Determining The Viability of Your Idea
How do you validate your idea to determine whether it can be a business success and help you achieve your personal and professional goals as an entrepreneur?
Here are some techniques to think about:
- Unique Value Proposition. In addition to solving a business problem, you must be able to do so in a way that is unique so that customers turn to your product or service. Take some time to hone in on why your solution is unique. Try using a technique they called the “seven why’s”. Ask yourself the question “why are we unique?” and then when you get the answer, ask yourself “why?” seven times. When you get to the end, you will likely be honing on why your business is different.
- Hone in on a Business Problem. Businesses succeed because they solve a problem for a consumer, business or other customer. You must be able to clearly articulate the business problem you’re solving and why that problem is not being solved by alternative products or services. Clearly lay out the specific business problem that you believe your product or services solves.
- Consult Those Who Will be Candid with You. Obtain the advice of colleagues or friends that you consider to be smart business people. Keep in mind that this is not necessarily your best friends or the people you are closest to, but rather those that have a business sense but that will also be candid with you.
“Thinking through these issues is worth the time.”
- Competition. Understanding your existing and potential competitors is very important when it comes to evaluating your opportunity. Take a look at existing competition and also at potential competitors that may target the same business problem. Don’t be discouraged by competition as every business has competition today. But understanding the competitors that exist and how they are attacking the same or a similar business problem is essential to determine the viability of your idea. One technique is to make a chart that lays out the top five or ten values or features of a competitor and scores each on a scale of 1 to 10. Then score yourself. This will give you a basic understanding of competitors in their strengths and weaknesses. And have someone other than you do a rating for your company because as we know we are often not objective about our own solution.
- Results of Others. Understanding why other companies have succeeded or failed in addressing a similar problem will give you great insight into the chances for success. Try to get a sense of what worked and what didn’t work. You might even reach out to former employees of those companies as they maybe great resources to give you a sense of the market.
- Talking to Potential Customers. When large companies launch products and services, they often do focus groups in which potential customers are asked their opinions about a particular product or service. While this is difficult to do on entrepreneur’s budget, you can mimic this approach by talking to individuals and getting their opinion on your potential product and service. You want these potential customers to be objective so they are likely not your best friends or family who may not be as candid with you as you need them to be. You want to ask them about your product and service in general and perhaps even about specific features that they would find beneficial or distasteful.
These are just some of the techniques we go over, we have more in our Learning Community!
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