Eight years ago, I dreamed up the idea for ChooseWhat.com, which I still successfully run today. My successful business wasn’t the business I started with, however. My first attempt at entrepreneurship was a rock climbing guide service called Rock’A’Fellas...which failed with no more than a whimper.
More than fifteen years and several startups later, I’ve developed a much better way to evaluate my own ideas through trial, error and good advice. Here are my six ways to tell if your business idea is a good one.
1. Nurture Your Idea
When you’ve thought of an idea that has strong potential, spend some time building it up before you tear it down. Ideas need to be nurtured and developed before they’re scrutinized and tested. Develop a marketing strategy of at least one solid revenue model, an initial plan for rollout, etc.
2. Make a List, Check It Way More than Twice
Keep a written record of all the problems and challenges that you perceive as threats to your business’ future success. As you go through the next few exercises, continuously update this list to ensure you have a complete record. This list will not only help you determine if you should go forward with the business, but if you do press on, these will be the challenges that you must overcome to be successful.
3. Try Some Roleplay
It’s pretty difficult to shrug off personal bias when evaluating an idea. Fire up your imagination and create characters that match the demographic of your customer, supplier or other stakeholders. Give your character a name, gender, job, family and any other details you need. Once you’ve created this character, adopt the persona and imagine how you, as this character, would view the business. How important is the business to your character? What concerns do you have? What prevents you from buying from the business or selling to it? How are you currently meeting the need that the business aims to fill? How difficult would it be for you to switch to the solution offered by this business? Now is the time to start thinking abstractly!
4. Get Chatty
Feedback from one person is not particularly useful, but feedback from lots of people is invaluable. Don’t confine yourself to industry experts and trusted advisors; talk to people who don’t know anything about the industry as well. Sometimes the feedback from the least informed (which is also usually the least biased) person is the most useful. When discussing your idea with these people, don’t just listen to their words; pay attention to their tone and body language. Sometimes what people say isn’t as important as how they react. Ultimately, the decision on whether your idea is worth pursuing is yours alone, but you can get insights from people to help you make an informed decision.
5. Get Testing
Run a small test of your business idea before you invest fully. Build a small prototype, a beta website, make a sales pitch: whatever you need to do to see if stuff works. Find a way to simulate the business that you intend to scale so you can get honest feedback from real customers. Before creating ChooseWhat.com, I created a very simple, single purpose comparison website for online fax services called Faxcompare.com. The site’s immediate success was evidence that the idea had great potential.
6. Do You Really Wanna Do This?
Entrepreneurship is hard, but it’s a lot less hard if you love and believe in what your business does. If you think your idea will make money, but you don’t really care about anything else it does, your entrepreneurial journey will be considerably more painful…and likely short lived. Money follows passion, not the other way around!
I’ve been running my business for eight years, and like many entrepreneurs that have experienced success, my road has been anything but smooth. Fortunately, I did the work to ensure that my business idea was worth pursuing, and I’ve had no regrets. If you decide to start a business, have the patience to wait for the idea that is truly great and holds up to honest analysis.
Have any questions for Leo? Let us know in the comments!