Best Idea Ever, or Forget It? 7 Ways to Reality Check a Startup Concept.

How does any entrepreneur know what ventures to pursue, and which ones are best left behind?

learn more about Martin Zwilling

By Martin Zwilling

Opinions expressed by Entrepreneur contributors are their own.

In my experience, consummate entrepreneurs tend to come up with more startup ideas than they can ever implement, and some of the ideas may not even make business sense. But how does any entrepreneur know which ideas to implement, and which ones are best left behind?

After all, most great breakthroughs, like a computer in every home, seemed like a crazy idea before Steve Jobs and Bill Gates made it happen. Now we soon expect a computer on every wrist.

That doesn't mean that entrepreneurs should ignore business and market realities, under the assumption that success is a random phenomenon. Passion, optimism and determination are necessary but not sufficient to assure a successful startup.

Related: Validate Your Business Idea -- Quickly -- With These 5 Steps

Some analysis and due diligence along the following lines should be performed on every idea, as a reality check, before committing your efforts and other people's money to building a business:

1. Look for places where competitors are few. Even if the idea sounds unique to you, it's worth your time to do a few Internet searches using relevant keywords. If you find more than a dozen solutions that loosely match your idea, it may be time to skip that one and try another. Don't forget to consider customer alternatives, such as trains vs. airplanes.

2. Check for intellectual property barriers in your way. These days, you can find existing patents and trademarks through Google and the U.S. Patent Office website without spending thousands of dollars with your favorite patent attorney. Of course, existing patents don't stop you from innovating, but charging ahead into a wall is no fun.

3. Find a recognized billion dollar and growing market. If you will be looking for professional investors to help you along the way, recognize that they expect to see data from credible market analysts on the size and location of your solution opportunity. Look for double-digit growth data from Nielsen, J.D. Power, Frost & Sullivan or others.

4. Separate nice-to-have ideas from ones solving painful problems. All your friends may love your idea on how to find the nearest bar or gym, but how many others are willing and able to pay money for your solution? Even good social causes need to bring in revenue to continue their worthy efforts. Ask domain experts to quantify value for you.

Related: Before You Strike Out on Your Own, Know These 3 Realities

5. Choose projects with financial resources within your reach. These days, you can build a new ecommerce website to sell homemade wares for a few hundred dollars. New smartphone apps cost only a few thousand dollars, if you have the programming skills. Unless you have a rich uncle, it's probably not smart to challenge Intel for the next computer chip, which would require several million dollars in investment.

6. Minimize infrastructure dependencies. Sometimes your solution is impressive, but mass acceptance requires a big culture change, a large support system or government legislation. For example, the Segway personal vehicle was proven technology 13 years ago, but is still constrained by right-of-way laws, liability issues and charging stations.

7. Availability of necessary skills and team members. Most startup projects require special skills and a motivated team. Entrepreneurs with ideas may not have access to the skills required, or the ability to put together a motivated team. A successful startup is more about the right people and the right execution than the right idea.

Despite what you hear from some Internet spammers, there are no slam-dunk ideas that can make you rich with no risk and minimal effort. In fact, from painful experience, every real entrepreneur I know could probably add at least one item to this list of reality-check items. Do your due diligence carefully, and pick the right idea before you start.

Sometimes I have to tell wannabe entrepreneurs that their million-dollar idea is actually worth very little in their hands. It may indeed be better to freely donate your idea to a more qualified entrepreneur or team, rather than foolishly running it into the ground or sitting on it. One hundred percent of zero is still zero.

Related: How Creative Geniuses Come Up With Great Ideas

Martin Zwilling

Veteran startup mentor, executive, blogger, author, tech professional, and Angel investor.

Martin Zwilling is the founder and CEO of Startup Professionals, a company that provides products and services to startup founders and small business owners. The author of Do You Have What It Takes to Be an Entrepreneur? and Attracting an Angel, he writes a daily blog for entrepreneurs and dispenses advice on the subject of startups.

Related Topics

Business News

Police: 82-Year-Old Woman Found Alive at New York Funeral Home After Being Pronounced Dead

The woman was found breathing almost three hours after she was pronounced dead.

Business News

Disney Will Layoff 7,000 Employees to Save $5 Billion in Costs. "I Do Not Make This Decision Lightly," CEO Bob Iger Says.

The announcement, part of a massive corporate restructuring effort at the company, caused shares to surge.

Business News

An NFL Rookie Scores a $514,000 Jackpot in Las Vegas

Los Angeles Rams running back Ronnie Rivers sat down to play 3-card poker and left a half million dollars richer.

Innovation

The Greasy, Glamorous Rise of Mascara

You won't believe the grimy gunk people used to smear on their eyelashes -- and still do.

Business Ideas

How to Make Thousands of Dollars on the Side As a Virtual Assistant

Apply your skills and experience to create a lucrative virtual assistant side hustle or full-time business.

Living

Invest in Yourself: 10 Things Every Working Woman Should Do This Year

When striving for success, it is easy to forget about your mental and physical health. But without health, you cannot fully succeed. Follow these ten lifestyle strategies for success in your personal and professional life.