How to find business ideas: look for the asymmetry
So far the blog posts have appeared to seem randomly focused on a London square and Hyde Park horses, but they've been pointing to a wider theme - one that I believe is central to a good business. That theme is: asymmetry of information.
Tourists suffer when visiting London because they don't have as much knowledge about the place as a local - and so (in my eyes) have a poorer experience. There's an asymmetry of information that exists.
And, to those looking to start a business, that asymmetry should be most interesting place to be. Anyone looking to start a business should, therefore, ask themselves: what don't I know, and what do other people not know? And what can I make happen in that gap?
You see this play out in financial markets all the time, that is essence of trading - good traders understand that profit often hinges on access to better, faster, or deeper information. Put crudely traders ask: what do I know that no-one else does and how can I leverage that for profit? Quantitative hedge funds like Renaissance Technologies do this - identifying patterns in massive datasets that others don’t notice or cannot access and monetising that knowledge to great effect.
The same dynamic applies to coming up with business ideas - there are three spaces where you really win, where the ability to identify and address asymmetry creates opportunity:
- Consumer Needs That Aren’t Obvious
The value of a business like this comes from solving the asymmetry of awareness — helping people realise and access a solution to a problem they didn’t even know they had. This is the hardest one, you're essentially creating a new market in the space where the asymmetry existed.
To play in this space, think about the unmet or unspoken needs of consumers. What are people struggling with that they might not even realise? What things do people take for granted or assume will never change that could be mixed up? A great example here is Air B'n'B - prior to their launch, house sitting or house swapping was a fairly niche pursuit done by overly trusting eccentrics. Who would have thought the monopoly of hotels could ever be challenged?
- Information That’s Hard to Access or Understand
The value of a business like this comes from solving the asymmetry of access. Some of the best business ideas can come from making something complex or inaccessible, simple and available.
To play in this space, think about the barriers that prevent people from accessing or understanding valuable information. Can you simplify a process, make data more transparent, or provide insights that others overlook? What do people really care about, but struggle to know about? It doesn't have to be just 'I'll create a directory of healthcare providers in a local area because people care about their health'. That is pretty generic, and you don't just need to focus on technology solutions. For example, asymmetry of information means you can offer amazing running camps in Morocco, to people who are passionate about travel and running, but wouldn't know where to begin organising a trip like that.
- Inefficiencies in Existing Systems
The value of a business like this comes from solving the asymmetry of efficiency — streamlining outdated systems to make them faster, simpler, and more effective.
To play in this space, look for processes or systems that are outdated, slow, or clunky. The inefficiency itself is a sign of asymmetry — a gap between what’s happening and what could happen. Is there a process at work that people always complain about doing? Is there something you dread doing because it takes you ages? What can you learn that can make that process easier and monetise by offering to make it easier for others.
Bonus 4th one: you can combine all three into one - creating a business that gives greater access, at greater speed, to consumers for something they didn't even know they wanted or needed.
The beauty of addressing asymmetry is that it inherently sets you apart. If you know something your competitors don’t — or can solve a problem they haven’t thought of — you’ve already carved out your niche.
For those looking for a magic money tree, there isn't one. But if you start with identifying where asymmetry exists, move on to thinking about how you can close that gap, and finally how you can create value in the process you will be well on the way to creating a money making machine.