How to choose and evaluate a business idea, what promising niches exist, and what you need to think about when creating and developing a business.
At the beginning of the journey, entrepreneurs often mistakenly focus on the business idea. But an idea by itself is not worth anything – what is important is that the idea solves the customer’s pain, for which they are willing to pay you. Problem interviews exist to identify those pains.
Conduct interviews with potential customers to discover the problems on which your value proposition will be based and the target customer segments.
Important: Gather information first and use it to propose a solution – not the other way around.
The views and opinions of potential customers give us nothing. What provides valuable information are specific things and events that have happened to them in the past.
You should start by selecting your customer segments and making a list of hypotheses.
We segment the customers:
- By needs, motives, or problems;
- By demographics;
- By industry and profession.
2Principles of Business Idea Selection
Do not try to find the perfect idea. You need to find an idea that you are ready to do in the long term and which has a large potential market.
Any business idea is a development of the accumulated experience of its author, a combination of already existing knowledge. There are specific mechanics for generating business ideas, but any technique is superimposed on the person himself and the limitations of his current knowledge and skills.
It is better not to try to create something radically new, but to focus on the already existing – large and preferably growing – market with regular purchases. And find a way to offer customers more profitable alternatives to traditional solutions: cheaper, more convenient or more effective products, including through the use of high technology.
A stall around the corner and an international company are equally difficult to build, but a large-scale idea can attract large-scale people.
An idea itself is nothing without the willingness of the founders to implement it.
Any business idea in its initial form will be almost doomed to failure without further evolution in the course of market testing. Successful business ideas are born as a result of their authors’ work on the development of their original, less successful ideas.
Being able to give up ideas is just as important as being able to look for them.
It’s important to remember that an entrepreneur’s brain needs a regular reset to make room in it for new ideas. The best ways to do this are meditation and sports.
3Checking out a business idea
Every business starts with an idea, but aspiring businessmen on the imaginary journey from “million-dollar idea” to investment very often:
- Overestimate the importance of the business idea itself – much more important is its implementation;
- Do not pay enough attention to the analysis of the market they are going to enter;
- Skip the stage of testing the idea for viability.
4Principles for evaluating a business idea
The quality of a business idea is a combination of two parameters: relevance to the market and relevance to the founders of the project (competencies, ambitions, interests, life goals, and values).
The validation of business ideas should be based on measurable indicators or ML-powered strategy analytics.
No mechanics of evaluating a business idea will give a one hundred percent guarantee of business success or failure.
You can’t fall in love with your ideas. They are the only possible tools to achieve life’s goals. In the end, it’s their implementation that decides everything.
During a crisis, it is possible – and sometimes very necessary – to open a new business. One that will, for example, help people cope with a difficult situation. Or an existing business adapting to the crisis. Entrepreneurship means taking risks and taking responsibility – it is better to count only on yourself.
Entrepreneurs who are just starting out may want to consider teaming up with other newbies to discuss who-knows-who can be useful and how to optimize costs for two or more companies. Who knows, perhaps such joint work will yield unexpected synergies.