Start up Business Series: The Idea
Date: 09/06/16 | Author: Sean Toomer | 0 Comments
If you’re thinking of starting a business, you probably already have an idea. Not many decide ‘I want to start a business’ and that’s it and then try and create something. It’s backward. It’s usually an idea they have come up with, maybe solving a problem, creating something new, or simply doing the services of their own field of expertise themselves. Starting the business is the vehicle you use to fulfil that and it’s necessary.
But how do you know if it’s a good idea?
All ideas are brilliant before they are executed. Coming up with a business idea is easy. There’s millions floating around.
Coming up with an awesome business idea that will make money is totally different, and particularly rare. Trying to figure out the awesome from the pants is very difficult, especially from an inside only view. I’d say there are 8 signs that your idea could be a winner:
1. No one else is doing it
This may seem obvious and show your idea is unique, but the key here is to continually evaluate ‘Why is no one else doing this’?
Be warned however, this may not be a strong indicator you’re onto a winning idea. There could be thousands of reasons why it’s not been done before, from impracticalities, not feasible finically, to the damn right stupid.
2. Someone else is doing it, but not like this
You’ve probably heard the expression ‘Don’t try to reinvent the wheel’ and that’s true – the wheel works just fine. But an improvement on the wheel, by adding rubber tyres etc. was an awesome idea.
Not all business ideas are born from total originality, some of the best ideas out there which have made the most money are an improvement or even tweak on an existing idea.
3. It solves a problem
And a real problem, that people know about. Solving a problem is a straight forward way of creating a business and people pay good money to have their problems solved.
4. People want to invest
All start ups need cash. If you ask for it, and your friends/family are prepared to invest actual money – and risk it all – for your idea, it’s likely a winner.
Take this further and get investment from outside your social circle should give you even more confidence.
5. It fills a niche
Imagine a business that caters for men. Massive market.
Now imagine a business that caters for men, aged 25-45, who spend 20 hours plus a week playing role playing games set in the middle ages. The market has now become a very specific demographic – it’s special.
Assuming that specific market is big enough, it could be a good indicator you’re onto a good idea. Niche markets make the customer feel special, because it’s niche to them. That’s why they work.
6. Those you don’t know think it’s a good idea
It’s one thing for people you know to agree it’s a good idea, but those people may not want to hurt your feelings, or crush enthusiasm by telling you your idea is poor.
Get as many people as possible to agree it’s a good idea and that could be a good sign you’re on to a winner.
7. It’s simple
And very easy to understand.
Explain your idea to a child, and have them explain it back to you. If you can achieve that, you’re likely on to a winner.
You need to be able to explain your idea with minimal explanation – people need to ‘get it’ and get it quickly.
You’re passionate about the idea. This is what will be your main driver to make the business a success, to go beyond failure and keep going.
Ask yourself, if you would do this business for free. If the answer is yes, that’s a sure sign you’re onto a winner (don’t do it for free though!).
If your idea can fit some or all of these, chances are it’s a solid business idea and should be explored.
If not, maybe your idea can be adjusted slightly, to fit these better.
What’s the idea worth?
You may believe you’ve come up with a cracker of an idea, that’s going to make you rich, famous and change the world.
However, even if the idea meets our 8 points above, the idea alone is worth bugger all.
That’s because it’s not the idea that becomes a success, but the execution.
If you have a world class idea, but don’t have the recourses/skills to make that idea worth, it’s penniless.
What’s more, even if the idea is totally original, chances are someone else has thought about, or will think about it too.
A friend once told me ‘there is no such thing as an original thought’.
I know this, because I came up with the idea of selling greetings cards online and posting them direct to the receiver – then a few years later, Moonpig etc. was born. And I’m pretty sure the founder wasn’t reading my mind in my sleep.
The point is, even if it’s not true, you’re probably better off thinking so, in order to give you the motivation to get your business started now, before someone else does.
How to protect your idea
Leading on from the above, there’s a hard truth to learn.
You don’t own your idea.
An idea is like a summer breeze; you can enjoy it, maybe use it to power your windmill or sailboat, but you can’t own it. And you can’t steal it. An idea is like a good joke; using somebody else’s joke is not stealing it.
Yes, there are rare exceptions to this rule. The exceptions are that you can patent an invention, copyright a creative work (songs, movies, books, software), and trademark a commercial phrase, image, sound, or video, but I won’t deal with those here. Plus Intellectual property only has value and is protected once it becomes valuable – which will be later once the idea becomes a business.
However, there are many ways you can reduce this. The first is to tell as few people as possible. That’s because sharing the idea is giving it away.
And if you’re thinking, why don’t I just sell my idea? Then you’re wrong, flat out.
It’s not yours to sell. If you don’t believe this, try selling it. Or, try to buy an idea from someone else. You can’t because is intangible, it’s nothing. You don’t sell an idea. You take an idea, build a business, add value, create a team, a process, make sales and gather traction.
But, let’s not give up just yet. If you’ve got an idea, start to execute it. Before doing so, protect it whilst it’s in its early stages.
As I was saying, the first thing you want to do (or not to do) is share the idea. As the idea isn’t anything without execution, someone else can execute it, so you want to tell people on a need to know basis.
Remember, you don’t own the idea, so if someone ‘copies’ it and does it first, they win, you lose.
Speak to the people you trust first, and one at a time. If you need to discuss with professional advisors/investors, if they are legitimate, they shouldn’t be interested in stealing your idea (they make money by lending money/giving advice, not doing the hard work).
When you do tell people get them to sign an NDA (Non Disclosure Agreement). However, be prepared. Some dicey people won’t blink at breaking an NDA – they are difficult to uphold anyway. And an investor will probably refuse to sign an NDA before hearing a pitch. If an investor signs an NDA they’ve ruled out an entire class of business they can make money in.
The general idea with legal bits is, if you can, get whoever it is to sign it – but don’t think if they do you’re safe. It’s not a safety net.
The point to make here is, stop talking, and get on and do it.
What to do now?
Also, look out for our next blog in the series, which will be released next week – Market Research – will your idea work?
Like this blog? Check out our related blog post '8 signs your business idea is a winner'
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