What if you could be sure that your business idea doesn’t suck?
Instead of trudging to work tomorrow for another unfulfilling day, you could stride into your boss’s office, resignation letter in hand.
You might as well buy that yacht now, since you’ll be sailing into the sunset by this time next year, enjoying the profits of your brilliant idea.
Sounds like magical thinking, because it is.
When should you have confidence in your business idea, and when should you listen to that uncomfortable feeling in your gut? Learning how to decide what business to start is one of the most important skills in an entrepreneur’s toolbox.
When you ask your friends and family, you generally get you a round of thoughtless affirmations interspersed with dire warnings. They either want to build up your self-esteem or keep you from making a big mistake.
Of course, there is the Magic 8 Ball, but it keeps telling you to ask again later. Damn you, Magic 8 Ball!
The success stories of brilliant entrepreneurs with innovative ideas, lead many to believe that a good business idea has to be clever, unique, and something that has never been done before.
But for every Twitter, Uber, and Warby Parker, there are thousands upon thousands of small businesses helping people communicate, travel, and get the eyewear they need.
Ideas are cheap and unpredictable. They aren’t worth anything until someone gives them life. Your brilliant innovation may turn out to be too complicated to work, or it may turn out to be something the world didn’t know it urgently needed.
On the other hand, your idea for a cabinet-making business can be as traditional as it gets, but if you position it in the right way, it could become an empire.
You don’t need a Magic 8 Ball to tell you if your idea will work. You need proof of concept that can only be found by trial (and error).
1. Who are your customers?
So you have an idea for a product or service that solves a problem for people. Now let’s figure out exactly who those people are. Trying to be all things to all people is a recipe for disaster, so narrow it down and be something perfect for a select few.
Age, gender, subculture, and any defining characteristic is important to identify. These things tell you where to find your customers, how they make buying decisions, and the aesthetic around which to design your brand.
Don’t worry if someone out there is already doing something similar to your idea. The existence of successful competitors is your clue that a market already exists. That’s great news — there are already people willing to pay for what you will be offering.
You’ll still have to find a way to differentiate yourself, which we’ll get to next.
2. Who are your competitors?
Your unique positioning is what sets you apart from the competition. Your business has to deliver something a little different than what everyone else is doing, or deliver it in a different way, to get a share of the market.
For example, when I started Hack the Entrepreneur, I looked at all the interview-based podcasts in the business category and found a way to structure mine a little differently.
I set my podcast apart by creating a different format. I made it shorter and more concise, with interview questions that would tackle the entrepreneurial mindset, more so than the nuts and bolts of my guests’ businesses.
Looking at the top competitors in your market, find a way to be a little bit (or a lot) different, making sure you’ll have a shot at standing out from the crowd.
3. What will you name your business?
How you present your business idea is more important than the idea itself. And it all starts with the name.
Naming and branding your business is a creative process of combining what you know about your customer’s values and your unique value proposition.
The best approach is to let the ideas flow. Write down every idea that runs through your mind, no matter how bad it sounds. Most will be terrible, some will be ok, and eventually there will be one that is perfect.
4. What’s your minimum viable product?
Resist the urge to spend an eternity in research and development, over-learning and waiting to perfect your idea — to the utter detriment of an actual launch.
Perfectionism is the enemy when you are only trying to get proof of concept. Businesses don’t spring from the womb fully formed. They grow and diversify over time, and you have to start before you can go through that process.
Only through interacting with customers can you gain insight into precisely what they want. So it’s time to build a place where potential customers can learn about your new business, and start bringing them there.
5. How will I find customers?
Many people jump ahead to this step with a focus on their business idea, rather than the people they are trying to reach. Setting up a website and marketing plan is all about connecting in a meaningful way with the people you are trying to reach.
You already know who will be looking at your website. You know how they think of themselves, what kind of purchases make them feel good, and which annoying problem you can help them solve.
You will know where they hang out, in their every-day lives, and on the internet.
Set up your online presence ( a Wordpress website is the way to go) with everything you know about your potential customers in mind.
Then find some customers.
There is a tendency in this age of start-up culture and viral marketing to look down on traditional selling methods like cold-calling and emailing as ineffective or unscalable.
Automation and scalability can create growth in a business that has been proven to make sales. However, when you are just starting out, there is nothing to scale.
Keep it simple with this advice from Austen Allred: “Find your customer base, contact them, and ask them to be your customer.”
People underestimate how far you can get with brute force. Cold calling, emailing, etc. You could make a company successful on that alone.
— Austen Allred (@AustenAllred) March 7, 2017
If your business idea is viable, you should be able to find proof with a little persistence and brute force.
6. What is your success metric?
You will only know for sure you have succeeded if you define what success means. To determine viability, how many customers do you need to have?
Before you quit your job and throw your life savings into a business idea based purely on the excitement of a few early successes, decide on a metric that objectively tells you that you have a winning idea.
Ideas come from ideas
Instead of fixating on coming up with the perfect business idea, you could be testing out your less-than-perfect ideas, one after the other, until you come up with a winner.
The best business ideas are often the result of failed experiments that evolved into something that worked.
The only catch is that you have to be in the game before you can win.