Starting a business is never easy. Finding that place where your business is positioned for growth might take some time. Some entrepreneurs are lucky enough to discover a sweet spot from the get go but others might have to work harder at it. This means an entrepreneur might go through various business plans before he/she finds the right product/market fit. Statistics states that approximately 5 out of 10 businesses fail. I like to think of it as about 5 out of 10 ideas were never suitable to become a business in the first place.
Businesses do not enter the growth stage until a product/market fit has been discovered. Once the product/market fit has been discovered, the entrepreneur would need to pull together all resources to effectively serve the market.
Validation – can you get people talking about your idea?
Before scaling, it is important to validate your idea. In other words, you will need to get enough people to talk about your idea. At the beginning of your entrepreneurial journey, I recommend starting with a very rough business plan with general ideas of where you want to go and how to get there. This involves finding the right business model that generates assets for your business. It is guaranteed that your plan will change many times.
A business exists to increase assets, a business model exists to bring in customers and the entrepreneur exists to manage the relationship between the two. If the entrepreneur does his/ her job well, he/she gets rewarded with profits.
If the market does not validate your idea i.e. if you cannot get enough people talking about your idea, feel free to test various concepts for a good till you find one that gains enough momentum. You might have to go through various iterations of a concept or sometimes drop a concept all together and test another before finding one that will be successful.
Below are some suggested steps in finding a potential successful concept.
Steps to choosing a concept for execution
- Maintain a database of opportunities: A database of opportunities is a list of potential business ideas. Before getting married to any particular idea, be sure to examine your ideas. The goal is to find an idea that is most likely to succeed in the market place.
- Test it at minimum cost and see how the market responds: Some concepts will only need modification while some will need to be dropped entirely. If the concept totally flops the market test, then drop it and pick up the next idea in your opportunity database
Have a time and resource limit for each project: Only focus on one opportunity at a time and be sure to limit your time and resource budget. If after various iterations you do not gain momentum (have enough people talking about the idea), then move on to the next one. Spending excessive time developing a product no one will buy is a waste of time. A business will always eat up all resources you allocate to it and more. This is why planning is essential if you want to get the best return for your investment. Get your minimum viable product out there, test the market. Trying to control the market to fit your product does not work. Just because you believe your product is the best solution, does not mean everyone else believes it.
Remember fail fast and cheap. Some ideas might become successful just by tweaking a concept, while others will require dropping it entirely. Your job as the entrepreneur is to create customers and not products.
People become entrepreneurs for various reasons, some just want to make a little extra cash, why others want to get as big as possible. Your market size should be big enough to accommodate your goals. You should start by analyzing to see if the potential is big enough (see worksheet).
Once you have an adequate market size, go ahead and start the validation process. Here is a good article to help you validate: https://www.shopify.com/blog/15153597-5-strategies-to-validate-your-product-ideas
In validating your ideas, be aware of the following:
Over analyzing: just do it, if it does not work get up and try again
Needing the perfect structure before starting: I meet entrepreneurs that want all i’s dotted and t’s crossed before starting their venture. However, I do not advice doing this before you have a scalable concept.
Go cheap at the beginning: Do not spend tons off money on resources or building the perfect website, logo or product design. Taste change all the time. By the time you are done with the design you already have regrets over the design you chose. So, focus on what is important which is getting customers.
Do not get married to your ideas: Some ideas turn into great businesses and some are just not meant to be. Just because you think it’s a great idea, does not mean everyone else thinks so.
Once you discover what works, you will need to turn your good concept to something great. That is given your chosen niche, what will it take to be the best at what you do. This takes discipline. It is so much easier to move from one idea to the next than to stay steady with one vision and see it through. A visionary entrepreneur will look to build value and not just income from his business. His/ her vision is not just a bunch of high sounding words but impactful words that can be broken down into measurable parts.