During my career, I have founded and operated at least five start-ups, three of which were in the healthcare field. I have worked with physicians who start businesses and successful entrepreneurs, and many of the points I illustrate below reflect lessons and advice from countless others who have more startup experience than me.
In this article, I have focused on the most critical first hurdle: Can your idea become a successful business? – Do nothing else until you answer this question, as it will determine your success or failure. This is the “one thing” to channel your energy on first.
I have a great idea for a new product or service. Where do I start?
Chances are you have already spent countless hours contemplating how your product or service is an improvement over the status quo, solves a perceived need or creates a utopic future. You probably have done some research and not yet found anyone else has come up with the idea or offers anything similar. This convinces you that a market opportunity exists. The more you think about your idea, the more you believe your ‘spark of genius’ is truly novel and destined for success. You may affirm this conviction by soliciting feedback from your immediate circles: family, friends, co-workers – all who tend to be highly supportive and complementary.
This ‘soft’ vetting appears to validate market acceptance that encourages would-be founders to charge forth into execution. Too often, novice entrepreneurs make this mistake and pursue their venture prematurely (I have…more than once). Your idea needs to be rigorously challenged and perfected in the context of a market. Can your idea make the leap from concept to a revenue generating business? Not all ideas translate into products, and not all products can create a successful business. Do not confuse an idea with a business. Instead, find what market your idea fits into and adapt it to be commercially competitive. You definitely do not want to be a product in search of a market – these ventures often fail.
Fortunately, you can accomplish this without a business or entrepreneur’s background. It does demand, however, that you convert your passion for your idea into conviction about building a business. In doing so, you will need to accept that your idea may change drastically, and you also need to accept that you will not figure this out alone.
Copyright concerns during this vetting process are common. Many people fear getting their ideas stolen or copied by someone else if they expose it beyond close confidants early on. They then become very protective, not opening the idea to criticism or serious vetting and spend money on lawyers to set up legal safeguards. Requiring a non-disclosure agreement before having a discussion with someone about your idea is a sign of an amateur.
I think this protective approach is a huge mistake because it conceals shortcomings or flaws that can later handicap the venture and cause major setbacks. You are better off socializing your idea broadly and getting as much brutal, honest feedback as possible. This feedback gives you a competitive edge and helps inform the venture’s direction. Ideas that are vulnerable to imitation and lack inherent defensibility will not survive very long in a competitive market, and those that are not refined through iterative feedback will fail spectacularly – get others to help you see this before charging ahead with your idea. I think Furqan Nazeeri says it well in his article “Nobody will tell you your baby is ugly” – I am sure everyone can relate.
Vetting the Business Opportunity
What problem does your idea solve? This is a common question investors ask entrepreneurs, and honestly, it is perhaps the best question to ask off the bat Most successful businesses solve a problem, and commercially successful startups are born from them. This is because people or businesses will pay to have a problem solved. They will not pay for an idea if it does not solve a problem they suffer from now or is on the immediate fiscal horizon. Problems are always at the top of an individual or businesses’ priority list; big problems get all the executive attention and money. New ideas for a better future are always at the bottom and suffer from underfunding. Your idea likely emerged from a problem you recognized. Go back and ask if the problem is important enough and if others are seeking a solution.
Who is your customer? Know with certainty who your initial customer is and focus the offering to solve their problem. Study them, talk to them, learn everything you can about them – especially how they buy and who influences their buying decisions. Understand their problems, why those problems exist and why the problems remain unsolved. Find out what solving a problem will do for a customer (save money, increase revenues, etc.), where it ranks on their priority list, and quantify it. Here’s a great story from seasoned entrepreneur Steve Blank about a company that did not do this right the first time.
Don’t boil the ocean – keep your initial product tightly targeted at a niche sub-segment of potential buyers. You may identify many potential users and find many applications for your solution, but choose one customer type and focus on them. This will prevent you from investing in too many features and help you more quickly iterate improvements. It also helps clarify your message to the market and connect with potential buyers. These customers are your kindling. Dave McClure, an angel investor in Silicon Valley, has a good read on this subject (and other topics too).
Who will pay for your solution? Test your idea commercially – ask someone/some organization to pay you real money for it even if it doesn’t exist. If they won’t, ask why. Don’t forget – use or adoption is not buying and does not validate the idea as a business. Your idea may get used or people might say, “I would use that”, but they think and act much differently when you ask them to also pay for that use. Mark Suster developed a great approach for doing this and offers other great advice as well.
At the end of this exercise, you should be able to articulate exactly who your customer is, what you are offering them, how it benefits them and how much they are willing to pay you for it. And if enough people have signed up as early buyers, your idea is now a business opportunity.
Starting a business is both incredibly satisfying and remarkably challenging. Thankfully the trail is well worn by seasoned trailblazers to guide your path. I’ve shared my top picks with you for further reading. I can say with conviction from experience that these first efforts are critical to success. Keep in mind this important “one thing” and best of luck with your venture!
Mike is an executive, entrepreneur and technophile with a career building companies that leverage the power of social media, mobile and big data technologies to solve problems and improve people’s lives. He currently is an advisor to Expert Medical Navigation (EMN), a provider of patient education and remote second opinions. Mike is active in the Boston startup scene and enjoys working with entrepreneurs.
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