Successful businesses solve problems. That’s how they earn a profit. They create value by solving the problem and people pay them for their service. Too many people think profit is a bad thing, but it’s actually a necessary part of the whole process. Just like you can never make “too much money”, a business can never have too much profit. This whole application of “fairness” to things like salaries and profits is messy and qualitative.
Sometimes people tell me they are fresh out of ideas for a new business. Well, start thinking about the biggest problems in the world and maybe you will find a business around one of them.
Steve Burrill spoke at a conference I was at. Here are his five biggest problems in the world that need to be solved.
1. Clean Water
3. Food Security
4. Food Production
5. Healthcare and healthcare reform
Demographics are driving these trends. The world population is expanding, but it’s also growing older as well. Advances in medicine have allowed us to live longer. 75% of the cost of medicine goes to treat chronic illness. That’s not a small number.
Obamacare failed miserably at healthcare reform, and it needs to be repealed. It didn’t do anything to counteract the supply of medicine. All it did was move, and steepen the demand curve. Instead of causing prices to go down, they are going to ramp up even more rapidly. No question we need to repeal it and start over.
However, even with a really crappy government program in place, there is still opportunity in health care to make some money. It’s not a secret everything is going mobile. Digital technology plays in health care will be huge. Rethinking the simple footprint of a hospital and how we interact with, monitor and care for patients is much different in a mobile, virtual environment than the old style way of care. Already, they have developed an app that can turn an iPhone into an EKG machine. The consumer digital health space is huge.
New economies of scale and scope can be created through the application and development of new technology. Think different isn’t just an ad term. It’s something you have to do to redefine business spaces. The big market opportunities of the last ten years weren’t even envisioned by the so called future thinkers ten years ago. In 2000, was anyone thinking about stuff like Groupon, Facebook, Zynga? Were they conceiving what you could do with an iPhone?
Think about trying to envision what the market might look like in 2021.
As you develop your business, know a few things that will certainly happen to you. Technology is tough. Even though you immerse yourself in a tech business, there are still people issues. Burn rates are also critical to your success, so keep your cash burn rate as low as you can. Cash is king.
Here are some other things to think about when setting up your business to attack the future.
1. Stars lose and teams win
2. Have an understanding of the marketplace you want to play in, the supply and demand effects
3. Barriers to entry can be technology, but don’t let Intellectual Property patents stop you. They can usually be engineered around. Similarly, don’t rely on IP to protect you.
4. Financing is a strategy, and it can dictate your business strategy
5. Tactics and execution are more important than your overall strategy. Other people are as smart as you and might have the same idea-out execute them.
6. Be virtual. Virtual companies can scale. A lot of people all over the world have the same needs. We are humans, and even though there are cultural differences they matter little when it comes to basic human conditions.
When you solve problems, you make money. But when you solve problems you feel good about yourself and you have fun. That’s what business is about.