An analytical checklist to make sure you have a killer concept
You’ve finally decided to become an entrepreneur, congratulations. You want to do that but do not have a business idea. You are waiting for this fantastic idea so that people in ten years will ask you, “How did you come up with this great idea?!”
Then you’d say, “It came to me in the shower.”
Then the world would do a standing ovation, and you wake up from the dream.
I know numerous people who always tell me that they’re waiting for that killer business idea that they’ll just keep to themselves. It would turn them into easy millionaires (Damn it, Zuck, you ruined our future entrepreneurs.)
For starters, Mark Zuckerberg stole (or renovated, it does not matter) a business idea and turned it into a product of a lifetime. But the sentence above makes one look at the first part and forget everything after the “and.”
He turned it into a product of a lifetime, and that’s the real challenge.
However, let’s get back to you. As per my business consultancy career, several clients get on calls with me to ask me, “What do you think of this business idea?”
Before I go on, there is one thing you should know and pin somewhere — Not I nor anyone in this world could assess whether your business idea is a unicorn. The most knowledgeable “experts” always make mistakes.
That being said, let’s move on to the analytical checklist I go through with some clients to aid them in perfecting their business idea.
I am kidding; if Uber and SalesForce could make it, even if you call your startup UltimateBananas, you have a shot (But do not call it ultimatebananas.)
This is my ABC of the conversation. I ask them, “Where is your market research?”
“But Steve Jobs said we don’t need market research to know a product’s need and that the customer does not know what they want.” (Damn it, Steve, you also ruined our future entrepreneurs.)
Steve Jobs had a million-dollar firm that had buying customers. You have nothing. Again, “Where is your market research?”
So stage zero is simply conducting killer market research. Always think from a customer’s point of view.
For example, if we are thinking of this business idea —creating a luxury clothing brand for pets. Then you need to state any possible question you could think of.
- How many pets are there? Are they growing in number? Where exactly?
- How many pet outfits were sold this year? Last year? The year before that?
- How is the customer spend on pets?
- What is the biggest clothing brand for pets? Which pets? (I doubt you can get a shirt for your pet snake, for instance.)
- How do pets react to shirts? Is it healthy?
- Do buyers, or pet owners, like luxury associated with their pets? How many of them feel this way?
These are just a few questions I could think of. You’ll need to expand them and use your friend Google to find answers to those. Do not forget to use valid sources like Mckinsey’s market research report, for example. (Rather than Wikipedia or Statista)
Also, remember that any projection does not have to be correct. Tons of market research reports online showcase projections till 2026 or 2030.
So when you see such a market research report, even if by Deloitte, that says luxury outfits for pets demand will keep rising till 2050 to $7 trillion, don’t just say, “Well, they said it. It must be true.”
This whole stage serves to answer questions and help you mold your business idea. So you will have to be open to the conclusion that your business idea simply might not have a market.
Study the competition, and understand what you’ll do differently. This is highly determined based on what you want to achieve from your business. For example, some clients come to me with the idea of PayPal (The same exact idea), but in a country where PayPal does not exist.
In that case, you need to be aware that you are not a pioneer in the industry. However, you are still qualified to build a billion-dollar company (Ask Lyft)
Can you help thousands of people (or pets) simultaneously? This is vital when you’re looking for a widespread product. On the other hand, if you’re only looking to create a simple successful business, sometimes scalability does not matter.
Legality is essential whether you like it or not. Uber had to go above and beyond to bypass a lot of legal gray zones. Learn from their experience and build something that is on the permitted side. Additionally, how people perceive your product is crucial.
- Is it healthy? Does it improve their lifestyle?
- Is it environmentally good?
- Is it violating their privacy?
For instance, say you had an idea of starting glasses that are smart, and your name was Google. That sounded like a fantastic business idea. But society did not feel comfortable with such a product being around. So, it simply vanished.
Me: “Let me get this straight. Your business idea is a company that creates rockets and uses them for commercial purposes while reusing the old rockets?”
Me: “Okay, how much money are you putting into this?”
Person: “Well, I have a starting capital of $10,000.”
Me: “Perfect! Hire someone to architecturally draw a rocket for you, then hang this above your bed. Create another business that would make you a good number of billions. Then start this company!”
Elon Musk started a space company when he was pretty wealthy. If you are thinking of starting a rocket-building company, then you have the following options:
- Fund it yourself if you have billions to spare.
- Ask for funding, and you’ll probably not get any because of your success record and the amount required funding.
You need to be realistic in your thoughts. For example, how much would it cost to build an MVP for your killer business idea? If it’s a reasonable amount that you can invest or pool around some money to achieve, then that’s okay.
Yet, if you think of building houses on Mars, come down to Earth and think smaller.
Be honest with yourself.
- “I want to create a company to become filthy rich in 5 years and retire by selling it to a giant.”
- “I want to build a company that impacts billions.”
- “I want to create a company to become financially independent.”
Whatever your objective is, it’s vital to keep it in mind. This will be your “exit strategy,” per se.
Starting a business without a final goal is similar to walking around the desert with your eyes closed. You will never reach a destination.