I was talking with a friend about my plan to invest in developing WordPress plugins as products recently.
“That’s a tough market,” he said, “Everything has been built. Customers don’t want to pay anything. You make $100 a year off a plugin and still have to support it.”
We built a WordPress plugin four or five years ago and the market was saturated then. Because of the scope of functionality, it was a pain to support and actually cost us to maintain it.
Natural opportunities that are inherently accessible and rewarding don’t seem to exist anymore.
What I’m striving to learn is how to identify hidden opportunities.
The Storied Opportunity
Arcadia was a utopian region in Greek mythology where man lived in idyllic harmony with nature. It was the home of Pan, a cloven hoofed trickster god associated with spring and fertility.
In my experience, opportunity has been an Arcadian myth.
The entrepreneur Derek Sivers started his business CD Baby by “scratching your own itch.” He created CD’s for his band, and then his friends’ bands, and then the market’s bands.
Sivers recommends to only start a business when people are asking you to. The market is literally pulling the business out of you, like the spontaneous germination of product/market fit. Success comes down to a matter of execution.
This is the way business is “supposed” to be.
Siver’s logic is sound and his point of being customer oriented is well made.
But I’ve never experienced anything like that and don’t personally know any entrepreneurs who have.
For my generation, natural business opportunities are as idealized as Arcadia. And Pan’s choices in creating these sorts of businesses is beyond us mere mortals.
Seeing Opportunities Requires New Eyes
The reality facing most entrepreneurs is that:
- The market already has what it needs.
- Customers are rarely accessible. And very few customers are walking around with “aspirin” level pain looking for help.
- In any market, there’s already a market leader. And probably several solid competitors.
If we accept that, is it time to pack it in and get a job?
No, but it does mean we have to play a different game than the blue ocean strategy that was a natural fit of the digital gold rush up to 2010.
Because this is also true:
- The market’s needs are not being 100% met. Markets operate at levels of efficiency.
- There are more tools and tactics to get at customer needs than ever before.
- Markets are dynamic. Competition only matters to the extent that the incumbents can stay on top of the evolving trends. And right now markets shift faster than any point in history.
How To Approach Opportunities Differently
I haven’t cracked open the project book for whatever WordPress solution we’re going to build yet.
But here’s what I’m looking for:
- High value problems.
- Limited cost to develop a version 1 product.
- Limited cost to support.
- We have advantages that competitors don’t.
- The napkin math works for possible customers & pricing.
Additionally, there are a couple of other attributes that I’m seeking out that have to do with never losing- but that’s the subject for another post.
The above attributes are sort of a “no duh” wishlist. Easy money.
I’m probably not going to find an opportunity that meets these requirements at the first blush.
I’m overlaying another rubric that matches the realities of post gold rush opportunities:
- The incumbents are nearly homogeneous in benefits or positioning. Creating inroads in inefficient markets.
- There’s enough customer data to make a case that existing solutions aren’t fully serving customers.
- Coming trends are challenging for incumbents to meet. Past success poses future obstacles.
Business is inherently messy.
I know what I’m looking for as I begin this search for product opportunities and I will probably find 2 or 3 products that meet these requirements. Sort of.
What I end up with will likely be a bastardization- a half man, half goat compromise opportunity.
It’s good to have an understanding of the ideal process, the ideal situation. To anchor your method too. To establish goals and constraints.
But entrepreneurial skill is all about working with what is.
For most of us, Arcadia is actually a region you create and rarely a place you discover.
Thomas Cole’s The Arcadian or Pastoral State, 1834, Used as part of the Public Domain