Lesson 1: Ideation
What You’ll Learn: A business is only as good as its ideas. In this section, you’ll learn how to harness the power of ideation, leading you through a series of useful tools and techniques to increase your chances of success by looking at your own potential and finding those powerful nuggets that will quickly rise to the top.
- Narrowing the field
With any luck you should have several spreadsheets by now, each covering a different idea that has its own goal, customers/audiences, business/price models and intersections.
Working with too many ideas from this stage forward is counterproductive. Ideally, you want to narrow your list to the three that are the most promising. Don’t throw the others out quite yet. They may come in handy down the road.
Start by asking yourself some questions related to each main idea:
- Do you have relevant experience in the industry?
- Do you know people who are already in this space that can tell you the advantages and disadvantages?
- How well does the model/customer align with your original goal?
- What is the upfront capital cost to enter the space?
- Is it worth it in terms of the return on the investment?
- How big is the market?
- How unique is your approach compared to your competitors?
A word about the competition: First, don’t be put off by the fact that you have competitors. It’s actually a good sign as it means that the model and customer mix is big enough and profitable enough to attract more than one business to the space. Also, there are plenty of stories about a new player that replaced a dominant one, and this is particularly true as the economy resets itself and is ripe for disruption. Does anyone remember MySpace or Altavista?
As you think about competitors, don’t think too narrowly. If you want to open a Mexican restaurant, the other Mexican restaurant in town isn’t your only competitor. Taco Time, Taco Bell, other casual dining restaurants and even home delivery, takeout and home cooking may also be your competitors.
When you’re done with your initial ideation and have your top three ideas, test them with some friends or colleagues. See which ideas rise to the top and seem to be the most promising. If you want to, stack rank your ideas based on your own passions, goals and the feedback you receive.
Some additional help…
Washington’s Department of Commerce has an excellent tool to help you assess your model and customers. With SizeUp you can run various scenarios to your heart’s content using cost and revenue projections, location, customer segment and marketing strategies as variables. At each juncture, you can dive a bit deeper with associated resources or adjust the numbers until they meet your needs or align with regional and national averages.
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- Time for a deep dive
Now that you have three solid ideas, it’s time to perform additional research.
SizeUp will do some of this work for you. You can use it for each of your ideas to refine your model and confirm the research you’ve done up to this point.
You will also want to talk to potential customers, suppliers and partners. You don’t want to give up too much detail as this point. But you do want to share enough information that you can get some feedback. Talk to people informally, run some surveys and conduct a few informational meetings with key partners or suppliers. Visit some online forums that are aligned with your idea. See what people are saying and what they are complaining about. Learn what’s hot and what’s not and figure out how your idea can fill a void in the marketplace.
Here are some of the things you should ask:
- What is the biggest pain point for your audience?
- Does your business, product or service address it or, better yet, solve it?
- What is the biggest problem with your idea?
- Do the people you talk to know anyone else who has a similar business, product or service?
- If so, what do they think about it? Where could it be improved upon? Where does it excel?
- Do they know anyone else you could talk to that could provide additional feedback?
Spend a lot of time online. Thanks to the Internet, you can do vast amounts of research that was previously available only to large corporations.
Start by looking at potential competitors. Study them intently and remember that there may be additional competitors in addition to the obvious ones. Note who the established players are and the newcomers. What trends or market conditions are changing their respective place in the marketplace? Study the content on their website, watch their sales videos and read their blogs.
Become a good student of their journey as it can help you not only refine your new idea, but offer lessons learned, so you don’t make the same mistakes. As Sun Tzu once said, “know yourself, know your enemy, and you shall win a hundred battles without loss.”
For each idea, think about the necessary resources you will need:
- Physical space requirements, short and long term.
- Machinery and equipment especially anything that isn’t off-the-shelf.
- Local, county or federal inspections and approvals required.
- Initial workforce and long-term workforce projections.
- Specialists that would need to be hired near-term and their general availability in your locale.
- Capital required to start and maintain operations for specific periods of time.
None of these are deal-breakers. Highly successful companies have been started by a single person and $1,000. By getting a bigger picture of what is involved down the road, you’ll know more about what you’re really getting into and can either rescale or rethink your idea before a single dime has been spent. The resources and cost to pursue a specific idea may cause one idea to rise above another. Or it may cause you to change your idea and take it in another direction, one your competitor never thought of.