Using the News to Spot Innovative Business Ideas
Million-dollar innovative business ideas
may be lurking in your nearest newspaper… When you read the news, do you make a quick judgment in your head (“Ha! That will never work!”), or do you consider what innovative business ideas you can glean from it?
Most people tend to make snap judgments about breaking business news. One of the most famous examples of this in the tech industry was Slashdot’s coverage of the original iPod release in 2001. The snap judgment? “No wireless. Less space than a nomad. Lame.”
While it can be entertaining to make these snap judgments, it’s not really effective in helping you grow your business exponentially.
How One Article Can Show You Many New Business Ideas
Wired recently posted an article about a new type of content company. By reading with an eye toward creating or growing your own business, you can glean all sorts of insights…
In the article, we are introduced to Demand Media. Demand is paying video producers a few dollars to create short videos on thousands of subjects, ranging from “What is the best vodka?” to “How to pack for a trip to Spain.” The subject of each video is determined by an algorithm that figures out not only what people are searching for on Google, but also the highest amount that advertisers are willing to pay for Google ads next to the video.
Demand Media’s goal is to get their videos to the top of the Google search results and place pay-per-click ads next to them. The idea is that someone will watch the video, and a fraction of those people will click on the ads. The algorithm shows that some ads pay up to $20 per click (!), so it’s in Demand Media’s interest to pay, say, $20 one time for a video producer to produce that video.
Demand Media has a goal of producing up to 1 million of these videos a month. And its most recent round of capital values the company at a cool $1 billion.
Instead of judging Demand’s business model, let’s take a look at what trends it could represent. Here are some angles I gleaned from reading this story:
- The old way of editors choosing the content to write about is dying. Google and its database are the new editors.
- Short and cheap is better than longer and higher-quality…at least if your goal is to make money fast.
- Being the expert is free, being the producer pays decently well…but being the aggregator of the content is the billion-dollar idea.
One $1B Company Means One Million $1M Opportunities
Whenever I read about a billion-dollar company, I know that there are a million opportunities for million-dollar companies in the same industry. Here are some million-dollar innovative business ideas that you could start in this industry:
- Build your own algorithm so others can compete with Demand, and license it to other content companies.
- Create your own videos on the subjects Demand does, except have them be longer, more in-depth and higher-quality…and charge a fee for access to each of them. (This is the Wal-Mart vs. specialty store approach.)
- Become your own content aggregator in a specific niche and hire people to do videos based on similar algorithms, with the intent of selling your company to Demand or someone who wants to compete with them.
- Create specific videos in a niche where information products abound, and instead of gaining a couple cents a click for Google ads, sell those information products as an affiliate and rake in larger sales per video.
Notice that some of these ideas compete with Demand, and some of them go so far as to have you seeking to be acquired by Demand in a year or two. But all of them have one thing in common: you’re picking a small piece of what Demand does and creating a business out of it, instead of trying to go after the whole enchilada. That’s the key to competing with a billion-dollar company if you don’t have millions of dollars to blow.
Use the News To Help You Determine Your Next Steps
As an entrepreneur, anything you read about current trends, especially if it involves a hot and fast-growing company, could be profitable for you. When you read articles like this, focus on what that article is telling you about the future.
Regardless of what you think of cheaply-produced, short videos in the results of certain Google search terms, the fact is that they make a lot of money. How can you use this to help your business, or to start a new business?
I welcome your own innovative business ideas in the comments.
Recommended Reading:
- Why Entrepreneurs Fail (Will You Avoid These Three Traps?) Once you have an idea, avoiding these three traps will help you succeed with it.
- How I Turned My Mediocre Website Into A Million-Dollar Business. My company had one of the worst websites ever (we even won a contest for one of the worst hosting company websites!), but I still managed to create a million-dollar business. How did I do it?
- You Are Worth More Than You Think: Overcoming The Key Reason Entrepreneurs Fail. If you have ever said, “I just don’t have enough time to do [an activity I love]”, this advice is for you.
