How to identify a business opportunity [A useful framework from The Opportunity Lenses]

Identifying new business opportunities is critical to any company. A business opportunity is at the core of any business model.

In this article, I have the pleasure to interview Guerric de Ternay who will tell us more about how to identify new business opportunities.

I already invited Guerric in FourWeekMBA to talk about hacking value proposition design.

Guerric runs innovation projects at ?What If!, a global consultancy part of Accenture. And he is the author of two books about strategic innovation.

I wanted to have Guerric back to talk about his latest book: The Opportunity Lenses.

Enjoy the interview! 

Last time we spoke, you had just published The Value Mix. Why did you want to write another book?

The business world gained a lot from frameworks such as the lean startup and customer development. But I felt that we were missing tools that could help us identify what opportunities we should pursue.

Indeed, the lean startup assumes that you already have an idea for your business. What happens if you don’t? 

I still remember meeting with Eric Ries a few years ago. Eric was doing a book tour in London. I asked him: “Eric, the principle of build-test-learn is so helpful. But what can you do if you don’t have an idea yet?” Eric simply said that you first need to find an idea. While he had popularised a terrific innovation framework to the world, he didn’t really have an answer to that question.

This moment stuck with me. 

The business world now knows how to iterate and improve ideas to get to product-market fit. But how do we find this business opportunity that we want to go after?

My answer to this is The Opportunity Lenses.

So, what can we do to get better at finding opportunities?

First, it is a mindset to adopt. You must be constantly searching for opportunities. Be curious. Observe what’s happening in the market and how things are changing. The more you open your eyes, the better you’ll get at identifying opportunities.

Second, you must acknowledge that there are a lot of bad opportunities. A LOT! 

It’s okay to find opportunities that will lead you nowhere. Sometimes, it’s because there’s not enough market momentum. Sometimes, it’s because there’s already a big competitor. Sometimes, it’s because it’s not possible to make it profitable.

Just keep going! 

The more you’re attuned to spotting opportunities, the more likely you’ll find your next big opportunity.

Do you have any tools to help identify those business opportunities?

I do! Actually, The Opportunity Lenses is packed with tools. It’s what pushed me to pick the book title. “Lenses” refers to all the different tools that are presented in the book.

One of the things I recommend is to take the long view and observe the big macro trends that are shaping our world. What are their implications? How are they changing our lives?

For example, we’ve seen the ongoing growth of the creator economy. There are several macro trends that are pushing it. Among them: Direct access to an audience via social media, the willingness of people to be more independent in their work, and the improvement of technology to create high-quality media. It creates many opportunities to cater for the growing group of creators. There are so many angles to do this: content creation, monetisation, accounting, or admin support.

Here’s another example: We know that people are becoming more health conscious. They have better access to general health recommendations. Wearables (such as glucose monitors) give real-time feedback on how our nutrition affects our body. What could you do here? It could be worth exploring no-sugar alternatives, supplements and fortified food, or veggie-based meals.

As you progress on the path of identifying business opportunities, you may want to zoom in. You could look at a specific part of the population. How do these changes affect parents and how they feed their kids? What about people who do outdoor sports? Or people are constantly on the go?

There are so many trends out there, is there a way to make sense of them?

I use a tool that I called STEER. By breaking down the macro-trends into 5 different buckets, you can understand more easily what is causing an opportunity to emerge and creating momentum for it. 

The acronym STEER stands for Socio-cultural, Technological, Economic, Environmental, and Reglementary. These five categories are the main long-term drivers of opportunities.

As we’ve seen in the previous examples, new technologies can trigger new opportunities. As wearables become more popular, it’s likely that we’ll see new businesses emerging from that. Not only hardware businesses, but also insurances, doctor’s practices, coaching services, and software companies.

Socio-cultural trends are also very powerful. The fact that we are becoming more health conscious creates massive shifts in the consumer goods industry. New healthy brands are emerging every day, and the incumbents are also pivoting towards healthier products. Look at PepsiCo divesting Tropicana (the widely known orange juice brand) to focus on water and zero-calorie beverages. They understand the shift.

There are many ways to identify new business opportunities. A good start is to look at macro-trends through the lens of the STEER framework.

You’ve published two books. Do you have any advice for our readers who would like to write a business book?

Writing a book must be treated like designing any product. First, you should make sure that there’s an opportunity here. Why does it make sense to write a book about topic X ou Y? 

Here’s an example: Rob Fitzpatrick who wrote The Mom Test had spotted a great opportunity. The customer development approach pioneered by Steve Blank was gaining a lot of traction among tech entrepreneurs. But there wasn’t a clear guide to tell you how to approach interviewing your customers. The Mom Test filled this gap successfully.

You need to make sure that your book is useful. What does that mean? Be clear on the outcome that the reader expects when they pick up your book. If they buy a book about making sushi, the outcome they expect is a great sushi night that they host. On top of sharing sushi recipes, could you also give advice on how to host your friends and eat sushi in a real Japanese way?

Business books are the same. They must deliver an outcome to their readers.

In my case, I wanted to help my readers to identify business opportunities, so they can start their own company with strong foundations. The book is also useful for people who work in a company to help them think about new opportunities for that company.

On top of that, I realised that a lot of consultants read business books to learn new tools and frameworks that they can reuse with their clients. With The Opportunity Lenses, I want innovation consultants to be better equipped to give clearer recommendations to their clients. 

The business book industry is highly competitive. There are so many books that are being published every year. But if you’re very precise on what outcome your audience is hoping for, and if you have a useful solution for them, you can make it a big success.

Final thoughts?

If you know someone who’s considering starting a business or who has recently started one, suggest having a look at The Opportunity Lenses. 

They’ll be grateful for your recommendation. 😉

Read Next: Hacking Value Proposition Design