Two routes to a new business idea: original or adapted
Definition
Original idea: a product or service that has not been offered before, so the business is first into the market.
Adapting an existing idea: taking a product, service or business model that already works and changing it for a different customer, place, price or purpose.
- Edexcel splits new business ideas into two routes: they are either original or adapted from something that already exists.
- An original idea means nobody is selling it yet, so the entrepreneur has no rival and no proof that anyone will buy.
- With no competitor, the business can set its own price and build the brand customers think of first.
- With no proof of demand, market research is guesswork and the money spent developing the product may never come back.
- Adapting an existing idea starts from something customers already buy, and changes one part of it.
- A new customer group: gym clothing sold to serious young lifters rather than to general sportswear shoppers.
- A new price point: budget gyms stripped out the pool, the sauna and the staffed reception to sell membership for around £20 a month.
- A new place: a street-food dish that sells well in London is brought to a market town that has nothing like it.
- A new feature: the same coffee shop menu with oat milk as standard and an app that stores your loyalty stamps.
- Two ideas joined: a barber shop that also sells coffee, so one visit meets two wants.
- Most UK start-ups adapt rather than invent, because an adapted idea is cheaper to launch and the demand for it has already been proved by someone else.
- Improving something that already exists is called innovation, and it is how most successful firms began, so an adapted idea is not a second-best version of an original one.
Example
- Ben Francis started Gymshark in 2012, screen-printing gym wear in a garage in Birmingham.
- Gym clothing was not an original idea, since Nike and Adidas had sold it for decades.
- What he adapted was the fit, the customer and the way it was sold: tighter cuts aimed at young weight trainers, sold online through fitness influencers rather than through sports shops.
- Because the product already had proven demand, he did not have to persuade anyone that gym clothing was worth buying, only that his version fitted them better.
Where an idea to adapt comes from
- Ideas rarely arrive from nowhere, and most come from a market the entrepreneur already knows well.
- Working in a trade, or following a hobby, shows you what customers complain about and what the existing firms do badly.
- A gap left by rivals, or a product that already sells well in another town or country, gives something that can be copied and changed for local customers.
- Buying a franchise is another way in that uses someone else's proven idea, and it is examined as a type of ownership in 1.4.1.
Common Mistake
- Do not treat "original" as meaning "good" and "adapted" as meaning "lazy".
- An adapted idea is the safer commercial choice for most start-ups, and examiners reward you for saying why.
Judging the two routes: which suits this entrepreneur
- An original idea offers no direct rivals and more pricing freedom, but development costs are higher and demand is unproven.
- An adapted idea starts from proven demand and usually costs less to launch, but established rivals mean the business must differentiate or compete on price.
- The better route depends on the entrepreneur's savings, access to finance and how quickly the business needs the idea to start paying.
- Overall, an entrepreneur with limited savings and no track record is usually safer adapting a proven idea, while someone able to absorb greater risk may prefer the higher potential reward of an original idea.
Exam technique
- When a question asks whether an idea is original or adapted, say which and then say what has been changed.
- Naming the change is what turns a bare statement into a linked point.
- The mark most often dropped here is proof of demand, since that is the real advantage of adapting and the real weakness of an original idea.
- On a justify question, tie your conclusion to the entrepreneur's finances rather than to which idea sounds more exciting.
Self review
- What are the two routes by which new business ideas come about?
- Give one reason an adapted idea is cheaper to launch than an original one.
- Give three things an entrepreneur can change when adapting an existing idea.
- Why is it easier to get a bank loan for an adapted idea than an original one?
- Name one drawback of launching an original idea.
