We all have creative ideas. Very often, when friends dine together, out from all the laughter, we sometimes find ourselves coming up with innovative ideas to solve a problem. Years later, we may see successful business that implemented similar ideas and then we knock ourselves and say “Oh! We had that idea long ago. If only we had started a business doing that!”
Throughout my career, I had the opportunity to work with many start ups. Many did not succeed. Few did. What makes some business ideas flourish while others fail? What are the mistakes that people make while turning an idea into a new business? In this blog post, I will share what I have learned from the many startup companies and what are the tips to launch a new idea successfully.
Tip #1. Do not wait for an unique, perfect idea with no competition
Do not waste time searching for an idea that no one else have implemented. Very often, I have heard clients saying very excitedly to their business partners about an idea they had, only to have an answer like ” Oh.. that’s not new, I know of company X doing that”.
Do not be discouraged by such response. In reality, there is no business without competition. For example, when you do a search online for Helpdesk tools, you will find there are so many. You can hardly find a software vertical withou any competitors. So how do all these businesses thrive?
Recognise that a great idea does not necessarily lead to a successful business. What matters most is the ability to differentiate your product and communicate your value proposition that customers want as well as build a business model that works. And you can achieve all these not with the business business plan that you work out. You perfect it along your learning journey.
So the solution is to get started. Sure, there may be some companies already offering similar products and services. The fact that you think you have an idea, it can mean the following:
- Current industry players are not offering a solution good enough to meet the needs of customers; and/or
- The market is large enough and existing players are not able to serve the entire market; and/or
- Current industry players are not doing enough marketing to make their solution known and this means if you do well in marketing, even if your product is not as superior, you may may do even better than your competitors.
Your idea is worth a try. Get started by gathering information about potential substitutes, and conduct user testings to know what customers want and ask yourself how you think your idea adds value. Build your prototype, have a phase where you test your business model potentials. You will learn as you work along and you will tweek your product as you evolve through the testing phase.
Tip #2. Focus on Customers, not simply on Technology
When we are embarking on a new business, it is natural that we will think of the enabling platform. If we are not a technology geek, we will be worried about HOW TO make the solution possible. Many startups sink all their resources on how to build the capabilities. Years ago, I met a business owner who told me he had spent four long years and resources on developing an encryption device. It was a very innovative product when he presented it to me. I had not seen similar products. Yet, after four years, he was just about to think how he can get the customers. To make matters worse, instead of investing in sales personnel to build channels and advertising to promote his product, he was looking for people to market his product and be paid only when they are successful. That’s a very low priority on sales and marketing! Of course, before long, new technologies make that product obsolete and he lost the window of opportunity.
In reality, it is easier to develop a new product than to get customers to want your product. What makes your business successful is the latter– getting customers to know and to want your product. Being able to develop a new product does not bring you any earnings until you can bring the product to market and get customers to like it.
Once you decide to give your idea a try, and start your product development, you should start with prototypes and start testing the market even before you waste your time developing any marketing or business plan. This is when you can get insights into the product potential. Do not waste time thinking about how to build the perfect product. Focus your efforts on understanding what customers want and build it for them. Let your potential customers, partners, investors tell you their views. So, do not fall in love too deeply with your first idea or with the technology. Be prepared to adapt your products to what best serve your customers. With the information you gather about what customers want, build your marketing and business strategies around customers.
When Iphone was launched, people were queuing to buy it. When Instagram was launched, people were queuing to sign up. You should know now how they achieve that?
Tip #3. Build a workable business model rather than perfecting the product
I have worked with several startup software companies. Often, they were busy developing the product. Investors may be intrigued by the innovation and start to invest. It is very interesting that there are investors who invest even before there was a workable business model. Many companies were providing free services to get mass number of customers to sign up, hoping that they can earn through advertising or simply by selling the company with a huge customer base. Not many company can succeed in this manner though we may hear that social media platforms such as Facebook had succeeded.
If you are serious about making your business succeed instead of wasting away investors’ seed money, even when you are developing your product, you should be developing your business model. During the prototype period, you can test your business model potential, decide which is your target customer segment and what to charge. With the prototype testing period, you will know when your product is ready for the first launch if you already have a business model worked out. Remember that if you can get a workable, no-frills product that can solve your customer pain-point, you are ready to launch. Do not try to perfect the product. You need to launch the product to know if your business model work.
Tip #4 – Timing
A great product, particularly technology products, launched at a time when users are not ready to embrace the new way of doing things can pose great challenges to your new business. You may end up having to invest a lot into trying to change user behavior and that only gives time for competitors and substitute products to come in.
Products and businesses flourish because customers like the products and buy them. Without customers, your business will not flourish. Everything begin and end with the customers. Hence, before you even embark on the business, while prototyping and gathering customers’ feedback, you will be able to assess if the timing is right. If the timing is not right, and especially if your budget is low, do not waste money going into that business.
If you have an innovative idea but you feel that the timing is too early, what do you do?
In my opinion, one of the most important thing is to know what customer segments your product is serving and look to how you can draw this customer segment to be your followers.