Lots of businesses I see are market based, meaning there is a buyer and a seller. As I’ve written about before, these businesses are great once they are established, but are hard to get there. One thing we search for is hunger on both sides.
What I mean by this is that there has to be significant desire from both the buyer and the seller to get a result. I know that sounds obvious but plenty of business ideas we see and work on don’t immediately address this.
“Give us an example!”
I’m glad you asked. As a simple example, if you have a classifieds business and everyone wants to sell Pez dispensers but no one wants to buy them, then an auction site is useless. Yes, you’d think that a market will eventually find the price, but not if people aren’t even interested. This is obvious for Pez dispensers but harder in other examples.
Say you had a business where you offered education courses for small businesses. You match all the many courses and make them easy for the business owners to find courses they want. Sounds good – but do the buyers and sellers care. Maybe the course operators already have enough business. And maybe the business owners don’t really want training.
Or you find a great way to drive leads to restaurants for lunch (we get this one a lot…) The restaurants may already be at capacity over lunch. Unless you can get them when they aren’t full, they aren’t interested. And
If hunger is not present on one or both sides, then you’re going to find it difficult to get growing. And just being present is not enough. It’s got to be strong. Typically for someone to try a brand new product or service that isn’t known, referred to them or shown to be well established the hunger has to be burningly, desperately famished.
Yes, once you get known, referred regularly and established you won’t have to, but again, you won’t get there with the initial, big hunger.
Look for hunger!