"Where do great ideas for startups come from?" is a common question I'm asked.
My response then starts a long list because I've found ideas pop up from the most unexpected places.
Today I'll give you one example: how a dad's children's latest fad led him to do his startup.
Here is the story as cited in the report about Cheong Chonon Ng in the Wall Street Journal. He is the founder of three-year-old Rainbow Loom—a rubber-band jewelry-making kit that is a blockbuster seller this fall.
- Mr. Ng, who emigrated to the U.S. from Malaysia in 1991 lives in a Detroit suburb.
THE BEGINNING: OPPORTUNITY + PROBLEM
- He came up with the idea for Rainbow Loom in 2010 after struggling to join his daughters, now ages 12 and 15, in making bracelets out of tiny rubber bands. His fingers were too big to stitch the colorful elastic bands together so he found a small, wooden scrub board in his basement and added rows of pushpins to it.
THE SOLUTION + IMPROVEMENTS
- Using dental hooks to stretch and link the rubber bands together, he discovered that he could create all sorts of geometric patterns, which impressed his kids. He later cut up old credit cards into small, C-shaped pieces to make clips that could securely fasten the ends of the rubber bands.
BOOSTING UNFAIR ADVANTAGE: PATENT PROTECTION
- Mr. Ng, who emigrated to the U.S. from Malaysia in 1991 and lives in a Detroit suburb, applied for a patent on the Rainbow Loom kit, including its C-clip, in 2010. In November 2012 he quit his day job at Nissan Motor Co. where he worked as a crash-test engineer, to focus on building Rainbow Loom. The U.S. Patent and Trademark Office officially granted him a patent in July.
DEFENSIVE REACTION: CHANGE STRATEGY
- Having established the position as Market Leader, Ng shifted his strategy from Flanking (into an uncontested new market) to Defending. He began a program to enforce his patent by suing competitors with me-too products (see my prior blog, Tuesday, September 17).
FAD OR ON-GOING BUSINESS?
- The jury is out on the patent action and the media has focused on the issue "Is this a short-lived fad or a new market?"
Eleven-year-old twins Gwen and Phoebe Child of Yardley, Pa., got into weaving rubber-band bracelets last spring after seeing their classmates take up the craft.
"Pretty much everybody in our grade was wearing about 20 of them up to
their elbows," says Gwen, adding that she and her sister aren't sure which
loom product their classmates used and they "don't really care."
Retailers don't seem picky about the brand either. "It's about who can get it to you fast enough," said a spokeswoman for Berlin, N.J.-retail chain A.C. Moore.
"It's selling like gangbusters," says Andrej Suskavcevic, president and CEO of the Craft & Hobby Association in Elmwood Park, N.J.
BOTTOM LINE: This startup began with a Dad observing his children. That's pretty simple. Perhaps that can be your starting point. Note how Ng then experimented with solutions to the first problem he encountered. That lead to the first innovation. More was done and then a product emerged. Sales began, a patent came (3 years to be granted) and now national headlines are in the media. That's a real startup success. Sure, it may be a fad, but nonetheless it is a charming and educational example of where real statup ideas can come from. It is also a fine example of how to add elements to build an unfair advantage, and how delicate a startup's strength can be. I am cheering for Ng, and for you. So give yourself some time to pause and think about a fresh idea. Perhaps it cal lead to a great startup for you. Ask you kids for some suggestions.
I wish you The Best on your Adventure!