Editor’s note: This article was first published in July 2015; its description of iTunes as the service that rescued record-label income and of Netflix as the likely solution for the film industry reflects the market at the time. Streaming has since replaced download sales.
When I write an article about business ideas, I always insist that you use your capacity for innovation. Some people will say that selling baby food is not profitable, and then a company like Big Dipper comes along and shows you how to bill millions in that business. An idea is not good or bad; what is good or bad is your ability to adapt it, and the execution.
There are personal trainers and etiquette teachers who cannot make a living from their profession, while others bill more than 4,000 euros a month. Is the idea bad? Perhaps a little complicated.
There are writers who sell more than a million copies, while others lose time and money, and they are the ones who say people don’t buy books anymore. Sorry, but people are simply more selective about the books they buy now.
Sometimes, though, you have to break with ingrained thinking and start thinking differently. Whatever business you decide to start, forget about your product or service for a moment. Focus on the underlying need. Let me explain.
When I say in a talk that the service Google offers existed even before the internet, many people are aghast or think I have lost my marbles. But… of course it existed. It was called a library.
If we had asked a librarian how to improve that service and make more money from supplying information, he would have come up with a whole series of business ideas only to conclude that there was no way to turn it into a big business. But a few people who came from the sciences rather than the humanities did not think like librarians. They thought like scientific minds, using the means within their reach (the internet and millions of websites full of information), entering a sector that was not profitable (internet search engines), and they made Google one of the most profitable companies in history.
The same thing happened when someone invented the light bulb (let’s call him Thomas Edison). If we look at the user’s underlying need, the need for light, his was not a new business idea.
Candles already existed, so for a candle maker, innovating meant making them burn less and building surfaces that kept the flame inside. But someone did not think like a candle maker, and the light bulb appeared.
And I could go on with every invention that comes from an underlying need, even the telephone, which was an innovation on the original idea of smoke signals, carrier pigeons, the post or Morse code.
Ideas are not profitable; you either are or are not profitable as an entrepreneur and a thinker.
Every idea we have presented in these articles was based on at least one entrepreneur who built a profitable business with it. So, however absurd it may seem, someone found a way to make large sums of money with it.
Is there anything more absurd than selling T-shirts with a simple “life is good” message? Well, two entrepreneurs ended up billing more than 100 million dollars with that absurd idea. There is a whole series of absurd ideas that have made it clear that with creativity you can achieve anything, even in a heavily exploited market.
(See: 4 business ideas worth 100 million dollars. Who would have thought?)
That is why, when some smart-aleck critic says “those ideas are crap” or “lots of entrepreneurs in my neighbourhood have gone under with the ideas you write about”, a phrase comes to mind: “Intelligence is a cycle: once you get too clever, you start becoming stupid again.”
The fact that one restaurant, or 100 restaurants, closed does not mean that restaurants are not profitable, and the more creativity you put into a restaurant, the better.
See also: Conditioning ourselves for success or failure: learned helplessness and the Pygmalion effect (video)
Recently, after a poorly worded sentence of my own in an article about business ideas, we had a small run-in with some Spanish musicians. They were right in their criticism (we won’t deny our share of the blame), but after talking at more length with some of them, I could see that they still have a distorted way of thinking, quite apart from what the argument was about, in which I make it clear that of course a musician should be paid for their work. That little stumble did me good.
It made me think about a few points. Are you a musician out of passion, treating it as a hobby, or do you want to make a living from music?
If you treat music as a hobby, perfect: keep thinking about music.
But if you want to make a living from music, we are talking about business, not music. Then marketing, synergies, creativity to make money, image, even sales and negotiation all come into play, as well as creating parallel products. Yes, you need an entrepreneurial mind.
When the music industry was going into decline because new technologies encouraged illegal downloads, it was Steve Jobs (Apple) who brought the record companies together. They were very reluctant to go along with his idea at first, but in the end Jobs’s creation, iTunes, and other similar services are what, to some extent, saved the record labels’ income and gave singers some economic breathing room.
In other words, to some extent many singers and bands have been saved by an application from a company that was not in the music business, because Jobs did not think like a musician but like a businessman.
And for the film industry, the solution will probably come from companies like Netflix.
And the same happens in every profession.
Having a band and buying a guitar and a drum kit does not make you a good musician or guarantee success, in the same way that buying a pair of boxing gloves does not make me a professional boxer.
It does not matter what you do. The world is changing, and so is the way business is done. 80% of bands will never be able to make a living from music, because we are not talking about music but about business. And if from now on you want to survive as a musician, you cannot afford to think like a musician; you will have to start thinking like an entrepreneur. One thing I am sure of is that many good musicians will fail while many bad musicians will succeed. Why? Because in business, as we know, not everything depends on the quality of the product, but on all the work that goes into presenting it and creating a perception of it in the user’s mind.
Could many of these bands start thinking about ways to build businesses alongside their passion, businesses that promote their music at the same time, or where their music promotes the sale of those other products? I would venture to say yes. It is a matter of putting the “mental box” to work.
And I will finish with the words an old mentor once said to me.
Any business is profitable if you know how to adapt it and focus it properly. But not every product is profitable. When your passion does not give you enough money to live on, it is not a business, it is a hobby. When your hobby gives you enough money to live on, it becomes a business, although the money does not always come directly from your hobby. It often comes from other products or services associated with your passion, and those are what make the business profitable and let you keep devoting yourself to your passion.
See also: You don’t need an original business idea to succeed
Featured image: Sugeesh, CC0 1.0, via Wikimedia Commons.
