'What Do You Think Of My Business Idea?’

I have huge admiration for anyone who has an idea for a business and takes the steps to bring it to market. I often get asked, ‘What do you think of my business idea?’ My response is usually the same and driven by a mentoring mindset. I love hearing business ideas and feel privileged that people trust me with concepts when there are often in embryonic and fragile states.

This article will outline my response to ‘So, what do you think of my business idea?’. But first I want to talk about Idea Generation and where do the best ideas come from.

Idea Generation – where do the best ones come from?

One of my all-time favourite business books is ‘

‘In the microscope phase, there’s a cry for level-headed thinking, a return to fundamentals, and going “back to basics.” Experts magnify every detail, line item, and expenditure, and then demand full-blown forecasts, protracted market research, and all encompassing competitive analysis. In the Telescope phase, entrepreneurs bring the future closer. They dream up “the next big thing,” change the world, and make late-adopters eat their dust. Lots of money is wasted, but some crazy ideas do stick, and the world moves forward. When telescopes work, everyone is an astronomer, and the world is full of stars. When they don’t, everyone whips out their microscopes, and the world is full of flaws. The reality is that you need both microscopes and telescopes to achieve success.’ – Source: Art of the Start, Page xi

Ideas and inspiration

In Chapter 1 of ‘Art of the Start’, Guy talks about the source of ideas and inspiration for the design of new products and services:

“I want One” – The customer and the designer are the same person.
“My employer couldn’t (or wouldn’t) do it” – Whereby your background allows you to understand the customer base, competition, supply sources, and industry.
‘What the Hell – It’s Possible’ – Probably R&D driven, this approach is not popular when times are tough (and microscopes are the order of the day) but it is the innovation that is now described as Disruptive. Guy uses the example of the mobile phone market which did not exist before Motorola. There was a time when portable phone was considered an oxymoron. I read recently that 1.9 billion phones were sold globally in 2012.
“There must be a better way” – Born of the idealistic notion that you can make the world a better place by doing something new.

I would generally add one further category to this list: The Franchise or indeed the Clone Business Model where you are taking an idea that works elsewhere and adapting it to your immediate market.

Idea Validation – new idea pitfalls to avoid

After asking about the genesis of the idea and how this fits with the background of the promoter, I will discuss with startup promoters some of the dangers inherent in new business and new product development as outlined in the brilliant book by Rob Adams ‘If You Build It Will They Come: Three Steps to Test and Validate Any Market Opportunity’.

If the business concept is part of your job experience, or equally is emerging from an R&D project that you were involved in, do not extrapolate without proof of real need in the market.
If the business idea is part of your consumer experience he counsels that you may be an expert consumer rather than an expert at producing consumer products.

Early in the book he points out that more than 65% of new products fail and that the failure rate for start-ups jumps to 90%. He adds that North America alone spends a whopping $260 billion annually in developing products that ultimately fail and only $140 billion on successful products.

Those figures certainly grab the attention and no doubt convince many readers that they need to read the rest of the book in find out how to implement a process to test and validate their business opportunity.

My response to – is this a good idea?

‘I am only one person. It may not matter what I think. You need to talk to your potential customers’. If I can see that I am typical of a customer segment that the business could target, I will answer from a personal perspective on whether I would buy it and more specifically talk about whether I can see that it solves a problem for me and how I am solving that problem now (if at all). I would explain that this is the insight that startups need to gain from potential customers.

Only the beginning of the conversation

A journey of a thousand miles begins with a single step

– Lao Tzu, philosopher of Ancient China

My answer raises more questions than it answers. It opens up the conversation to discuss:

Ash Maurya’s Lean Canvas
Market Validation Process
How to undertake a Feasibility Study

The original idea, concept or vision sets a business apart but it is only the start of the journey.

So, how do you respond when someone asks ‘What do you think of my business idea?’. I am looking forward to hearing if the Tweak Your Biz community agree with or can add to my response.

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