Econ and business majors

[Brian23]

From my understanding of the free market economy, when there is an oportunity to make money, someone will step in and do the work to make a profit. However, sometimes it's hard to tell if such an oportunity exists.

For example, before cable, TV was transmitted via airwaves. Someone came up with the idea of putting up a bunch of directional antennas and recieving many channels and rebroadcasting it over a wire to subscribers for a fee. Since there was a demand, the idea succeeded. However, the person who thought the idea up may have thought that perhaps it was a bad idea and no-one would subscribe. For business idea ventures where the demand is unknown, how does one decide if the apparent cash on the table is actually there or not?

 

[AgaBoogaBoo]

You don't always know for sure and just have to do things on your own or with someone else who sees there is a potential.

 

[Epic Fail]

that's why businesses fail all the times, they don't.

 

[tfcmasta97]

thats why its all a big risky thing to invest. business is just about calculating risk and reward factors and ratios, and taking the risks you are willing to.

 

[Brian23]

People come up with ideas every day. How does one know which are stupid and which are worth pursuing?

 

[AgaBoogaBoo]

Originally posted by: yamadakun
that's why businesses fail all the times, they don't.

You know that the statistic that says 9/10 business fail isn't entirely true? I'll have to dig up one of my business management books, but basically lots of them are sold, put under a different name, etc. and there is actually a very high percentage of businesses that are around for 10 years or more.

Just looked it up:

D&B found that 69.7 percent were still in business ten years later. D&B also discovered that the problem with most reports on business failure is that they don't define failure properly.

 

[Orsorum]

Any new idea is a gamble, but if you're confident that your idea has a buyer and will produce value for that buyer, you'll do it.

And like everyone else has said, there are literally thousands of examples of ideas that didn't succeed. Or, as AgaBoogaBoo mentioned, they'll be bought out by a larger company or undergo some other transformation.

I'd be interested in seeing the development process at a company like Xerox or IBM in the 70s and early 80s, what a time that would be!

 

[AgaBoogaBoo]

Originally posted by: Brian23
People come up with ideas every day. How does one know which are stupid and which are worth pursuing?

The first few steps might include figuring out how much investment is required in terms of capital and effort. In some cases you can dedicate yourself on the side to developing something and then once you have something to present you can get investors, partners, etc.