Successful business ideas are always the simplest ones

If I were to be given the chance to invest in a business that offers up something completely radical but also very risky or just starting something with a more conventional, tested business model, I would go with the simpler and more conventional business every time. And while successful business ideas have also sprung from radical ideas, the tried and tested offer better returns and are generally more successful. The problem is perhaps not even one of complexity or simplicity. The problem is all about knowledge. Businesses fail a lot because of a lack of capital, but they also fail because of a lack of knowledge. That cannot be underestimated in the slightest.

The knowledge of how to respond to business challenges and how to run your business is vital, and it is perhaps the most potent weapon in your arsenal. Knowledge is critical, and it is often the difference between failure and success. Ask any armed forces unit and they will tell you their operations depend entirely upon their intelligence gathering teams. That’s the power of knowledge. That is just one part of the equation though. One of the single largest mistakes many new businesses make is to try and conduct business based on their understanding of what they think people should buy as opposed to what people really want to buy. This gap in perception or understanding is one that proves insurmountable for many businesses.

Think of it this way. If I were to open a shoe retail business, there are so many less variables to contend with. It’s simply a question of shoe sizes and shoe styles. Plus, because the population will keep on growing people will need footwear at all times. And people will always own multiple pairs of shoes. Look at yourself for the ultimate proof of this, dear reader. You don’t own just one pair of footwear, do you? As opposed to this, some new product that is radical and completely untested has a very large gray area. How is it meant to be used? What sort of target audience are we looking at? What sort of a retail ecosystem can we create for it? How do you up-sell customers? What supporting products or services can be sold with it? There’s just so much that is unknown. Heck, it took a long time for Zuckerberg to fully understand Facebook’s potential. And now he’s at a point where he’s raking in the giant bucks.

Simplicity is a good thing when it comes to business models and successful business ideas. The most successful business ideas that I have heard of describe the concept in one sentence, a short one. Think of Google. They simply organize the world’s information. Facebook’s is to connect people. Apple’s is to use technology to improve our lives. Don’t be blown away by market potential or feel everyone will need it/buy it. And don’t be stumped if no one is buying or using your product/service later on. That’s just how the market operates, so make sure you identify your market and user and know them through and through before launching your own business. There is no fail-safe formula, but perhaps the best thing you can do is to do the same old things in a new way. That will always keep customers hooked at all times.