Multiply your creative advantage 10x with idea arbitrage
Foresee valuable opportunities your peers aren’t even aware of
One popular myth about creativity is that an idea must be totally new to the world to have any value. Actually, this is very rare. Many of history’s most valuable ideas have been the result of adapting existing ideas from another field or combining existing ideas in unique ways — a technique called idea arbitrage.
When you use it to look at the world around you with fresh eyes, you can potentially unleash tremendous value.
1+1 can equal 10. 100. Or even 1 million.
What is idea arbitrage?
Arbitrage is defined as buying some thing a lower price and then re-selling it at a higher price. For years, people have purchased collectibles at rummage sales and then re-sold them in online market places like eBay.
Arbitrage is also a common concept in the world of finance, where savvy investors simultaneously buy undervalued assets and then resells them at a higher price in a different marketplace.
Idea arbitrage can be even more powerful. Ideas have immense power to transform our lives and our world.
Think I’m exaggerating? Then consider this: Nearly everything around you started out as an idea in someone’s head. Also, adapting and combining ideas is a proven technique that’s been used by many of the world’s greatest inventors.
The fact that most people undervalue ideas is something you can use to your advantage. With the mindset I’m about to teach you, you’ll be able to see opportunities most people aren’t even aware of!
3 types of idea arbitrage you can leverage
When it comes to idea arbitrage, there are three distinct types:
Adapting idea from one industry or profession to another: This is a very common route for new ideas to enter the world. Frequently, startup company founders take an idea from their previous employer and improve it in some way, for example.
Roll-on deodorant was inspired by another application of using a ball to distribute liquid — the ubiquitous ballpoint pen.
Combining two seemingly unrelated concepts into something totally new and valuable: The most well-known example of this is the smartphone, of course. It combines a telephone, a music player, a clock and alarm system, and dozens of other applications, depending upon which apps you customize it with.
Each of these consumer devices existed on their own. But true magic happened when Steve Jobs of Apple envisioned combining them into a simple, elegant handheld device called the iPhone.
Improving an existing idea: Whether you develop a new idea on your own or uncover an existing one for which you see greater potential, it helps to have a systematic approach to idea improvement. One powerful, flexible way to do this is a creativity technique called SCAMPER.
Its name is a mnemonic for Substitute, Combine, Adapt, Modify/Magnify/Minify, Put to other uses, Eliminate and Reverse/Rearrange. It forces you to look at your ideas from seven unique perspectives.
Check out the ultimate SCAMPER mind map, which contains over 200 keyword prompts.
Where can you find ideas to adapt?
By constantly being on the lookout for old ideas in new places, you’ll be amazed at how many opportunities you will discover. Where should you hunt for them? Here are some suggestions from lateral thinking expert Paul Sloane:
- Deliberately gather inputs from unrelated settings.
- Take time out to discuss your problem with people from entirely different backgrounds. If you are a businessman then ask a teacher or a priest or a musician. Cultivate wildly diverse inputs. You never know where the seed of an amazing idea may come from.
- Read a different magazine, visit a different environment, see a foreign movie, drive a new route home, find some new inspiration in a different source.
- Place yourself in a different environment and it will help you see concepts and ideas you can adapt. If you visit an Eskimo in his igloo, like Clarence Birdseye did, you may come back with an idea as good as the one that built the frozen food industry.
- Identify analogous situations in other fields and ask how they would be handled in your profession.
If you don’t consider yourself to be creative, idea arbitrage is a great place to start. Free yourself from the pressure of having to come up with a totally novel idea. Instead, look for existing ideas from other professions, industries or contexts that you can use to solve your current challenge. Seek unique combinations of existing ideas, products or services that could elegantly meet the needs of the people you serve.
If you’re already somewhat creative, idea arbitrage is a powerful set of strategies you can add to your arsenal of creative problem-solving tools.
Finally, try using tools to help you uncover new possibilities and combinations. Mind mapping software, note-taking tools and visual whiteboards can help you to capture, organize and reorganize information in creative ways to uncover intriguing new combinations and possibilities.
Happy idea hunting!
This article is excerpted from the CATALYST newsletter. It provides shortcuts to better thinking and bigger results for entrepreneurs and creators in a concise biweekly digest.