How Do I Know If My Business Idea Will Work?
The great Irish playwright and journalist, George Bernard Shaw once said, “There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?” That’s the way I approach business ideas.
Over the last twelve years, I’ve had the privilege of launching over 50 startups and consulting with dozens more. All that activity was just the finished fruit of hundreds – maybe thousands – of ideas, most of which will never see the light of day.
And even within that bunch that came to full fruition, over 75 percent started, stumbled, and ultimately failed. That’s about par for the corse. I don’t know anyone who launches successful businesses 100% of the time, except for maybe the random person who got it right the first time and rode that success all the way to the end.
You Have Ideas
What about you? I’m guessing if you’re here, it’s because you have a nugget of a business idea you’ve been dreaming about and you want to see if it could work. You know the one I’m talking about because keeps you awake at night, or it’s swirling in your mind on the way to work.
So this week, I want to talk about those ideas – where they come from, how they come to fruition (if they ever do), and how you can determine if that idea is a hit or a dud. I talk to business owners, venture capitalists, and newbies with big dreams every week, so I have a pretty good idea how this works for most people.
Where Does A Business Idea Come From?
Most of my ideas come in the shower. I don’t know why – maybe my mind is quietest then. I know that when my day kicks into gear, there are rarely moments to set down my phone and ponder the opportunities around me. But when I am quiet – and I have learned to be intentional about setting aside quiet times – ideas appear out of thin air.
There are many triggers for business ideas. Some people get ideas in the car; others when they are reading the newspaper. Some entrepreneurs I know carve out a block of time every month (or even every week) that they devote to quiet creative thinking. They spend that time brainstorming, just to find ideas worth pursing.
Most people might go their whole life and never get an idea for a business; others will recognize one or maybe two. That’s not to say the ideas aren’t there – business ideas are everywhere. You’ve probably had several great ideas and didn’t recognize them as such. Or you didn’t have the business mindset that allowed you to recognize the business opportunities behind a problem you were seeing.
How Do You Develop This Mindset?
I recognize businesses around me because I’ve cultivated that awareness. It starts with looking for pain points that I want to solve – either in my life or someone else’s.
I didn’t just stumble on that awareness, though. I’ve spent time with people who had conditioned themselves to think that way. You can develop the entrepreneur’s sense for recognizing business opportunities just by hanging around entrepreneurs and listening to how they think. Those are the people who have made a career of looking for problems to solve and people who will pay them to solve those problems.
If you want to take it to the next level, find someone who will mentor you. There are people out there who have converted ideas into successful businesses and are willing to use their experience to help other would-be entrepreneurs develop their ideas. You might be surprised at who is willing to answer your questions. Most are perfectly willing to sign a legal non-disclosure agreement to protect your idea. Those are good people to know.
What Problems Do You See Around You?
This is really the crux of where business ideas come from — most businesses are simply the answer to a problem that someone thought should be solved:
- Garbage collection services pick up people’s trash for them and take it to a separate area.
- Mechanics fix broken cars.
- Dry cleaners get the tough stains out of people’s clothes.
- Musicians teach lessons to people who want to learn an instrument.
- Delivery services transport documents (or packages or food or people) from one place to another so the senders can keep doing what they were doing.
In almost every case, someone recognized a need in the marketplace that wasn’t being filled. Either it wasn’t being filled at all or they found a better (read: cheaper, faster, cleaner, more efficient, more exciting, more ethical) way to get it done.
Why Doesn’t Everyone See The Business Ideas Around Them?
You and I see needs and problems all around us every day. What’s the difference? Most people see problems and wish someone would do something about it. Entrepreneurs see opportunities and make a determination to do something about it. Not everyone sees with the eyes of an entrepreneur.
I wish more people understood this: your multi-million-dollar business is simply the answer to someone else’s problem. It might be a problem you are experiencing yourself, or it might not. Some of the best doctors I know were patients themselves once. But because we’re not looking for problems to solve, we don’t see the opportunities when they show up. Opportunities to make a fortune.
Change Your Thinking About What Opportunity Looks Like
The old says goes, “necessity is the mother of invention.” Do you want to make a boat-load of cash? Open a coin laundry. You’re solving a problem lots of people have and are willing to pay money to solve. It really is that simple.
Is it sexy? Heck, no. Is it profitable? Oh, yes. Now, you have to have some business sense, but it doesn’t take an MBA to start an extremely profitable business. That’s the mistake most people make: they miss the big money opportunities because they are looking for businesses that make them look good or satisfy their need for status. Good luck with that.
As my business coach, Dani Johnson has said, “Weigh your ego with your bank account and see which weighs more.”
Find Someone Who Will Pay You To Solve That Problem
Once you identify the problem you are willing and able to solve, the next question is “who else has this problem, and are they willing to pay to solve it?”
Chances are, someone else in the world of 7 billion people has experienced the same inconvenience, frustration, hindrance, or danger that you have decided to fix. The Internet has transformed our ability to identify people in every time zone who have that problem. It’s no longer simply a matter of going door-to-door in your neighborhood looking for people who want to solve the same problem you do (although plenty of people make millions doing that).
That doesn’t mean that every human is your customer. Most people will probably say no, for one reason or another:
- Some don’t think it’s a problem.
- Others don’t think it’s important enough to solve.
- One group won’t trust your ability to solve it.
- Then there’s the people who don’t want to pay for it (or pay what you’re asking).
- Some people already get that problem solved some other way.
But before you go home defeated, remember that there will always be more people out there that you haven’t presented your solution to.
Identify Your Avatar
It’s a mistake to scattershot your marketing to try to reach everyone. Companies (and nonprofits) waste a ton of money every year producing marketing materials that don’t reach anyone because they are trying to reach everyone.
It seems like it should be common sense that the ad copy that works for teenage boy won’t work for middle-aged women. But even more granular, you know that the world is broken up by language, age, personality type, income level, social groups, habits, religions, and a hundred other characteristics.
Your job as a marketer is to identify one core client and get really clear on that. We’ll deal with this in more detail in another article, but for now, let’s establish that you want to get really granular on who will use your product and write your marketing for that person. Obviously, no two people are exactly alike, but if we can identify a small target group, it will make our marketing spend much more efficient. The more clearly defined your client avatar, the more precise your marketing messages will be.
Even Walmart, who could literally throw $100 billion a year at marketing, and has something for everyone, has a core customer avatar.
I’ve found that that one of the easiest problems to solve is the problem of convenience. People are too busy. They will happily pay people to do things for them: make deliveries, pick things up, mow their lawn, teach their kids, walk their dogs, and the list goes on forever.
I like to share the example of how Zappos.com got started. Here’s a guy who went into shoe stores and took pictures of the shoes. Then he advertised them online to see if anyone would be interested in buying shoes off the Internet instead of going to a store. If someone saw a pair of shoes they wanted on his website, they would send in their payment. Then he would go to that store, buy the shoes, and ship them to the buyer, keeping a little convenience profit for himself. Pretty slick!
Don’t you wish you had thought of that?
Blowing Up Excuses
This blows up a couple of the biggest excuses I hear from people who are afraid to get started with a business. First of all, he didn’t have any inventory. He didn’t need any! He provided the service of going to the people who had the inventory and buying the desired shoes for his clients. If you think you have to have a product in stock to sell it, you are missing opportunities. Customer service trumps having a physical product.
And just because you have an idea for a physical product doesn’t mean you have to have all the materials on hand to start selling it. I’ve seen people pre-sell books or music albums and use the funding from the pre-orders to get the equipment, materials, and help they need to start production. Some people think they have to have an investor pour in $500,000 before they can start. The truth is, most venture capitalists and investors want to see some forward motion already taking place before they risk a bunch of money on an idea.
How You Can Tell If The Market Wants Your Business Idea
As I said before, not every business idea will work, and there are a couple of reasons for that:
- Your idea doesn’t solve a problem the market cares about.
- You (or your team) don’t do a good job executing on the idea.
You are going to make lots of mistakes launching your business. That’s fine. Business is iterative: it changes and gets better over time. But that’s why it’s better not to pour a ton of time and money (even other people’s money) into a “killer” business idea until you’ve had a chance to test it.
How To Test Your Idea
I’ve found that there is an informal process for test driving a business idea before you go full-throttle on it:
- Brainstorm ways to solve the problem you’ve identified. You can sketch it out on a whiteboard or post-it notes.
- Identify your test market – who is your ideal client? Do this early in the process. Develop your avatar and try to sell your product to them first. Your target market is going to give you the best feedback of whether or not your idea is viable.
- Reach out to them and ask. I’ve done this with email campaigns, online ads with landing pages, free book offers, and even door-to-door and in-person. If they like it, they’ll usually tell you. If it’s a lousy idea, people will tell you what they think is wrong with it. Be OK with that.
Don’t Do Anything Else With Your Business Idea Until You Read This
Be prepared for your idea to suck. Don’t get your ego wrapped up in it. You don’t know everything about your target market, what they want (or think they want), or what they care about. If you have an idea that isn’t being served at all, there’s probably a reason for that. Be prepared for people to think it’s a stupid idea. Don’t take it personally. They’re not ready for your idea yet, or your idea isn’t ready for them.
Every writer I’ve ever known said the book they start writing is never the book they finish writing. As you learn what your market is looking for, your product will adapt to match their beliefs and values. The closer you get to what people know they want, they easier it will be to sell it to them. If you’ve lit up the market and you are making money hand over first, and you are convinced that your original idea was the best idea, try it. Release a version of the product that looks like your original intent. Maybe the market is finally ready for it and they just didn’t understand it before. More likely, you will find that your original idea was inadequate in one way or the other.
I Can Help
Part of my mission in life is to give back to entrepreneurs because I have been so blessed in this area. I’ve learned some lessons and taken notes sitting with some amazingly successful people. I’ve had enough of my own successes and failures to be able to recognize both.
If you’ve been cultivating an idea for a long time, but never felt the confidence to take action on it, this might be a great time for us to sit down and talk through it. Let me put it through my diagnostic. Even if you don’t understand all the terms on the worksheets, it’s OK. You don’t have to. It’s my job to look at your idea with you and identify the strengths and weaknesses of your idea, as well as the pitfalls that could shipwreck you.
I’d love to help you be every bit as successful as you want to be.
Join The Conversation On Social Media
And reach out to us on Facebook of LinkedIn. If this article was helpful to you, or if you’ve been following us through the last few weeks and you’ve gained some insights form it – even if it’s just one thing, take a few seconds to let us know. We’re building a community of entrepreneurs there, who are sharing ideas and encouraging each other. We also have a podcast that drops every Wednesday morning, where we cover a lot of these kinds of topics. I hope you’ll subscribe.
And, if you don’t mind, as a favor to me, share this article on your favorite social media platform. You might have a rising entrepreneur in your family or your social circles and they don’t even know it yet. This might be the trigger that takes them into a whole new lifestyle. It might help to wake up someone’s dream and given permission to dream. I’m willing to take all my experience to take them by the hand.
Let’s get started.