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1.
Make something people want
This seems pretty obvious right? It will amaze you how
many times people produce things nobody wants. Many times we think
‘people’ will want it because ‘we’ want it.
The question becomes: How do I know what people want?
There are different
schools of thought to this. People like Henry Ford and Steve Jobs believe
customers do not know what they want, so there is no point in asking them.
Rather than asking the solution they want, ask them what problems they are
facing.
“Make something people want… There’s nothing more valuable
than an unmet need that is just becoming fixable. If you find something broken
that you can fix for a lot of people, you have found a goldmine.”
If you solve a problem for a customer, they will gladly pay
for it. There is no free money anywhere; you pay your gardener, housemaid,
security guard, driver, consultant, web developer, staff etc because they are
solving a problem for you. The moment they stop solving, you stop paying.
Question: Whose problem are you solving?
Question: Whose problem are you solving?
2.
Market
All Ideas
are not created equal because all markets are not created equal. ‘Market’ is a
very important thing to consider when evaluating your business idea. How big is
the market you are targeting? Everyone drinks water, so the market for water is
quite big; on the other hand the market for natural Christmas trees is very
small (niche). I think Josh Kaufman did more justice to the market subject in
his book: The Personal MBA: Master the Art of Business.
3.
Potential
How
scalable is your idea and what is its growth potential. Will your costs reduce
or increase as you grow? There are certain ideas that are not scalable. An
example of a business idea with a potential to scale is the Nigerian-born hotel
booking platform by Hotels.ng.
4.
Competition
Is your
idea completely original, are there existing players in that space, does it
have the potential to disrupt the market or is it a sustaining innovation, are
you unique in any way?
Contrary to popular believe, having competition or someone already doing an idea similar to your is a great thing. It shows that there are customers in existence willing to pay for that product or service. The best thing about having competition is that you can research the heck out of them, see what they are doing well and what they are not and then plan out a strategy to compete or go the ‘niche’ route.
Contrary to popular believe, having competition or someone already doing an idea similar to your is a great thing. It shows that there are customers in existence willing to pay for that product or service. The best thing about having competition is that you can research the heck out of them, see what they are doing well and what they are not and then plan out a strategy to compete or go the ‘niche’ route.
5.
Capacity
According
to many startup investors, the founding team of a business idea is more important
than the idea itself. That is obviously true because ideas evolve/change
but people generally don’t. What’s the ‘best team’?
“One where
the actions of each team member bring the startup closer to achieving its
vision/success.”- Chika Ikeji, Angel Investor.
Team
members must have complementary skills. You should play your weaknesses.
If your business is a car business (because you love cars), and you know your
idea need a finance/business development skills, those are the skills to
add to your team, and not another car enthusiast.
6.
Passion and Tenacity
What is
your passion level for the idea? I have found many people think they are more
passionate than they really are.
“Spending
money on an idea is not proof of passion; it might just mean you have some cash
to spare.” - Eyinimofe
Any Tom,
Dick and Harry can have e.g. A tech-related idea and begin pouring out money on
a developer to build a website. Passion and Tenacity are spouses.
Passion
says “I’m in love with you and I can’t live without you”
Tenacity
says “by whatever means necessary, I will get you. Even if I have to study you
for 10 months”
“Passion is a heart game… Tenacity is a head game” - Eyinimofe
“Passion is a heart game… Tenacity is a head game” - Eyinimofe
Take
Airbnb founders, when they ran out of cash to fund their business, they cashed
in on the 2008 presidential election hype and created the concept of selling
Obama and McCain cereal boxes. They made thousands of dollars from the sale of
their cereal boxes. Did they manufacture cereal? No. They just
contracted a company to make 1000 empty boxes and they single handily
boxed cereal manufactured by another cereal company. They were both passionate
and tenacious.
7.
Finance
Finance is
a very tricky thing when it comes to evaluating a business idea. Many people
overestimate how much it will cost to actually begin. They see a platform like
Facebook and estimate they will need ‘X’ millions of Naira to build what
Facebook has. They, however, forget that Facebook did not use ‘X’ millions of
Naira/dollars to start Facebook.
Mark Zuckerberg was not the sole founder of Facebook but had 4 other co-founders.
In evaluating your idea, you have to know the difference between ‘what money can bring you’ and ‘what the right people can bring you’. Why hire a developer when you can partner with one. The most important thing at the start of evaluating your idea when it comes to finance isn’t ‘whether you can build’ but rather ‘whether you should build’.
After you have compiled how much money you need to start the business, the next question you need to ask is this ‘how can I get the same result without spending half of the estimated cost. (Tenacity whispers: there is a way, find it.) A lean startup is always the best way.
Mark Zuckerberg was not the sole founder of Facebook but had 4 other co-founders.
In evaluating your idea, you have to know the difference between ‘what money can bring you’ and ‘what the right people can bring you’. Why hire a developer when you can partner with one. The most important thing at the start of evaluating your idea when it comes to finance isn’t ‘whether you can build’ but rather ‘whether you should build’.
After you have compiled how much money you need to start the business, the next question you need to ask is this ‘how can I get the same result without spending half of the estimated cost. (Tenacity whispers: there is a way, find it.) A lean startup is always the best way.
Do not
pursue any business idea without first thoroughly evaluating it.
by Eyinimofe Adeniran
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