Turning Excess Supply into a Business


It’s been a while since I last wrote a post. Meanwhile, my daughter who was a week old when I wrote my first post and was a tiny creature will be turning one tomorrow and has become a havoc wreaking human being.

Today I wanted to talk about finding business opportunities. No, I’ve never started a company and am yet to make my millions, but there are certain ways to look at the world to find your chance. Entrepreneurs don’t necessary start their businesses through these perspectives but not everyone is über passionate about that one thing in life either. I believe passion is necessary for an entrepreneur to succeed, but that passion does not have to be the subject of your business. There are successful people who own waste management companies, who may not be passionate about garbage.

Anyways, Excess Supply is today’s theme. If you look at some successful companies, they leverage existing assets that are underutilized.

For example:

  • Say I own a vacation home in Hawaii I use 3 months a year (25% utilization), there is Homeaway or Airbnb.
  • If I’m traveling, my car will be sitting in an airport parking lot for the next week, costing me money. Well there is FlightCar.
  • Speaking of cars, why own a car when you won’t drive it more than 2 hours a day? Zipcar.
  • What if I’m a bike messenger and I’m not always busy during the day? Postmates.
  • I run a website with a bunch of remnant inventory. That’s where DSP/SSP/RTB comes in.
  • You get the point.

    The good thing about excess supply is that it’s sunk cost for the owner. If I’ve already bought a car and it’s going to sit at the airport parking lot, I might as well rent it because making a couple of extra bucks is better than paying for a week parking. And “might as well” comes cheap. Why are listings on Airbnb cheaper than hotel rooms despite being bigger with wifi and a fully functioning kitchen? Because the renter is visiting friends in Boston for a week but she still owes the full month rent, so she might as well rent it for cheap than not rent it at all. The renter is better off, the visitor is better off saving money on hotels, and there is still money left for Airbnb to be in business.

    Every asset not utilized is an opportunity. Every parked car is underutilized. Every empty space (office buildings are completely empty at night and a lot of homes are empty during the day…). Restaurant kitchens in closed hours (maybe you can rent them to run your business from 2am?). Food delivery guys in non-peak hours (what else can they deliver?). If you go to the movies on a weekday morning, there are 3 people in a theater that sits 200, can’t they rent the space out to someone?

    Next time you walk around town, look for these underutilized assets because there maybe a business opportunity there. And any of the owners will gladly let you utilize the assets because, hey, they might as well.


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