IT MAY SEEM EASY enough to come up with a business idea, but how do you know that you can actually test it? How do you form an idea so that you can talk to other people about it? How do you even come up with that first idea?
Make Sure Your Business Idea Is Worth Pursuing
Business ideas are all around us, it’s just a matter of finding the pain point that a customer segment is having and coming up with a solution. When you’re coming up with your business idea, it is important not to force it. Let it come to you naturally, and make sure that you’re committed to pursuing it. Keep it simple, have a single pain point that you want to solve for your customer.
Don’t force your business idea and don’t overcomplicate it. Focus on a single customer pain point, a single problem to solve.
Now that you’ve had your idea, you need to start talking to other people about it. This is a critical point in figuring out whether your idea is worth pursuing. But how do you form the idea so that you can speak to other people about it?
You have to keep it simple. If you can’t communicate your business idea in under 15 seconds, you have to keep working on it – keep drilling down and make sure that you understand your idea better than anyone else in the room.
Figure Out How to Express Your Idea
Forming your business hypothesis is a critical step in creating the idea and communicating it to other people. I had a friend introduce me to two different formulas for expressing your idea, made famous by the accelerator tech stars.
Do you know how to express your business hypothesis? It is crucial to communicate your business idea.
The first, you say we solve [X problem] for [Y people] by doing [Z]. Fill in for each of these variables until you can communicate what your business does, who it does it for, and how you accomplish it.
The second formation of this is saying we use [X] to solve [Y problem] by means of [Z]. It’s a slight variation on the first, but the principle holds true – what are you solving, how are you solving it, and for what people.
Get Feedback From Your Networks
Now that you’re able to express your idea it’s time to start having initial conversations with people.Go to your friends, your network, and your family and start asking them basic questions and getting feedback about what they think.
Go tell your friends about your business idea! Ask questions and gather some precious feedback.
If you’re unable to have conversations with your closest friends, then you’re not able to have conversations with your customers. Getting this initial feedback is critical to figuring out whether the idea is worth moving forward with.
Will People Pay For Your Idea?
So your initial conversations should really focus on a couple of things: what do people think of the idea, and more importantly would they pay for it?
Now a common mistake, and this is just one example, is people ask ‘how much would you pay for this product?’ Instead, rephrase it, get better information. What’s the maximum you would pay for this product?
Figuring out whether people would pay for the solution that you’re willing to provide is critical with coming up and figuring out if your idea should move forward or not. It’s important for me to say that ideas are not companies, companies are built around ideas. Don’t think about starting a company, think about testing out your idea. You want to take your hypothesis, start speaking with people, and get that valuable feedback.