We’ve all experienced it. The adrenalin pumping through your veins when you think you’ve just discovered the next big thing. You could be walking down the road or in the shower when it smacks you in the face and you have to rush to write down your genius idea.
Then the adrenalin leaves your body for a moment and you have time to think about whether this truly is a great idea or not.My father is an ideas man. We would drive through the streets when I was a kid and he’d say that a McDonald’s would be great on this corner or a laundromat would work on that corner. Then months later, those things would pop up and thrive.
Ideas are great but they’re free and easy to come by. It’s the building that really matters. So what should you do when your billion rand idea hits? Here are some things I do when I think I’ve got a great idea on my hands.
Before you tell anyone about your idea, before you spend any money on developing any part of it and before you even expand your thinking around the idea, go and search the Internet. Open up Google and type in any related search.Find any adjacent industries, similar companies, people or places that might have already done what you’re wanting to do.
The sad and difficult truth about coming up with ideas is that very few are new.That’s not to say that your idea isn’t new and unique but it may not be, so do your research. One of the valuable things about researching your idea is that you see if you have competitors, how they do things and where they might be lacking or defeating your potential business or idea.
When I decided I wanted to start my sock company, NicHarry.com, I already knew who my competitors were because I was wearing their socks and disliked them immensely. I did more research and found out what it took to design, make, sell and distribute socks.
Think through the business
A huge mistake that I’ve seen people make is thinking that an idea is a business. It’s not. Wanting to start a sock company and designing, making and selling socks are two vastly different things. One involves thinking about how cool something could be. The other involves a lot of planning, strategy, foresight, hustle, capital and struggle in between.
Thinking through how your idea might one day make money is an imperative step. Are you going to patent the technology and licence it? Are you going to produce and sell it yourself? If you outsource production what will your margins look like and can they sustain infrastructure?It may seem premature, but sometimes good ideas break when you try to turn them into something more.
Size the industry
Work out how big the potential pot of money is. Are you fighting to build a business in an industry that is worth R10 million? If you’ve already got ten competitors in the space, you’re fighting to take away some of their market share as well as grow your own.At best you stand to earn R10 million if you take out every competitor. That’s great, but it’s a long battle for a relatively small industry and potentially smaller profit margins.
Build a simple version
The fun part of any idea is building and creating. So once the research is done, the market sized, you’ve planned and prepared how you want the idea to roll out, it’s best to just go ahead and build something.Don’t go crazy and start funding this from your life savings just yet. You need to operate in a lean manner. The Lean Startup describes the concept of a minimum viable product (MVP). Build the smallest and simplest version of your idea to test the basic premise and see if anyone wants to use it or buy it.
Test the three Fs
The final phase of working out if you’ve got the next best thing since Facebook is quite simple; try to sell it. When I start a new business I always use the three Fs as my first market: Friends, Family and Fools. Your friends generally want to help you, your family has to help you (but if they don’t, that’s a big indicator of potential problems) and then try to find people foolish enough (in a good way) to pay for, or just use, your new idea or product. If none of those work out, it probably means something.