When can an 'Idea be considered as a 'Business Idea'

When can an ‘Idea’ be considered as a ‘Business Idea’

So, in my day to day life if I used to come across a problem which I thought many others like me are facing, I used to think of a solution for it. The moment I could think of a solution, I further used to think as to how can it be implemented. On getting a decent answer, I used to consider it as a business idea and some times even business model/plan

If you think the same way, go on reading…

Note: 

1. The following is just my understanding; it may be right, wrong, or incomplete. I am writing what I am learning and will keep on updating.
2. The following content is extremely brief and do not cover the entire explanations. If you feel the need to discuss any one of them, please feel free to comment or come in touch.

Much of the following learning is from Kunal and referred from the book – Product Design & Development by Karl Ulrich

So, The ‘problem’ we referred above is basically a ‘market opportunity’; solution – ‘concept’; implementation - ‘concept execution’; the process – ‘some parts of product development’ and business idea/plan/model – ‘Getting lucky’

One simple reason is - The entire ‘thing’ is based on gut feeling and assumptions.

Have a look at the following steps –

1. Assess the market opportunity

• 1. Interview user, lead users and document their experiences of the current scenario.
• Their frustrations, complaints, what are they happy about, what are they looking forward to.
• 2. Consider lifestyle, demographics and technology variations

• Ethnicity, financial background, demography, personal background
• 3. Carefully study competitors’ products 

• Don’t stop at google search. Ask your users about their information channel to get an idea of your competitors

Result – Mission Statement, defining your business goals (complicated, will discuss in upcoming blogs), market segmentation, assumptions and constraints

2. Concept Development 

• 1. Identify Customer Needs of your target market segment 

• For example - you are working on a softwar then 2 of the customer needs can be -

• easy to customize
• Free

• 2. Prepare a Customer Need Metric and divide the needs into primary, secondary and tertiary

• Primary – Free – 4/5 (In metric)
• Secondary – Easy to customize – 2.5/5
• 3. Make target specifications as to what should be at least there in your product/offering

• Revenue model should be to support free
• Platform should be php based to support cutomization
• 4. Start brainstorming and propose all possible solutions i.e. generate concepts

• 5. Eliminate one by one very very carefully, until you reach to the most suited concept. Do trade offs in accordance to your mission statement and customer needs.

Result - What you now have may be considered as a business idea.

There is a lot to be done before you reach the business model. You can consider the above just 10% of what it takes for product development or a business plan.

Tips –

1. Refer to someone who really understands people well for designing your interview questionnaire. This should be completely independent of the ‘concept’ you have in mind. 

2. Bring in a consultant, a highly experienced professional of that domain in the concept development stage. Consult - Competitor study, market opportunity, market segmentation, concept generation from him and also verify your ground work / study with the same.

Some FAQs for the above –

1. Why do I need to assess the market opportunity when my gut feelings are generally right and very strong?

Because, even if you are right it is important to know what is market segment and define it. Down the line during execution you will realize that you burnt a lot of energy because you did not position your product right

2. Why is market Segmentation required? Everyone associated in that domain will need my product?

Never can be a case when your product can suit just everyone. You have got to be focused and understand who is your centre of focus while working on your business.

3. Why do I need to make the customer needs metric.  I know what all they need, isn’t that enough?

While executing your plan, you will several times have to make trade offs where one need will have to be given priority over the other. If you do not prioritize customer needs, you will always be confused.

4. Why do I need to look at other solutions when I know mine will solve the purpose?

Sometime down the line, you will come across a competitor who has adopted the other solution. You will not get confused at that time because you know why you did not pick up that one. You need to be absolutely clear on ‘Why not blah blah’. You should be heading steady and strong.

5. I already know that my idea is a good business idea. People are already earning from it, I am going to execute the same in a better way? Ex- Software Company, Retail Shop

Sure! Go ahead, but that will only be a lifestyle business, never even think that you will consolidate and become a millionaire from that

6. I just want to earn short time, will take an exit after earning some money, then why all this?

'Business' is not short term, u r basically looking for a jackpot, chances of which are one to hundred or even less.

7. There are so many business I know who didn't do the above, yet they are super successful, how?

They were just at the right time at the right place. That is not called 'business'.

Future Work –

I will be trying to write blogs on each of step mentioned above explaining through examples.