Nick Powills: To Find the Next Great Concept, Don’t Judge All Books by the Same Cover

As soon as you create a category called “book,” you immediately start aggregating perceptions based on that category.

Thus, in the category of “business opportunities,” oftentimes sales, marketing and execution all get lumped together—yet all have very specific characteristics that separate the modeling based on historical and current data points.

For instance, take investment. If you were to break investment groups into three categories of less than $100,000; $100,001–$250,000; and $250,001 above—each would come with different sets of rules. Those who could gain financing for the under $100,000 category may not qualify for financial support when buying the next level up—based on liquidity and net worth. Thus, if we were to look at all investment data lumped together as reality, the cost to market to prospects in each category would be vastly different, yet grouped in this scenario. 

For buyers, it’s important to know: Just because brands align in a category doesn’t mean each brand is created equally. Category doesn’t equal complete similarity. The best buyers have said they look at several things after picking a category—depth of leadership; depth of product; depth of investment; depth of territory availability; and depth of validation. Each of those categories creates similarities, yet against brands outside of that lone category. 

The book is much deeper than the cover or the category. This is why due diligence is so vital in today’s world. Cutting the deck and then cutting it again sets you up for the best shot at uncovering the right opportunity that aligns with your DNA and your business depth.

To find the next great concept, you have a few options:

1. Go with the good ‘ol standard. If 1% of brands reach 100 units and 1% of those reach 250, then unicorns are not created every day. Thus, if you can find the right ‘in’ with a business opportunity that is proven, that pathway creates limited risk. Likely, you will have to compromise on territory, but be comforted by the fact that corporate support and study is great. On the reverse, however, make sure you believe in the vision of the leaders—as another brand will eventually get Blockbuster-ed.

2. Go with an emerging brand that has a fire brewing. The cash flow is typically not as great and the expertise of the executive team is a work in progress, but you will have a voice and likely have the opportunity to scale your business. Scaling your business is the best way to make game-changing money.

3. Go with a start-up, but definitely get a great look at culture and points of differentiation. Brands are created daily. Thus, you have to look into the sustainability and projections of the brand. Be careful with newly created categories. Be careful with the depth and values of those creating it.

Want to find the next great brand? You will have to take risks. When taking risks, don’t talk yourself out of a good opportunity just because it doesn’t align perfectly with competition. Find the gaps and feel comfortable with the possibility that those are opportunities.