Are you challenging Lucrative Business Assumptions?

All businesses have multiple assumptions embedded in the way they operate. You can get a wind of these assumptions in their processes, the customers they serve, their pricing, their distribution model, how they make use of available resources, their decision making related to the near term and long term future etc.

Some of these assumptions may be so fundamental that it is easy to take them for granted and mistake them to be laws that you cannot defy. Let us call these assumptions basic assumptions. But both incumbent businesses and new entrants who seek to disrupt businesses must remember this:
1. These assumptions have a context. These assumptions are mostly present because of constraints of a previous technology which are not broken yet. Some assumptions may also be present because of things like culture and social norms or say Government regulations which may not have changed yet.
2. These assumptions can be challenged, most commonly through technology

I wrote a post on how technology challenges some very basic assumptions through what I call fundamental distortions of technology.

There are some basic assumptions what I like to call as Lucrative Assumptions. They are assumptions which are so hard to challenge that when challenged, successfully yield mega businesses.

These are some top of my mind lucrative assumptions which when challenged can yield the next big blockbuster (I have sworn not to use the word ‘unicorn’) startups:

7 Lucrative Assumptions List

Peter Thiel in his advice to entrepreneurs often tells them to ‘build companies that nobody is building’. It can also be framed as ‘what entrenched basic lucrative assumption are you challenging that nobody else is challenging’.

I can go on about lucrative assumptions in other areas as well. Each of the above assumptions are taken for granted, very basic and very hard to challenge and the average startup does not take up the challenge. A hard problem and hard solution. Precisely why startups challenging Lucrative Assumptions like the above are worth investing from an investor point of view. (Hope Indian VCs fund business models that challenge such assumptions and not the 100th hyperlocal startup or 50th personal assistant startup or whatever the fad is.)

It is also an interest and fun activity to try to understand which technology or a combination of technologies is most likely to challenge these assumptions the best.

 

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