Recipes for business success #1 — Observe and predict market needs
Posted on 21.12.2020 at 12:48
By Denis Kalemberg, CEO
As the well-known saying goes, any business is solving other people’s problems for money. Looking at it that way, an obvious conclusion stands out: the conditions for successful development or emergence rarely arise during calm and stable times. Economic turbulence, crises — that’s what drives new businesses. You can, of course, start up or run a successful business even in periods of stability, and there are plenty of textbook examples that prove it, but it’s in times of crisis that people are likely to face more problems. And it’s in times of crisis that entrepreneurs uncover opportunities to solve these problems and make a profit. So, how do you make that happen?
A business trend is a solution to a problem most people have
In times of crisis, many people have to adapt to changing work and life conditions, and cope with new problems and needs. This is where entrepreneurs are presented with more opportunities to develop their businesses. The first companies to identify these new common problems and offer their solutions manage to not only stay afloat, but even surge ahead as market leaders. This is why we think of crises not as bad times for business, but as times of new opportunities. If you, as a proactive business owner, notice and keep track of problems that people have, and can offer your own solution quickly, there’s a good chance your business will succeed and make money.
Of course, we assume that you monitor the problems that affect a large number of people even in peaceful times. These problems may not be as critical or related to worsening conditions; instead, they’ll focus on improving or predictably and orderly changing them. Nonetheless, they’ll still be the types of problems you can solve for money. For example, the advent and widespread use of smartphones and mobile internet have certainly made life easier for many users. Unfortunately, a mobile device’s battery runs out faster than we’d like it to, presenting us a new challenge: how do we provide users with the opportunity to charge their device in a timely manner? In response, several companies offered a new service: battery rental stations in public places. The company that was the first to come up with a solution to this problem gained a temporary competitive edge, until others followed in their footsteps.
Thus, one of the recipes for business success is to observe people and try to predict the potential problems the next wave of changes will bring them! A business trend is a new way to relieve a pain point most people have. Even stable times, when life becomes easier, present new problems that can and should be addressed, no matter how minor they may be. Just listen to the people around you and think about the concerns they articulate. Remember to ask clarifying questions! Try to imagine what challenges all of us may face in the near future due to changing conditions. This is exactly what helps predict and set business trends.
Creating a business trend — our experience
To illustrate how you could set a new business trend, let’s take our company as an example. How did our business get started? How does this universal rule of trend analysis and anticipation apply to the real world?
Example #1. At one information security event, three speakers from the banking industry mentioned the same problem within a single day: anti-theft technologies for RBS customers on the market can no longer help them. They talked about how the attack vector was changing and predicted a storm of fraud in the immediate future. I am very lucky that I listened to the reports carefully that day, and so I combined these forecasts in my head. That same day, we came up with a concept of a technology that protects customers from new attacks. Six months later, we already had sample devices ready. Eighteen months later, our solution prevented several dozens of millions of rubles from being stolen from a bank’s customers. This was the solution that kick-started our business ten years ago.
Example #2. Seven years ago, we had a conversation with a representative of a large bank. At that time, their costs for sending SMS codes to customers had skyrocketed, making this method of transaction confirmation both expensive and unsafe. They suggested that it would be great if they could confirm transactions via a mobile app. In this case, we analyzed the information and designed a new solution that soon became the main driver of our business. Yes, we then had to modify and develop it further. But the key point is that we created our new solutions and new business based on our analysis of customer needs that were not yet obvious, when there were no similar products on the market. This gave us time to become the de facto industry standard before competitors even appeared on the horizon.
Of course, predicting business trends is a highly complex task, and requires a considerable amount of knowledge, experience, and taking various factors into account. Your gut feeling or a potential customer’s thoughts alone may not be enough. Often, you’ll need to conduct in-depth and comprehensive market research. Many consulting companies offer such analytics for multiple countries today. We encourage you to pay attention to this kind of information — it can hide many potential opportunities. Given the market or markets your business operates in, you need to take industry trends, as well as country- and market-specific factors into account.
Every day we either face new challenges ourselves or hear about other people’s problems. When you present a new solution to the market, make it a habit to think about whether it solves a widespread problem. If so, you can predict a trend and build a new business based on it. If your decision-making is also backed by strong experts and consultants with analytics, the odds that your project will hit the bull’s eye will be even higher.