Developing Successful Business Ideas

The recent shift in the mindset of young professionals has resulted in an increase in the number of people who aspire to be entrepreneurs. One concept that is understood by anyone daring enough to consider leaving their formal Job to become an entrepreneur is the fact that they need a good idea. While this is barely half of what makes entrepreneurial ventures successful, it is a key ingredient if anyone is to stand a chance to compete with existing, well resourced companies and other small businesses that are as driven as you may be.

How to come up with good ideas

Even though a quick Google search can bring up list of the best business ideas from which you can choose, it is important to understand the concept of idea generation based on a study of successful businesses and insights from professors of top business schools like Wharton. The key factors to consider when coming up with ideas are as follows:

• What need in the market have you identified
• How large is the core market and the total addressable market
• What competitive advantage do you have
• Who are your competitors

These few questions, if thoughtfully considered can save a lot of time that might be spent developing bad ideas that would not be successful. In addition, these questions are important because they also help guide your idea development process once you do have a good idea and that will increase the chances of the success of the product.

Having said this, it is important to note that the best ideas are those that , instead of having been looked for, come to you as a result of gaps you have seen in the market. These gaps could be inefficiencies you have noticed at your work place, a difficulty you experienced while performing tasks, doing hobbies or interacting with the world. The main point here is: if your idea stems from a need you see instead of a Google search, there is an increase in the chance that it is actually needed by a broader market and you would be the best person to implement it.

A notable example is the fact that the founders of Airbnb came up with the billion dollar idea as a result of realising that there was need for more accommodation in San Francisco because most hotels had been booked to capacity due to a business networking conference that was taking place. After having successfully hosted some people on air mattresses in their apartment, they realized that this could be a scalable business model and the rest is history. It is important to note that this happened while they were ‘trying to come up with a good idea.’

The takeaway is great ideas are not necessarily a magic thought that might strike you, they are in front of you everyday if you pay attention and look at the world through the lens of a problem solver.

How to choose the best idea to implement

If you develop the problem solver lens, you might come up with a number of decent business ideas. Considering that your time and resources are limited, pursuing multiple ideas at the same time is usually impossible and not advised. It is therefore important to devise a strategy that has a high chance of success and will also provide a high reward for your effort. Complex strategies are used by corporations to choose projects to use resources on but as an entrepreneur, the following method is a good guide or at least a good starting point.

Rate your ideas using 3 important matrices

• How difficult is it to implement the idea
• How long will it take to go to market
• What will be the return on my investment

This simple system will clear up your judgement and help you understand each of your ideas objectively. The next step will be deciding which ideas to avoid, which to implement and in what order they should be implemented. Some ideas may be building blocks of other ideas in terms of the technology used or the business intelligence and data obtained. The main aim is to ensure that decisions are based on objective assessments instead of an emotional attachment to your ideas.

Decisions should be data driven

This is important at any step of the product development process and at any stage of a business. It is important to note that even if an idea stemmed from an actual need in the market, it is still important to obtain as much information as possible from the target market so that you can verify your hypothesis and shape your product to solve the pain points of the broader market. Interviews, surveys, questionnaires, existing Data repositories etc., are some ways of collecting valuable information that can ensure the success of your product or service.

Final thoughts

It is important to ensure that the ideas you choose to implement have been tested rigorously and decisions are based on hard data. It is good to be in love with your idea as long as that does not blind you to what the market says and what the data reveals. Letting go of a bad idea early is better than expending energy and resources and getting nothing out of it. That being said, avoid ‘paralysis by analysis’ and ensure that you begin implementing your projects as early as possible. Create a Viable Product and get it into the hands of your customers. That is when true product development begins.

Golden Arc Consulting