Is your great idea a great business?
I love this question, and it’s one that I ask almost every entrepreneur I meet with. The conversation that follows is almost always very revealing – not only about the business prospects of the entrepreneur’s product or service, but the entrepreneur themselves. The entrepreneur is sitting thinking they’ve got a 6-figure idea, but then I ask them if it’s a business at all and they’re thinking “What’s up with that? Is this guy stupid or something?“.
Of course, I’m trying to get at the level of market analysis (size of market), market research (market opportunities), and focus group (product/service feedback) they’ve performed. Addressing those three areas tells me if you’ve covered the basics. I’m also looking to see how the entrepreneur responds to the first question I’ve asked them that isn’t necessarily positive – do they get defensive, or do they take the question as a challenge? Their response goes a long way to helping me understand if they might have what it takes to be a success.
So I loved seeing a post with just about the same name as this one, pop up in my “Great Posts” widget on my front page. Click over to the full post for some good insight on how to think through this question. I particularly enjoyed the Harvard Business School quote where the entrepreneurial management professor says most entrepreneurs “overestimate their originality”. Priceless, and all too true.
So how to think through this basic but important early question? Here’s a quick overview of the basic thoughts from the post:
- Do you have a compelling value proposition?
- Do you have a viable market?
- How hard are you willing to work?
Great stuff and questions I ask almost every entrepreneur. Even if you think you have answers, be prepared for some tough followup questions. Too many entrepreneurs don’t put anywhere near enough due diligence into the first two questions. This analysis is so crucial to knowing whether you have a business, yet so many fall into the “if I can only get 2% of this market…” trap.
That third question is critical also. After originality, I find the next thing entrepreneurs greatly underestimate is the amount of time and effort they will have to devote to their startup.
Not every great idea is a great business. Taking some time to fully address the three questions above isn’t a guarantee for success, but it’s a good start. And it will certainly help your first meeting with me go a little smoother…
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