Hobby
Based on interest in an area that borders on or is "love," a Hobby is a high Core Competence activity. Innovation levels for hobbies vary depending upon the individual and the hobby.
Because of the uniqueness of each individual, Scarcity and Appropriability are virtually non-existent and Uncertainty and Ambiguity are low.
But a Hobby is NOT a business because there is no Product Market Match, Net Buyer Benefit, Margin, Volume, Frequency, Long-term Need, or BUSINESS Resources.
Figure 1: "B/K" Diagram
ADVICE:
To convert a Hobby into a venture, the 1st three sub-questions need to be addressed. In other words, the BUSINESS aspects of the activity must be the focus.
Start with Net Buyer Benefit and Product Market Match. If there is a market, then you can start to focus on the cost/volume/profit calculation. Once these are attended to, you can then work on the "Persistence" items of Frequency, Long-term Need, and ongoing Resources.
Figure 2: Target "Bulls-eye" Diagram
Venture Example:
This case was prepared by Team Lynx as an entrepreneurship project at the University of Victoria. It is designed to illustrate the venture archetypes used in the New Venture Template through story and case description. Though the case is based on a true story and actual businesses, its name and likeness has been altered. The case is quite brief, so you should be able to read it quickly
John Marshall was lying on the beach, quenching his thirst with a cool drink while flipping through the pages of his favorite magazine - 'Red Pipers & Radio Controllers.' John was emphatic about radio controlled aircraft and had always pondered the idea of building one for someone else, for money. His passion for building and flying model radio controlled aircraft had over the years resulted in a substantial and quite valuable collection of masterpieces, particularly in the Red Piper models. He had developed a highly-refined 'knack' for producing them. John's love for his hobby did not end on the workbench where he put his airplanes together, nor at the local speedway where he flew them once or twice month on weekends. He wanted to share his experience with others, he wanted to build planes people could keep. The truth of the matter was that John simply needed a reason to devote more of his time to the one thing he loved most in life - his Red Piper model airplanes.
THE PRODUCT
John reached over to his backpack and grabbed a notepad, pen, and a calculator. He began to conduct a preliminary investigation to formulate some sort of a plan and to determine the feasibility of his new idea. First, he figured that each new model plane would be entirely unique -- some consisting of basic designs and others incorporating many different features, gizmos, and gadgets. Second, he proceeded with a rudimentary financial analysis to determine how much money he should charge for his planes. Given his skill at building radio-controlled model aircraft, he figured that his time was worth about $20 per hour. Since it took two months to build one plane, John figured that he would need 320 hours of work for a total of $6720. After raw materials were included, John's calculation totaled $7300. Pausing for moment, John wondered if anyone would really be willing to pay $7300 for a finished model when they could purchase the kit and build it themself at a fraction of the cost. How could he create enough value to warrant a purchase for that amount? He couldn't. Even if he dropped his price dramatically, he would only be able to build six airplanes in any one year. John suddenly became uncomfortable with the whole idea, but still continued on with the investigation.
PRODUCTION
The fact that John could only make several airplanes a year actually didn't bother him. He was in it for the hobby, not for the money. And it really wouldn't matter if he made any sales at all - he would build his Red Pipers regardless, for his own enjoyment. John always chuckles to himself when friends and relatives come to visit and ask surprisingly where he finds time to fly all of his airplanes. When admiring his collection, he always found humor in the fact that more enjoyment is derived from the work then from the end products themselves. He didn't even need the airplane -- just the satisfaction of building it! Beveling edges, sanding corners, the gluing together of pieces. The smell of the resin and paint, fine grains of multicolored sawdust on the floor, a recently crashed model in the corner awaiting repair, the workbench littered with precision instruments and tools each of which strategically situated to achieve ultimate efficiency. His world of airplanes was his life.
