Your Great Business Idea Is Completely Worthless #11 #cong18
Your great business idea is completely worthless. Here’s what you can do about that.
4 Key Takeaways:
- Most “great business ideas” suck and are going to fail
- Validate your idea with real customers
- Fail as quickly as possible
- Iterate based on what you learned
About Alastair McDermott:
I specialize in helping consultants, speakers and published authors to increase their sales. Unlike other marketers, I focus on customer lifetime value before focusing on conversion optimisation. I’ve been building websites and software since 1996 and I blog, and make media of all kinds at WebsiteDoctor.
Contacting Alastair McDermott:
By Alastair McDermott.
Have you ever heard someone at the bar say something along lines of “You see that guy making millions – I thought of that five years ago! That could be me!”
No, it couldn’t.
Because your great business idea had absolutely no value – unless you took action and implemented it.
An unimplemented business idea doesn’t do anything. It doesn’t have value until someone makes it happen.
Until you take a business idea and try and turn it into reality, you don’t really know whether it’s going to be truly valuable or not.
Implementing a business idea is the hard part. It takes time and effort, which are the easy ones, and often money and knowledge too, which can be more problematic. Often you need other people to help create the concept, explain the concept, and sell the concept. You need customers willing to open their wallets and give you their hard earned cash in exhange for your idea – implemented.
Wannabe entrepreneurs often encounter this issue: they think they have a great business idea, but they don’t want to tell anybody about it in case it’s stolen.
Here’s the truth:
1) Your idea probably sucks and is going to fail.
2) In the unlikely even that it doesn’t suck, very few people or companies are in a position to implement it.
3) Most people who could implement it are quite happily working on their own ideas, thank you very much.
4) Even if it is a good idea, and you are able to implement it, odds are still against you making a successful business from it – business is hard.
So what’s the solution? Give up?
No, not at all. What you want to do is try and fail. And fail fast. If it helps, you can call it “idea validation”, but have no doubt about this – what you’re trying to do is make the idea fail.
If it’s going to fail, you want it to fail fast – in fact you want it to fail as fast as possible, so that you can learn from it and test your next idea without having sunk too much time.
Testing a business idea is simple. First, you need to ignore what your family and friends tell you. Sorry, but they’re either way too positive, or way too negative for this. You need something a lot more reliable: a potential customer.
Create a working prototype, or a quick mockup. Or just explain the concept verbally.
Take this concept to real potential buyers. Explain it. Ask them for feedback and implement their suggestions. Then ask them to buy. If it’s not ready, make them a pre-sale offer.
(This is not as hard as it sounds – you’ve seen a thousand companies doing this on KickStarter. Book publishers have been doing it for years.)
If no one is biting, you need to change and iterate.
There’s a big trap that you might fall into here (I did): “perfect is the enemy of the good”.
Do not worry about perfecting your product before you expose it to the market. If you wait to show it while you’re tweaking and polishing, you’re wasting time and resources. Speed of execution is key. Being too slow, or worse, stuck in analysis paralysis, will kill your idea and your enthusiasm.
My biggest failure.
SelfAssemblySites was a video training membership site I launched with my business partner in 2011. It was a site that taught website owners how to build and maintain their own websites with WordPress. It had over 100 training videos with how-to’s on every aspect of the process.
If you build it they will come.
MVP (Minimal Viable Product) was the exact opposite of what we did. We took the “if you build it they will come” approach. In fact, our product had bells and whistles with their own bells and whistles. When our competitors had 12 pieces of flare, we had over 100. We had automatic video resizing based on user preference and bandwidth levels, even audio-only versions of all content available to download.
We had a huge forum with subsections and further subsections, most of it populated with great questions and answers relevant to to the topic. We spent a long time on deciding the best ways to categorize and navigate the content. If at any point where there was a choice between me adding or improving a feature, vs promoting the product, we chose the former because what could help sell more but make a better product? (2018 me: “Testing the market, that’s what!”)
This “if you build it they will come” approach had a whole heap of effects and side-effects. One was that we spent so much time on product development that after the eventual launch I was near burn-out and didn’t have as much endurance to stick to it when the going got tough. The delay to the launch meant a shorter “runway” to work with before we ran out of our initial personal investments.
Validate your idea with real customers.
Validate your ideas before betting the bank on them. Watch what actual users do. Start with a minimal offering and add features only where users find value. Expect to make mistakes, stay flexible (and solvent) enough to keep re-iterating until you get it right. Make sure the founders discuss their perspective on how they envision the project going and see if that’s in alignment.
Get more feedback, implement the changes, test the market again. You’re learning a whole lot about the market (and the problems they encounter), the product and yourself all the time. You’ll eventually come to the point where you know it’s time drop the idea and chose something else.
Or you’re starting to get sales and market traction – well done, you have validated your idea! Now it’s time to grow your business.