How To Figure Out If Your Idea Works?
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When John F Kennedy announced before a special joint session of congress the bold and dynamic vision of putting a man on the moon, he had refrained from formulating the exact means by which that vision could be achieved. He allowed the creative input and interplay of the scientific community to participate in making that vision a reality. Of course it is all seen in the context of the backdrop of cold war with the Soviet Union, but that’s what entrepreneurs do. They seek opportunities to innovate in adversities and meet the demands that the economy needs. They disrupt existing practice with newer and evolved ones.
Successful entrepreneurs are motivated by purpose. This generation is motivated positively towards thinking outside the box. These creative ideas either are driven towards making life interesting and fun while others are driven towards saving lives. More often than not you see someone coming up with business ideas that are so simple yet so brilliant that you kick yourself for not thinking of it in the first place!
But as the expression goes, “Ideas are a dime a dozen. The money is in the execution”
How do you know if your idea works?
It is a common rule of thumb in business that 80% of the targets are achieved by 20% of input, put forward, of course, by the infamous Pareto principle. ‘The richest 20% of the world controls almost 80% of the world’s income’, ‘80% of the sales come from 20% of your clients’ and so forth. This is a good thought to keep in mind because it is common knowledge in Economics that the more a plausible theory makes sense, the greater are the chances of it being tested cheaply. However, the 80-20 rule is a shorthand for general principle at work, it can be applied to decide on a venture that seems plausible to an entrepreneur with a vision; of course you would have to factor in the necessary data that supports the plausibility factor.
Technology industry has the history of great ideas put to application by two guys in a garage or a singular mind thinking in the quiet of his morning calm of the toilet bowl. The only way it will work is that they are not the only two people in the world to want the technology!
So ask yourself when you have an idea-
- Is it cost effective for consumers?
- Does it save time?
- Does it render a simple message?
- Is it doable?
- Is it scalable?
Inflexibility will be the death of your firm!
It is important for an entrepreneur to delve into the frugal and flexible mind-set in order to practice the art of addressing market constraints. Debilitating challenges are ever present.
A firm’s inability to think and act flexibly in response has complacency to established formulae, binary logic and aversion to transformational risks to blame. Everyone remembers the infamous clip of Microsoft CEO, Steve Balmer laughing off the threat posed by the iPhone in 2007. Years later when Apple was the most valuable company in the world, he confessed his regret by explaining that that their formula in mobile software business was working and that it was a too huge a religious transformation to undertake. He just didn’t know it would be short lived!
Scalability is insurance
It was only last year when I started a conversation with a taxi driver who wanted to make a transition to Ola or Meru - whichever offered better pay. On demand Taxi aggregators whose business model is basically to connect customers through tech platform and an app being the front - all of it without owning a single cab! The business gig is highly scalable because it is cost efficient and the burden of owning, maintenance and licensing of the cars rest with the driver. Now this singular idea originating from the west has grown to a scale where it is a threat to the existence of the traditional and radio cabs, so much so that the aggregator sector is well on its way to hit $7 Billion by 2020!
Any entrepreneur faced with such serendipitous timing of opportunities should be capable enough to recognize the vision it allowed and get to work on the means to make it happen. Refining and streamlining all the potential roadmaps should be explored immediately and plans should be made not one years, two years but ten years down the line. Every market has a choking point. It is wise to recognize when.
Idea to Impact
As an entrepreneur I always try to link an Idea to the big impact it can create. I go over it again and again to be fully convinced about the big Impact.
Of course, the big impact need to be translated into an actionable plan. The key ingredients that I look at:
a) What’s the beachhead market where the idea can be tested and refined quickly?
b) Identifying right customer segment. It’s extremely important to narrow down the customer segment in the early stages of Idea development. This helps in creating a sharp and focused product road map.
c) We as an organization have believed in try fast, fail fast approach. It’s extremely important to get early feedback from Market.