Disruptive technologies have been driving innovation for hundreds of years, but there has never been a better opportunity to bring efficiency to an inefficient process, function or industry.  The Flat World (best described by my colleague George Benckenstein) continues to provide unparalleled opportunities to enable boot-strapped innovation with the best capital…paying customers!  Just as the railroad companies didn’t realize they were in the transportation business and missed the industry evolution of the airlines, the money transfer companies (Western Union) and the credit card processing industry missed the consumer-to-consumer opportunity that enabled the likes of PayPal.   

With all the lessons learned of the past, PayPal should have been a new product in an existing industry from an industry leader, but it wasn’t.  PayPal was the result of great entrepreneurial minds that indentified an opportunity to dramatically improve a business process with industry disrupting technology.  So what’s the opportunity for you?

Opportunity Identification

Business process improvement opportunities are everywhere, just look around you.  The best places to look for process improvement opportunities is where there are multiple human touch points.  For example, I recently spoke with a business-to-business company that has created a $30mm revenue business by reducing the human touch points in the core process from 15-20 hands down to 3-4.  This process improvement allows them to sell at the competition’s cost and still earn 60% margins.   As a business owner or employee of a major corporation, you’ve probably seen opportunities to save the company money or to increase ROI, but for some reason, that opportunity isn’t #1 on the company’s to-do list…there’s a different primary priority that soaks up the organization’s energy and that great process improvement opportunity never gets implemented.  

If you’ve seen this situation before, your organization is probably not the only company suffering with the observed inefficiency and the inability to execute.  And that’s where the potential opportunity may exist.  Because you are intimately aware and involved in the problem, you have a great vantage point to configure a solution.  But  solving the problem is only half of the work required.  You need to confirm that the problem isn’t unique, determine the volume of companies with the problem, quantify the upside (cost savings or revenue/profit increase), and simplify a way to monetize the solution.

Top 5 Innovation Characteristics

So now that you know to look around you for those business process improvements, you need to understand the characteristics of the best innovators so you can increase your probability for success.  If you want to innovate, you need to possess the required skills, partner with innovative people or have innovative employees.  In the December 2009 issue of Harvard Business Review, three authors collaborate on “The Innovator’s DNA” to showcase the five discovery skills that separate the true innovators from the rest of us, and here is what they found:

• Discovery Skill #1: Associating – The ability to successfully connect seemingly unrelated questions, problems or ideas from different fields, is central to the innovator’s DNA.

• Discovery Skill #2: Questioning – The best of the best always find a way to maintain a 3:1 question to statement ratio and most often ask “Why?”, “Why Not?” and “What If?”.

• Discovery Skill #3: Observing – Discovery-driven executives are like anthropologists, producing uncommon business ideas by always observing customer behavior.

• Discovery Skill #4: Experimenting – Like scientists, innovative entrepreneurs actively try out new ideas by creating prototypes and launching pilots. 

• Discovery Skill #5: Networking – Unlike most execs that network to sell or promote, innovative entrepreneurs network to learn.  They make a conscious effort to extend their knowledge domains.

Execution Risk

Once you have your team in place, then you need to execute.   One of the key components to executing a business process improvement opportunity is to follow a proven methodology.  The industry is widespread with approaches, models and best practices, so do your research and get to work.

Business Process Management is a powerful approach for organizations to improve performance and to improve customer satisfaction. In spite of the wide acceptance of the benefits of process awareness, the improvement of Business Processes is still more art than science. As a result, the ability to create prototypes and launch pilots is critical to the innovator’s ability to successfully execute.

Business Process Improvement Ideas

1. Direct Mail - I recently read of a new concept in Ad Age about digital mailboxes where direct mail will be pushed instead of snail mail.

2. Coupons - Most retailers and manufacturers are trying to figure this space out.

3. Medical Billing - Systematically automating the billing, collection and reconcillation of the health care system is a great opportunity.

4. Automobile Diagnostics - Using the technology in automobiles to help consumers assess the health of their car could be priceless.

5. Business-to-Business - Leveraging the mobile phone to extend small business owners’ office provides continuous connectivity.

Keep looking around you, keep asking WHY and don’t be afraid to take the leap.  Good luck & stay tuned!

-hb

If you read the first three 2010 Business Opportunity posts (Entertainment, Franchises & Home Schooling) then you know they were very low tech and didn’t require a lot of technology knowledge to execute.  So now for a tech play!

In 2003, I saw an awesome opportunity in digital advertising:  My research showed that over the next 5-10 years (meaning between 2004 and 2013) $600 billion dollars in advertising spending was going to move from offline channels to online channels.  That is to say, B2B and B2C marketers were going to shift their advertising spend from newspapers, magazines and traditional channels that can’t be tracked to online channels like websites, internet radio and email that provide instant feedback and analytics for ROI assessment.

So now that it’s been 5 years, what has happened?

The History
The opportunity has come to pass just as analysts and the research suggested, maybe a little slower, but none the less, the money has flowed.  How can we tell?  How many newspapers and magazines have you seen go out of business in the last 3-5 years?  The newspapers that are still printing, the digital component of their business is thriving, while the print side is morphing into  a different type of business. 

So if the shift in advertising spend is already in full swing, where’s the opportunity?  This one requires capital….a lot of capital!  Digital Signage.  You know all those print signs you see in public transportation locations (bus stops/stations, train stations, airports, malls, etc)?  Well, they’re going digital if they haven’t already.   This is what I call the small side of digital signage.  It also isn’t new, as there is an entire industry already up and running around how to install, service and manage a digital signage network. 

The Opportunity
Wal-Mart created a $150 million business w/80% margins by putting digital signage in their stores.  There are thousands of stores that get their share of traffic that would love to partner to create a new revenue stream.   Although in-store digital signage will continue to grow, if you want the big upside here’s where this concept is still on the ground floor:  Digital Billboards.  You see all those billboards around your city…well 60%-80% of them will be digital in the next 5 -10 years.  While big companies like CBS, Viacom and Lamar own a lot of the biggest digital billboards, mom and pop shops own most of the billboards in America.  And guess what – they’ve been owning that billboard for decades with the same antiquated business model without scale.  So What?

The Upside
The billboard on the highway with one impression on it may cost $1k – $50k/month depending on where it is and how much traffic passes each month.  When you make the billboard digital, you’ve just created unbelievable scale, reduced your maintenance cost and expanded your customer base.  You see, digital billboards run 24/7/365, which equals over 5000 15-second impressions each day for a total of ~40,000/week, ~175k/month and ~2 million/year.  If you calculate the cost/impression at average internet advertising rates your new monthly potential on the billboard = $100k minimum to over $500k.  On average, installing a digital billboard will provide a 10x lift in revenue. 

So What’s the Catch
I told you this opportunity required capital.  The average full sized billboard you see on your inner-city interstate or the highway when traveling cost between $250k – $500k.  Yeah, I know – BUZZKILL! 

I’ve been doing that Bank of America “Keep the Change” thing in my savings account hoping to buy a digital billboard one day.  It’ll happen….one day!   Seriously, you can look at the capital requirement as a deal-breaker or you can figure out how to navigate around the capital issue.  All the great entrepreneurs have not let the lack of capital get in the way of them executing on an awesome opportunity.  And you don’t have to start big.  Think of how much that plasma or LCD cost when you bought it 5 years ago and look at the prices now, the same is true with most billboards.  You can start with some of the smaller sizes that most mom and pop shops own anyway. 

Someone Please Get’er Done!
This is an opportunity that I desperately want to pursue, but I’ve been unable to dedicate the time required to execute.  But if I did have the time, here’s what I’d do:

• Do all the necessary research (here are several good links I’ve gathered).  I’ve also got some really good domain names for digital signage as well!

www.popai.com

www.digitalsignageforum.com

www.aka.tv

www.dynamicsignage.org

www.electronicdisplaycentral.com

www.digitalsignageweekly.com

www.mediavillage.com

www.signindustry.com

www.automatedbuildings.com

• Obtain a list of all billboard owners, ferret out the mom & pop shops and partner with them to expand, enhance their revenue stream.  Nothing against the old guard, but many of them probably aren’t interested, don’t have the knowledge base or the appetite to start over.

• Find a rich cousin, uncle, friend or put together a business plan and find an investor .  (Make sure you look at my pitch series if you plan on trying to raise money).   Get buy-in on the opportunity, create a three-way partnership with the current billboard owner and off you go.  This will work because the billboard industry is very fragmented across the country.  While the big boys own a lot of the inner city large billboards, a lot of the smaller billboards are still independently owned.

Additionally, depending on where you live, your city may not have moved in this direction (I can think of a few cities that are slow to react to this opportunity), there may be an opportunity to install and manage this revenue stream for the applicable city agency (bus, train, airport, sports facilities, etc).

And If You’re REALLY Serious
Ping me, I can give you a few leads to investors that may be interested in the digital advertising space and connect you to a education institution in Houston that is looking to install digital signage on campus.  No guarantees on either front, but you put together a solid business plan or at least demonstrate that you’ve done your home work – I’ll hand over a few good contacts!
 
Good Luck and if this one isn’t for you, I’ve got a good high-tech opportunity with a much lower cost entry point coming soon!  Enjoy!