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 21: "B/K" Diagram

Figure 22: Target "Bulls-eye" 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.

CASE STUDY EXAMPLE:

Red Pipers & Radio Controllers -- The Hobby
John Klippenstein 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 so excited about radio controlled aircraft that he had always considered the idea of building one for someone else, for money. Over the years his passion for building and flying model radio controlled aircraft had resulted in a substantial and 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 the 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 started on a plan to determine the feasibility of his new idea. He decided that each new model plane would be entirely unique -- some consisting of basic designs and others incorporating many different features, gizmos, and gadgets.

He also developed a rudimentary financial analysis to determine how much money he would need to 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 $6,720. When material costs, parts and other supplies were included, John's calculations totaled $7,300.

Pausing for moment, John wondered if anyone would really be willing to pay $7,300 for a finished model when one could purchase the kit and build it oneself 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 became uncomfortable with the whole idea, but continued on with the investigation anyhow.

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 for his own enjoyment. John always chuckled to himself when friends and relatives came to visit and ask where he found time to fly all of his airplanes. He was amused by the fact that he enjoyed building the planes more than flying them. He didn't even need the airplanes -- just the satisfaction of building them; beveling edges, sanding corners, gluing pieces together, the smell of the resin and paint, fine grains of multicoloured sawdust on the floor, a recently crashed model in the corner awaiting repair, the workbench littered with precision instruments and tools – all combined to create his own personal Utopian world. Never would he abandon his airplanes. Suddenly John awoke. The sun was down now, but the pain from the burn would linger for days!