Entrepreneurs by definition make living by taking risks and betting on the future. There's a lot of pressure to forecast the future accurately as cash is often very tight.

The good news for entrepreneurs is that most large companies are even worse at anticipating the future. Big companies are largely reactionary and follow the crowd.

The trick is to focus less on what is happening and be curious about why it is happening. Take a breath, count to ten and don't act until you figure out the fun-to-chore ratio. Every business has an overall fun to chore ratio, where some parts of the experience is enjoyable while others are a hassle. Every successful business has either added more fun, reduced chore, or done both in a way that creates more value for the consumer than competitors.

Which part of the 'fun-to-chore' ratio is being solved?

Consider Costco and Trader Joe's, which are on opposite ends of the spectrum size wise, but both deliver outstanding and unique fun to chore ratios.

Costco is famous for its treasure hunt experience throughout, but even more famous for their fun, free samples. If that isn't good enough, there's nothing like cheap, hot pizza waiting at the food court. The fun aspects of the experience drive shoppers to Costco.

Trader Joe's has greatly reduced chore by with a small footprint that is easy to shop. If the lines are too long, a bell is rung and another lane opens up. Trader Joe's is basically a convenience store with a wide variety of awesome chips, chocolate, and wine with some produce thrown in here or there. Fun shop, but with chore highly reduced to get in and out, which drives a loyal fans and frequent trips.

How much more fun is there? How much less chore could there be?

The key to this is realizing that where there is smoke there is fire. Successful businesses just point to the fact that there can be even more fun and even less hassle.

Let's look at meal kit delivery businesses like Hello Fresh, that is a mix of more fun (new recipes) and less chore (no shopping, pre-portioned, ready to cook). That sounds innovative, but the fundamental question remains will meal kits be the way that most people eat most of the time? My point of view is no, that cooking is going the way of sewing, per my recent HBR piece on cooking. People spend more money eating out than eating at home. Countries like Korea have ubiquitous meal delivery. Meal delivery kits are not the final destination of this trend.

Walmart announced they are moving into meal kits in December. Albertson's just bought Plated. Good moves? Or should they have bought Domino's Pizza and moved straight to meal delivery by figuring out what other meals could be an easy, margin accretive add on to pizza which everyone loves? The key is to focus on the current behind the trend and plan multiple moves ahead.

Are there Sacred Cows in the Fun to Chore Ratio You Can Exploit?

Peer to peer payment systems like Paypal and Venmo have taken off. Zelle is the next new thing and is backed by over 30 banks. Is this the last stop of the fun to chore ratio?

It's not. Paypal, Venmo and Zelle all require a relationship with a bank or credit card. And Millennials hate banks, per a study by Scratch a unit of Viacom. In the same study, it shows of the ten most hated brands amongst Millennials, banks occupy four spots. 71 percent of millennials would rather go to the dentist than a bank. 73 percent would be far more excited about an banking innovation from a leading tech company than a bank.

Why do they hate banks? Banks have a terrible fun to chore ratio. Very little fun, especially as nationwide banks offer barely anything in interest. Terrible chore, especially thanks to seemingly hidden fees and penalties. A report by TransferWise shows the average US household spends $290 per year on banks in bank fees. When they realize how much they spend, six in ten Americans are shocked and disgusted.

But this is a huge source of profits for retail banks. So it's not going away anytime soon. Real innovation is coming from Prepaid Cards, which offers total transparency and fixed fees that are nearly 80 percent cheaper than the annual fees the average American household pays on a bank. You get virtually all the functionality of a checking and savings account. But without the bank.

Upstarts in prepaid like Netspend and their partner brands like Brinks will be very successful going forward and less competition than they should have from big banks, because they are in the off-limits zone of the fun to chore ratio.

Published on: Oct 6, 2017
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.