I Think I Have a Startup Idea
I was recently asked this question.
“I think I have a good business startup idea. Now what?”
My answer was to smile at their question. “I think?”
I told them that I’m not quite sure that starting a business (or even beginning the business planning process) is correct or beneficial when you only start with “I think.”
However, assuming you actually have a great idea, the first step is to build a business plan.
But in order to do that, there are three ponderables that I believe are helpful to frame the production of that document. Ask these questions to yourself before you sit down to create any kind of business plan.
Is it a passion?
Do I have an overwhelming passion for this idea or widget that I’m going to build? As an example of overwhelming passion: does it keep you from sleeping at night because you’re caught up thinking about it? Does it cause you to bounce out of bed in the morning to get to work on it? Does it (without overstating it) stir your soul in some measure?
That’s not some ethereal point, and I’m not exaggerating. You’ll need that to get yourself through those dark and dreary moments that will come in any startup or entrepreneurial venture.
One of the outgrowths of that soul-stirring passion is that you will tend to be more insightful on that particular issue or item than most of your competitors. You’ll need that as well.
Is there a need?
Does the market think it needs this product? Is there a niche? I’m going to resist the temptation to call it a blue ocean as I don’t believe in that “phooey.” Refer to other posts on that subject if you wish.
But does the marketplace need the product? That’s a different question than “does the marketplace think it needs it?”
None of us knew we needed smartphones before the iPhone.
None of us knew we needed digital music sharing before Spotify, or iTunes, or other such services. Steve Jobs was famous for saying that customers didn’t know what they needed or wanted. An astute entrepreneur identifies the need, maybe even before it’s commonplace as desired in the marketplace.
Can I do it well?
Can I design, define and execute with operational excellence and an economic engine that drives this idea to fulfill the need in the marketplace and leaves me room for profit or positive cash flow? It’s all very well to have a great idea. It’s all very well to have passion for it. It’s all very well that you’ve identified the market needs for it.
But if you can’t “make a buck” on the idea– if it’s not driven by some economic engine — then you have a hobby, you have an idea, you have a charity. That’s all well and fine, but none of those are a businesses.
Can you turn all of the elements around your idea into something of value? Can you focus them in on a way to make an economic engine out of them? A great example is Facebook and other social media platforms: when they first came out, they were doing very well because it was the trendy space. But the underlying question for all of them, including Amazon, was when are you going to make some money? How do you monetize this? How do you turn these followers into bottom-line results?
Amazon, Facebook, Google et al, have been able to do that. If they hadn’t, they would be dead, like many of their competitors.
So number one: do you have an overwhelming passion and therefore some degree of underlying expertise for this particular idea as compared to your likely competitors? Number two: is there a need for this in the marketplace, whether recognized by the marketplace or not? It’s a little bit more difficult to glean whether there’s a need when it’s not known, but if you can nail that then you’re onto a very good thing. And number three: including all the financial, operational and logistical issues, is there an economic engine here that can drive your business into a long-term authentic, predictable, sustainable, high-growth business endeavor?
After all, I assume that’s what you’re after.
Answering those three questions in a brutally honest fashion, soliciting advice from those for whom you have respect and who have knowledge in the space you’re looking to enter, and answering them in a robust way frames your business plan.
From there, you can proceed to writing that business plan. You’re writing them for your own benefit as a road map of what you’re going to do and how your team is going to operate. Not to please some VC or angel investor.
Keep that in mind. It makes the document that much more meaningful, that much more helpful.
To all of you out there with great ideas, I hope this helps.
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