There are two primary approaches to identifying a business opportunity.
- Identify a market need, then develop the technology or plan necessary to fill the need (”Problem Looking for Solution”).
- Invent a new technology or business method, then identify a market with the need (”Solution Looking for a Problem”).
Important aspects of identifying an opportunity include:
- Identifying pain-What is not currently possible that people would give you money to make possible? What is currently hard, inconvenient, or expensive to do?
- Knowing your strengths-What do you know and what areas would benefit from that knowledge?
- Good situational awareness-What is the state of the art? Who is already working in this area? Who has previously worked in this area? Who could potentially enter into this area? What has been tried? What has worked? What has failed? Why?
- Understanding potential customers-Who can benefit from your effort? What characteristics do they have? Where are they located?
A great way to find opportunities is to search through the SBIR Grant Solicitations of different branches of the government (such as DARPA, NASA, DoD, DoE, EPA, Department of Education, NSF, etc.) Also, talking to people in industry and academia who work in the areas you are interested in pursuing will help you to identify places where innovation is needed.
When it comes to space business opportunities, there are three categories of ideas, which come about most frequently:
1) An effort that addresses a specific need for which there is an already-existing market (for example, faster radiation-hard processors for satellites, civilian GPS, etc.)
2) An effort which desires to create a capability in the medium-term which pushes the boundary of what is currently done and requires significant but potentially attainable start-up capital (for example, sub-orbital space tourism, optical point-to-point high bandwidth data links between satellites)
3) An effort which desires to create a capability which is perhaps technologically possible but considerably outside the scope of what has been previously demonstrated to be feasibly executable and/or requires extremely large investments of start-up capital (for example, space-based solar energy power beaming, starting a Martian colony, building a space elevator)
Efforts of the first type are well-suited for investment from individual private investors (”angel investors”) and venture capitalists, and from the standpoint of a new entrepreneur most likely to succeed. Examples of this kind of effort include Payload Systems, DirecTV, and Google Earth.
Efforts of the second type are significantly more challenging, requiring an extremely wealthy benefactor acting as a long-term investor or philanthropist in order to get going and an experienced CEO who can execute the vision of the effort competently. These types of efforts require a solid team with a good sense of business know-how, creativity, strong technical competence, and a lot of persistence. Examples of this kind of effort include Virgin Galactic and Rocketplane.
Efforts of the third type are not well-suited for practical investment due to the length of time required to enact them and the amount of investment required to make any significant progress. The time scale of these efforts also falls outside of the scope of a business plan, which covers periods of time from one to five years in the future. Efforts such as these should be broken down/scaled down into business opportunities of the first type which can serve known market needs and have the potential for return on investment within five years, or be tabled for the future when the prospect isn’t as far out.
In all of these cases, it can be quite capital intensive to even enter into the space industry. So look for terrestrial applications! The oil industry, the airline industry, scientific laboratories, and the military often need high-tech solutions, which are also suited for space. Leverage these unmet needs to help raise revenue and make your target space effort happen!
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