It is a lot of fun coming up with ideas for new businesses. By comparison, actually building a business is not quite as fun. I’ve heard before that everyone comes up with 1 million dollar business idea every day. Who knows how true this is, but the sentiment is valid. Ideas are easy, plentiful, and generally low hanging fruits. For some reason, most conversations I have with people I meet end in them talking about their amazing business idea. There is nothing wrong with having great ideas for world changing businesses; in fact it’s a prerequisite to actually creating that business. But the idea is really only about 5% of what you need to actually create a business. Just because you have an amazing idea to combine Pinterest, Foursquare, and online poker, doesn’t mean you are a few phone calls away from a profitable business.
To actually turn your ideas into millions, it will take some work. However, it actually takes a lot less money than you think. Did you know Dell computer was started with only $5,000? In fact, If you do a few specific things right after you come up with an interesting idea for a business, you can leave the dreamers behind and start making tangible progress.
- Capture. Write down your ideas the moment you have them. Ideas are shy, they are easy to let slip away. Since inspiration can strike anywhere, keep a notepad or a place in your smartphone to store ideas the moment you come up with them. Write down as much detail as you can, and maybe even create a voice recording explaining the thought process behind the idea.
- Record. Within 24 hours of having the idea, write a paragraph or so explaining your vision for what your idea could become. This is not a business plan, it’s a few sentences. The reason for doing this is to capture the idea and turn it into something that is coherent.
- Tell everyone your idea. WHAT?? Yes, the only way to figure out if you have a good idea is to talk to people about it. A lot of people are hesitant to do this because they think that someone will “steal their idea.” Well I have news for you, nobody cares about you or your idea. Of the people that like your idea, most will never take any action to actually steal it. Remember, a good idea is worth nothing, only execution of a good idea matters. Of course its probably not a good idea anyway, so if people want to steal it go ahead and let them!
- Validate the problem. All good entrepreneurial ideas solve a problem or fill a need for a group of people. Good ideas can either solve a little problem for a lot of people, or a big problem for a few people. But just because you have a problem doesn’t mean everyone else shares that problem. To figure out if you’ve hit on a common problem that people might want to pay money to eliminate, go have some conversations. A lot of conversations.
- Listen. When the people you engage with hate your idea, take notice. If people are luke warm on your idea, this is another bad sign. In fact, indifference is actually worse than negativity, because at least negativity implies an opinion. If people hate your idea, it might mean that while your solution to their problem sucks, they might actually have that problem. However, indifference usually means that they don’t even have the problem that your solution is trying to solve.
- Show your solution. If you talk two at least 100 people that all say they have the problem you have identified, consider building a prototype to show them what your solution would do. People get things much better when you show them, instead of you just babbling at their face. The only rule with this step is you cannot spend for than $20 or 2 hours building the prototype. Buy some pipe cleaners, glue, popsicle sticks, tape, and start building. Building with cheap materials like these is how innovations like Google Glass started. If your idea is a service, draw a flowchart of what the experience would be like. Show your creation to people, and get their feedback.
- Listen for “Can I buy it now?” The only answer you want to hear when showing someone your basic prototype is that they want to pay you money on the spot for the real thing. If they say that they might be interested, but won’t give you money, your solution is not good enough yet. Keep honing, incorporate feedback into a better design, and go talk to more people. Do this until some crazy early adopter hands you cash. When this happens, you might have actually found a viable business idea.
This probably doesn’t sound quite right, telling people your idea on day one, building stuff with pipecleaners and skipping the business plan. But this process will allow you to in a matter of days evaluate an idea, and determine if you want to move forward with it. Imagine investing your whole life savings in an idea that no one ends up wanting and losing all your investment. This happens to inventors and entrepreneurs all the time who never actually ask people if they would buy their product. Getting out into the real world early on is the best way to avoid waiting years of your life on an idea that is doomed to fail.