May 14, 2019
Sometimes inspiration strikes you like a lightening bolt. For this blog-worthy occasion it was a text from a friend. They're about to start a little idea lab with some like minds. A collection of industry experts looking to spot an opportunity. Sounded great, and I was keen to know more. I prefer to watch people than businesses, and this was a solid crew, and one to keep an eye on. They then asked me a question I thought worth expanding on:
How do you judge if a business idea is actually any good?
First up, what a killer question, I wish more people asked it. Founders can make a mistake of building a product without assessing if there's a real business behind it. Now, if what you want to do is hack on a side project over the weekends, and slowly see if you can monetize it - then maybe you don't care if it's not a "business".
However, if your aim is to build a business, then here's a few methodologies that might help you answer this big question. Get yourself a canvas.
Hold up? We're not artists! Wait, wait. In this context, a canvas is a framework to help you think through your ideas, a series of directed questions that help you & your team focus on the core issues.
There's two main ones that people use:
Business Model Canvas - The OG canvas, not necessarily the GOAT but highly adaptable to a range of business models and is corporate friendly. Lean Canvas - This is Business Model Canvas that's been specifically tailored for Lean Methodology.
If can often be helpful to have a facilitator to help you run through the Canvases, but this is only needed the first time, and the main trick is to try and find consensus.
Let go of your Ego.
Hey, you, yeah, you with the attitude. Your idea may not be the best one, so get over it. Your job here is to be part of the process, not to WIN at having the best idea. So park the ego and try and see how you and the group can build a business. One that works, that makes money, that employs people. Long term, that's what business is all about, not who-had-what-idea-when. That said, don't be afraid to defend an idea you're passionate about. But be chill.
Focus on the money.
I've always been the ideas man, and for a very long time was not interested in the money bit. I arrogantly believed that I could conjure up such wonderful ideas that the world would bend, and the money would just pour in. Yeah. Well, I was wrong. After a long walk with my co-founder at the time, in New York, we were shooting off ideas and ways to make more revenue. We sat down in an Irish bar, and he whipped out a spreadsheet, and before the pint had even been touched, my latest, greatest idea ever was dead. Run the numbers, work out the break-even, work out the money in and out, and test your assumptions. No idea is worth anything until someone has given you money for it.
Test, Test, Test.
Once you think you've an idea, a sense of the potential business opportunity, now you can test your idea. This can be a simple as a VoxPop in a cafe, or a highly targeted survey, it could even be a landing page with an email sign up form. However, and whatever you test, make sure you listen to the results, and adapt accordingly. Trust in your potential customers, and do whatever you can to get them to give you some money! Rob Fitzpatrick wrote an incredible book on just this subject.
Well, that's the basics at least! As ever, drop me a line if you want to talk about anything in this blog post.
Here's some more in-depth resources for those of you wanting to dive deeper.