Transcript

POLLY CORFIELD

Welcome to this podcast. My name is Polly Corfield, and I’m one of the Careers Consultants at the Open University. I’ve got Liz moody here with me today to talk about how to come up with a good idea for a business.

Liz, would you like to introduce yourself.

LIZ MOODY

Yes. Thanks, Polly. My name is Liz Moody, and I am a Senior Lecturer and the Director of Executive Education in the Faculty of Business and Law at the Open University.

So I work with many businesses and employers. But prior to that, I lived and worked in Edinburgh. I had my own business. It was a small business. And I used to work and support start-ups and entrepreneurs and growing businesses.

POLLY CORFIELD

Fantastic. What a range of experience. OK. So let’s start off with the term innovation. How would you define innovation in a business context?

LIZ MOODY

Well, there are many cleverer people than me that have come up with formal definitions to that. So maybe I’ll start by sharing one that I quite like from the Statistical Office of European Communities. It’s from 2005, but I think it stands the test of time. And what they see is that an innovation is the implementation of a new or significantly improved product, good or service, or process, or new marketing method, or a new organisational method in business practices, workplace organisation, or external relations.

Now that sounds complicated but the reason I like it is because what it tells you is that you can actually innovate in any part of your business model. And I think that’s an important thing for people to remember.

A simpler one, which I probably prefer, is, it’s a creative idea that’s been brought to application. That’s the key really because ideas remain only that unless you have a way to implement them.

POLLY CORFIELD

That gives us a great idea of what innovation is. So what businesses do you think are innovative?

LIZ MOODY

Well, I think most people think of innovation as being new to the world products or inventions, but actually I think there are many different ways to look at that. And some of them, like Uber for example, or Deliveroo, or Airbnb, they’ve kind of come in to genuinely disrupt existing markets, like transport, eating out, and accommodation. And these are all platform-based ones so they’re clever. And they’ve been driven by what’s been called the sharing economy.

And I think from the customer perspective, these have brought lots of benefits of convenience, safety, cost reduction, as well as ways to supplement income. So in that respect, they’ve definitely been innovative. And you could criticise them for other things. So people also look at whether or not as employers and employee rights, there are some question marks over that.

I think you have winners and losers and those businesses. And undoubtedly, they are innovative, whatever else you want to judge them by.

There’s also many other tech companies that have been operating in the financial services sector, the so-called fintech businesses. And they’ve also changed how people think about their own savings and investments. And even if they’ve not completely disrupted that marketplace yet, they have actually forced the banks and the insurance companies to look at innovation of their own products and services, and of the customer experience. So I like and I’m very interested in those and have done a fair amount of research into that, in fact.

But there are loads of apps that are supporting learning, health and wellbeing, using the principles of behavioral economics to nudge people and educate them towards better work-life balance, beg your pardon. And those are ones that I particularly like.

But there are lots of other businesses, Polly, that are not based on technology. And I’m always in awe of those that are clever engineering ideas and the design companies that invent clever new things, like meat replacements or 3D printers and those kind of things, they are fantastic.

POLLY CORFIELD

Yeah. They would be the things that I tend to think of when I think of innovation. But it’s really interesting to hear you point out the slight changes that businesses have made. OK. So do you think new business needs to be innovative to be successful?

LIZ MOODY

Well, yes and no. To be successful you can have many starting points. So for example, if you’re studying and you have specialist skills in the marketplace, you can have a successful business based on your own specialist skills.

If you want to grow a bigger business than that, you’re probably going to have to own some kind of assets so owning something that other people will hire or use or need from you, so actually people who have 3D printers are making businesses because they own an asset that other people can’t afford or don’t have enough regular use and to make it worthwhile buying these things. So owning plants has always been a useful way of being a successful business.

But there are other things like doing things that other people won’t or can’t or don’t have time to do. People make great businesses out of cleaning, those kind of things, plumbing. Maybe if people don’t like to do these things, but these people are in hot demand so you can be very successful if you have certain skills and things that you’re prepared to do and work hard at.

But, when it comes back to innovation to your point about innovation, and I think it certainly helps just thinking of the first definition of innovating in the business model. I think it definitely helps to have something that differentiates you in a good way from your competitors.

So I think there’s room for businesses who provide great customer service for physical business things like being in the right location, good staff and service, getting pricing right. But most importantly, really understanding the customer needs and how vital it is to address those.

So I think you can be successful doing the same as other people but doing it better. And that’s maybe where the innovation can come in in other parts of the business model.

POLLY CORFIELD

Brilliant. So lots of different ways to add innovation to your business idea. There are going to be some students listening to this recording who know that they want to set up a business but they don’t know what they want to do yet, how would you recommend that they consider their options?

LIZ MOODY

Well, there are a number of free courses, free OpenLearn courses predominantly, but also OpenLearn create courses. And I think you’ll provide some links to those after the podcast.

POLLY CORFIELD

Yes, I will.

LIZ MOODY

But also, there are a ton of articles out there and information around for anyone who wants to sort of plan a new business. At the OU, we actually produced a short course on entrepreneurship, which is called Entrepreneurship from Ideas to Reality, so that’s an OpenLearn one.

And that’s quite a good place to start because it provides helpful information about how to generate ideas and then filter them. So filter out the ideas that aren’t really going to work, how to evaluate them, as well as information and tips and how you can actually start your business. Where you can get some help and advice, including the important sort of professional advice for finance and legal matters.

So the nice thing about that course is it features real entrepreneurs and some who are former OU students, which might make people feel that they’re in good company there. If they’re thinking of starting their own business, it’s been done before.

POLLY CORFIELD

Yeah. And there will be some OU alumni on this forum in different places talking about their businesses too. Now, you’ve started to answer this question already, but as well as students who want to figure out what they want to do for their business, there are some students who will have an idea but don’t know whether it’s worth pursuing, what suggestions do you have for sounding out an idea before they start putting energy into it?

LIZ MOODY

Well, we definitely did look at that part of this, sort of the whole business idea thing, because we felt it was important to look at the whole journey because actually most businesses start out with an idea that’s completely different by the end of the process. So that’s really the whole point of it. So it’s great to have an idea and it’s actually almost as equally important to sort of evaluate and decide against running with it, because you can sink a lot of time, energy, emotion, and money into ideas that won’t pan out.

But in terms of what’s in the course, actually, there are some useful techniques, including understanding who your customers are, understanding their particular needs and their wants, and that’s a vital starting point for anything, understanding who you may be competing against because if you don’t have any competitors, it might be for good reason, that it’s not a great idea, or it might be that you’re competing against people that you’re going to be unlikely to succeed against because they have much more money or much more footfall in if it’s a physical business.

So understanding who you’re competing against is really important as well. But every step along the way, there’s techniques like design thinking, conducting some research, doing the research, having the opportunity to refine your ideas because, as I’ve said, so often the idea you start out with will be refined and turn out very different to the one you started out with. So there are lots of examples of that in the course.

POLLY CORFIELD

Brilliant. So that sounds incredibly helpful. Some businesses, not every business, but some businesses might need to find out about patenting an idea. At what stage should they find out about this?

LIZ MOODY

Well, in some ways there’s no point that’s too early to think about patenting. I mean, if you have a genuine invention, a product, maybe I mentioned this sort of engineering products, or a design, something physical and tangible, a prototype of something, then I think it’s never too early to seek out professional legal advice about whether a patent is required, because what you’re protecting is your intellectual property.

And in doing that prevents someone else from stealing it. I mean, there are examples of that in the course of people who have taken their ideas and those ideas have been taken up by competitors.

But I think what I will say is, it’s really important for anyone who’s currently working with an employer, if their idea is based on something that your employer does or you’re using your employer’s time to work on your business idea, you should really just check on the terms of your employment, just to make sure that your employer doesn’t own ideas or inventions you come up with.

So actually, in the Open University, when we write course materials, although I might write the course, the intellectual property belongs to the Open University. And if you’re working for a software company and you write a piece of software, it might actually be in the terms and conditions of your contract that the company owns any output from you. So you should just check on that and be careful.

If you’re working on ideas under the radar on their time and using their resources, you could really create some problems for yourselves. So it is worth checking also on the sort of rights and permissions. If it’s a software project, if you’re using open-source software, and that’s part of your business idea, it’s worth having something like a non-disclosure or confidentiality agreement to allow you to have some conversations with other experts and advisors.

So really, I think the watchword is, think about it earlier rather than regret it later.

POLLY CORFIELD

OK. That’s some really interesting advice there. Thank you. So what sort of support do you recommend people get in place if they’re going to take a business plan forward?

LIZ MOODY

Well, there are a surprising number of places to get support, and much of it is free. Although you can, some of it is under goodwill, thinking of people like family and friends. So you can go too far with goodwill and rely on it too much.

But in terms of the infrastructure for small businesses and growing businesses, then most areas will have a local chamber of commerce, for example, or a local enterprise partnership, or a council that supports new businesses and startup businesses. So you can get quite a lot of support from networking events or to meet new customers or to meet suppliers or possible partners, or employees even. So they will facilitate that kind of meeting and getting into the local area if it’s a local business that you have.

They’ll also introduce you to friendly professional services, like lawyers and accountants. They’re happy to work with startup businesses. Banks will often, and large legal firms will also put on events because they’re hoping that they will either find investors for or a new client, so they will support small businesses and startups. And they’ll have people in making presentations, talking about things like IP, I’ve been to these, talking about IP and patents and copywriting, talking about business funding, talking about how to pitch to investors. So you can get a lot of help in your local area if you go via your sort of local enterprise partnership or the equivalent and other nations than England.

There’s lots of places to go and how to go about starting your business, and it’s really important not only to think of professional advice but also to think of support in terms of the emotional advice.

So family, partners, and friends, if they’re on board with you, you will find yourself relying on them just to test ideas. But also you have to, we talk about this actually in the OpenLearn course. We talk about how it’s important to really figure out the impact of you pursuing your business idea, especially if you have family responsibilities because there might be money involved in this, funding involved with it. If you’re looking for start up funds, you might look to family and friends first.

But I think it’s really important to set some kind of boundaries around these things. So the emotional support is invaluable because you get lots of knock backs, lots of rejection when you’re starting out with your ideas. And that’s what helps to shape and hone them. And so the emotional support is really, really important.

And then great to have people to celebrate with when you have success because all of these things keep you going, it can be a lonely journey if you’re working on your own, starting out in a new business.

So you do need their support. You need people that believe in you and can tell you that you’re not a bad person just because somebody didn’t like your product. So the support network is family, friends, but also getting into that local business community. And also that professional advice network is quite important too.

POLLY CORFIELD

Fantastic. That is incredibly rich advice there. Thank you very much for that. We will place some links for local support on one of the threads, so have a look through. Right. I just want to say, thank you very much for joining us today.

LIZ MOODY

Thank you. I really enjoyed it. Good luck, everyone, with your ideas.