Research shows a sizable percentage of startups are founded by end-users who first discovered how to meet a need or solve a problem and then decided to start a business.
In a classic example of the chicken or the egg, most aspiring entrepreneurs who ask me for advice lead with the same premise. “I want to start a business,” they write, “but I’m struggling to find a great idea.”
Yet research shows a significant percentage of startup founders are accidental entrepreneurs, end-users who wind up turning their innovations into a business.
For example, one study found that over 40 percent of the key innovations in windsurfing, skateboarding, and snowboarding were commercialized by end-users. Other studies found the same is true (although in different proportions) for industries like automobiles, mountain bikes, and even rodeo kayaking (a sport I didn’t know existed.)
This study found that in a sample of nearly 300 companies in the juvenile products industry — a $20-plus billion dollar market — 84 percent were founded by end-user entrepreneurs.
More famously, there’s Richard Branson; starting an airline wasn’t on his radar until he found himself in Puerto Rico waiting to board a flight to the British Virgin Islands. The flight got canceled, so the 28-year-old Branson rented a plane, wrote, “One way to the Virgin Islands: $39” on a blackboard, walked around the airport, and managed to fill the plane.
When the flight landed, a passenger said, “Sharpen up the service a bit and you can be in the airline business.” The next day, Branson scraped up enough money to buy a used 747 — and Virgin Airlines was born. He started with the desire to innovate, not the desire to start a business.
The business followed the idea.
The same is true for Phil Baechler, a fitness enthusiast who tried to push his infant son in a baby carriage while jogging. Conventional strollers couldn’t take the abuse — nor could his baby take the bumps in the road — so he designed a stroller that wound up launching the jogging stroller category.
Why is accidental entrepreneurship more prevalent in some industries than others? According to the researchers:
… we argue that user entrepreneurship is more likely in industries where use provides enjoyment as opposed to purely economic benefits; where users have relatively low opportunity costs; where there is high variety in demand, and hence many small-scale niche market segments; and where markets are nascent, in the midst of high turbulence, and characterized by uncertain, ambiguous, and evolving demand conditions.
Starting a business because you see an economic opportunity, like investing in rental properties? That’s one path. Starting a business because you feel you can leverage efficiency and productivity to become the low-cost provider? That’s another path.
Starting a business because, as an end-user, you found a way to improve or solve a problem with a product or service? That’s the “accidental” path.
And for some, may be the best path. People smart enough to find a better way clearly bring a breadth and depth of knowledge that helps offset a lack of business knowledge. (I can be great at running a business, but if I can’t develop a new solution or new use… I won’t have a business to run.)
If you want to start a business but are struggling to come up with an idea, take a step back. Don’t think, “What kind of business should I start?” Don’t focus on trends or emerging industries. Don’t search for what may be hot or trendy.
Go back to what you know: products you often use, or services you often rely upon.
Then think about what a particular product or service doesn’t do well, or doesn’t do at all. Think about a need it doesn’t meet or a problem it doesn’t solve.
In all likelihood, other end users have the same needs, or experience the same issues.
Figure out how to meet that need or solve that problem… and you just might have a business.
“Accidentally.”
