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.
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12. November 2009 at 1:09 pm
Interesting. I’m going to have to modify one aspect of my current business model.
If fact checking pays $1, facts are worthless.
(Until somebody gets killed.)
That Professional Engineering license is looking better and better…
The Wired article is my hint to take the rest of the day off.
Ciao.
12. November 2009 at 1:39 pm
Most of the ideas that I glean from newsletter articles and blogs are ways to improve the established system or how to include the improvements into different aspects of my life. The hard part is making those abstract ideas into applicable actions.
Oh, and that PE license sounds pretty good too.
12. November 2009 at 2:36 pm
Excellent analysis and article, Erica, thanks!
12. November 2009 at 3:09 pm
Great post, Erica, too often we hear of something big like this and think, gee I wish that was my idea… Funny, i’ve been looking at their site with an eye to writing for them!
12. November 2009 at 3:48 pm
Great post! I really like your blog and the fact that I actually feel like I learn something useful every time I read it!
12. November 2009 at 3:56 pm
With digital camcorders selling for less than 50 bucks now, I can see myself producing content and sponsoring underemployed friends to do the same. Thanks for the nudge Erica!
12. November 2009 at 3:57 pm
That is a crazy business model. So many opportunities out there. Thank you for sharing.
12. November 2009 at 6:22 pm
That’s a funny comment about the PE license. I’ve had one for many years, but my area of practice doesn’t care about licensure.
I don’t get that $1 fact checking.
12. November 2009 at 8:57 pm
hey !!!!
got to know about you through ramit sethi’s website.
your ideas are really stimulating…
keep the good work going
13. November 2009 at 6:39 am
This is a brilliant article. So many people pay attention to what’s going on yet never step up and decide to do something. Looking at trends, seeing what you can monetize, putting your unique spin on something, getting in the door to working with large solid companies, and so many more ideas came just from reading this article. Thank you!
13. November 2009 at 6:40 am
Great post! I have never thought you can discover business opportunities from reading a news article. Nice tips!
13. November 2009 at 11:58 am
Erica-
You are speaking my language!
I know the founder of Demand and am hugely intrigued by the business model they are building around user generated content…
Getting ideas from the newspaper has been an inside method used by professional in the entertainment industry (Writers, Producers) for years.
As well, I have been gleaning ideas from everything (Newspaper, magazines, radio, TV, web, conversations and real life events) for years, as well. Each day, a new potential business idea. The issue becomes not enough time and/or resources to allocate to explore every idea or possible business opportunity.
To address the dilemma (Too many ideas, too little time), I am convinced that following would be fantastic solutions:
A) Business Idea Engine. An intelligent online application needs to be developed to determine (Based on statistical comparison pulled from various real time data sources) whether or not an idea is economically viable, ratio of success, competitive landscape, start-up capital required, identify potential start up capital sources, best markets, suggested products and/or services, marketing strategy to implement, people required, and projected hypothetical revenue of said business idea. You simply enter your thoughts into the ‘Engine’ and the research report is compiled and ready for analysis.
B) Rent-A-Research Group. A website that allows you to create Your Own Personal Research Group that one could rent on an as needed basis. You simply select from a panel of experts according to your subject, upload your notes/business idea and they (The experts you assigned to your project) provide extensive research – same as mentioned above in ‘A’. You pay a flat fee for the comprehensive analysis and recommendations, and if you require additional information, you may pay an hourly rate.
The group can also provide personalized Business Plans for your ideas based on the research and even submit the plan to a group of VC’s, Angels and financiers (That you also select according to your subject or idea) – so you do not have to spend time on the paper work of starting a new business.
C) Rent-A-Team. One more step further, it would be great to hire a team of ‘Jump Start’ professionals that can completely implement and take your business idea to market (Similar to an incubator, but more advanced).
Same as in ‘B’ above, the pros can research, write the plan, secure financing, file legal paperwork, establish relationships for you with suppliers, vendors, partners, if needed set-up your office (Lease the space, phone systems, computers), develop your marketing and sales materials, hire people if required, and even get your first customers – this would be great for busy Entrepreneurs who have business ideas, just not the time to create, start and manage them.
Last idea, perhaps maybe there should be a tag labeled, “Ideas” where you can file these away for quick reference.
Thanks for the brilliant discussion!
13. November 2009 at 5:28 pm
I’ve read this post 3 times now, and I think I’ve finally got it. This is FASCINATING stuff Erica. Thank you so much!
13. November 2009 at 11:20 pm
Here’s a little nugget bloggers can take away from the article, probably information some of your readers already know and capitalize on:
“The second algorithm also looks at how well past titles with similar words have performed in terms of ad revenue. Demand has learned, for instance, that “best” and “how to” bring in traffic or high clickthrough rates”
13. November 2009 at 11:33 pm
This is an Excellent analysis and article. You can get an advance ideas related to your business, working with big companies, and so many more ideas came from reading this article.
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16. November 2009 at 3:15 am
Just what others are saying: interesting post, Erica!
21. November 2009 at 8:38 pm
Thanks Erica. I too am getting out my video camera and recorder right now.
19. December 2009 at 4:50 am
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19. December 2009 at 5:01 am
Hi, Erica. I am back to say that I managed to download your free e-book.
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19. December 2009 at 5:04 am
Hi Erica. I am back to say that I managed to download your free e-book.
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