxury class
• Most good ideas start off as niche
– Facebook started only for Harvard students
– Google started as just a search platform
 Is it likely that your entry into this segment will
provide the platform to enter other segments you
may wish to target in the future?
• Flipkart when it started, used to sell books
and CDs, they then ventured into
electronics and are now even retailing
apparel.
• Another example is Nike, - started Nike as
a niche player addressing the athletic
players who needed special sports shoes.
 Evaluating the target customer
• Is there a target segment where I can offer the
customer clear and compelling benefits at a
price they are willing to pay?
• Chaayos
– USP of Customisation
– “Experiments with Chai” where they serve over 25
varieties of tea.
• At Chaayos, Saluja focused on selling affordable,
customisable brews instead, allowing visitors to pick and
choose from 12 basic ingredients (including cardamom and
holy basil) to create their preferred type of tea.
• Each cup was priced between Rs46 and Rs149
($0.71-$2.31), and the menu also featured a variety of food
items such as pakoras and egg buns.
• In comparison, a cappuccino at a Cafe Coffee Day starts at
Rs100, while at Starbucks it’s Rs155.
• That combination helped make the cafe a popular choice
among the hungry office crowd, with customers mainly
purchasing a Rs65 ($1.01 including taxes) cup of chai and
some snacks, taking the total average spend per transaction
to around Rs260-Rs270.
• Are these benefits, in the customer’s minds,
different from, and superior, in some
way-better, faster, cheaper or whatever – to
what’s currently offered by other solutions?

The real product is not the

hardware but a service
which connects you data
to real fitness coaches on
the
cloud who will be advising
online and that's what
brought the solution
together.
 The next question is how large is
this segment, and how fast is it growing?
India's online food aggregators are taking
lessons from China

China’s food-delivery market was estimated to

be worth $37 billion in 2017, growing from $25
billion in 2016.
 Sizing the Market
There are 2 approaches to arrive at your
potential market size:
• 1. One is the Top Down Approach :
– first look at the broad market and then move down
to the target market segment.

• 2. The other is the Bottom Up Approach.

– In the bottom-up approach you start by estimating
the potential sales of a store in order to determine
a total sales figure
• First step would be to gather secondary
data from trade publications or any other
relevant sources. Eg. IndiaStat,
Euromonitor
Measure market size by:
• Number of customers in the market
• The aggregate money spent by these
customers on the relevant class of goods or
services
Calculate the market size of air conditioners in India
STEP 1. Estimating the population size

75
mn
 Existing demand of ACs
URBA RURAL
N
% of No.of Avg No Total % of No.of Avg No Total
popul families of AC’s populat families of AC’s (in
ation (in mn) AC’s/fa (in ion (in mn) AC’s/fa mn)
mily mn) mily
UPPER CLASS 2% 1.5 1.5 2.25 1% 1.8 0.2 0.36
UPPER MIDDLE 8% 6 1 6 10% 17.5 0.1 1.75
CLASS
LOWER MIDDLE 50% 37.6 0.1 3.76 35% 61.3 0 0
CLASS
LOW INCOME 40% 30 0 0 54% 94.7 None 0
TOTAL 12.01 2.11

TOTAL AC DEMAND : 14.12 MILLION

 Non
e

• New demand for AC’s= Existing demand *growth rate

• Replacement demand for AC’s = Existing demand/life of an AC

Assuming average price of an AC is around Rs. 25,000,

we can arrive at market size of AC at approximately Rs.
71 billion
 Bottom-up approach
• Let’s say you want to open a burger chain in
India and need to know how big the market is.
How will you go about sizing the market?
• Existing burger chain players in India include
McDonalds, Burger King, Wendy’s, Johnny
Rockets. Of these players, McDonalds
commands the highest market share and
hence we can assume that market size for
McDonalds will be close to overall market size
for burger chains.
• So let’s calculate market size for McDonalds.
For this, we will estimate the number of burgers sold per outlet and
then multiply it with number of outlets in India and the average price of
a burger.
• Market size for a burger chain = (Average
price burger) * (Number of outlets in
India)*(Estimated number of burgers sold
per outlet)
 Flyrobe
• On-demand fashion rental
service for premium apparel
brands.
• Indian middle-class women
between the age groups of
22-35 years
• Rentals hover at around
8-15% of the price of a
garment.
• Women can pick something of
their choice whenever they
are going out – be it a small
dinner, a date, an office party
or a wedding
Differentiated and superior offering
• Guarantee 3 hours delivery of western wear.
• They provide superior customer experience.
– They also provide outfits with good fitting where
they provide custom-fitting for their ethnic wear
collection to ensure a great fit
– for western wear collection they allow users to
order a back-up dress
• Lease My Outfit service allowing consumers
to list items from their own wardrobe on the
website for rent. Forty to fifty percent of rental
proceeds are then shared with sellers
 Market size
• The market size for ethnic wear is $15
billion and the market size for casual
western wear is $4billion.
– Of this, they estimate the rental market to be
about $4-5 billion.
• On their ability to enter adjacent verticals,
the company, along with clothes, is
planning to rent bags & accessories also.