How aspiring entrepreneurs can explore COSTAR
IN the vast landscape of commerce, where dreams meet reality, there exists an electrifying spark that ignites the journey from aspiration to achievement. At the heart of every enterprise, amidst the flurry of plans and projections, lies the nucleus of innovation—the business idea. The idea usually comes after a thorough examination or scrutiny to establish market feasibility and economic viability. It is that idea that passes scrutiny that captures the entrepreneurial opportunity. Once the idea passes all tests, it becomes a golden opportunity for entrepreneurs.
It is, however, sad that year after year, a plethora of businesses burst into existence, yet only a fraction manages to weather the storm. Amankwah-Amoah and Wang (2019) highlighted in their article, ‘Business Failures around the World: Emerging Trends and New Research Agenda”, published in the Journal of Business Research, that in recent times, many organisations around the globe have ceased operation, often attributed to weak financial position, mismanagement and intense global market competition.
As an entrepreneur, I have learned firsthand that the path to business success is riddled with challenges and complexities. While selecting a promising business idea is crucial, it is merely the beginning of a much larger journey. The real test lies in executing the idea with precision and foresight, ensuring that every step is meticulously planned. Understanding the pitfalls that lead to failure is essential, as is embracing strategies to fortify the foundation of every enterprise. There are various ways to make sure that businesses survive the competition.
One of the keys to long-term success lies in the development of a robust business model, which serves as the foundation for sustainable competitive advantages. A business model captures the purpose of the new venture, provides a blueprint for pursuing it, and describes how, for whom, and with whom value is created (Stähler, 2018, p. 223).
The journey from a fledgling idea to a successful business requires more than just ambition; it demands strategic thinking and a well-structured approach. The COSTAR framework is one of the many invaluable tools that can be used not only as a guide for developing robust business models, but also as a compass for navigating towards sustainable success.
Each letter in COSTAR represents a fundamental element of a thriving business idea: Customer, Opportunity, Solution, Team, Advantage and Result (Müller et al., 2016).
Understanding the customer is the cornerstone of any successful business. The ‘C’ in COSTAR prompts entrepreneurs to delve deep into the demographics, interests, and needs of their target audience. By comprehensively profiling their customers, founders can tailor their solutions to meet specific requirements, ensuring that the product or service resonates with its intended market. For example, a tech start-up developing a new mobile app for fitness enthusiasts will need to identify specific demographics, such as busy professionals looking for convenient workout solutions, and tailor their product accordingly.
Identifying and seizing market opportunities is a pivotal step in entrepreneurial success. The ‘O’ in COSTAR directs founders to explore the market landscape, assessing its size, relevant trends, emerging technologies, and potential for growth. Armed with this knowledge, entrepreneurs can position their ventures strategically, capitalising on market shifts and staying ahead of the curve. A food delivery service, after identifying a growing demand for healthy meal options among urban consumers, can seize the opportunity to develop a specialised meal delivery service, targeting health-conscious individuals.
The heart of any business lies in its solutions. The S in COSTAR compels entrepreneurs to precisely define what their product or service looks like. How does it address customer needs? How does it exploit the identified market opportunities? By elucidating these aspects, entrepreneurs can create a solution that not only meets customer expectations, but also aligns with the identified market gaps.
The ‘T’ in COSTAR emphasises the importance of assembling a capable and complementary team. Identifying the skills, expertise and roles needed for success ensures that the venture has the right talent in place to navigate challenges, innovate and execute the business model effectively.
In a competitive market, standing out is imperative. The ‘A’ in COSTAR prompts entrepreneurs to assess the advantages their venture holds over other options. What
makes the solution unique? What competitive edge does it bring to the table? By identifying and leveraging these advantages, entrepreneurs can carve a distinct space for their ventures in the market. A fashion startup, for instance, might use the framework to differentiate itself by offering sustainablysourced materials, ethical manufacturing practices and customisable design options that set it apart from traditional fast-fashion brands.
The ultimate goal of any business venture is success in the market. The ‘R’ in COSTAR pushes entrepreneurs to articulate the expected results. What does market success look like? By defining key performance indicators and setting benchmarks, founders can measure their progress, make informed decisions, and steer their ventures towards the desired outcome.
By systematically applying the COSTAR framework, entrepreneurs can enhance their decision-making process, mitigate risks, and increase the likelihood of building sustainable and successful businesses. Founders can navigate the complex seas of entrepreneurship with clarity and purpose by addressing the core elements of Customer, Opportunity, Solution, Team, Advantage and Result.