Casey Eden is the co-founder of Orchestra – a centralised company and stakeholder management hub.
OPINION: There is an old saying in startup land: ‘Ideas are worthless; execution is everything’.
Clearly some business ideas are better than others, but at a crude level this statement is undeniably true when applied to the process of making a decision about whether your idea is worthy of pursuing as a business.
The reason ‘execution is everything’ is this: It simply doesn’t really matter what your idea looks like on paper – or what feedback you receive on your hypothetical plan.
What will define your success is whether you can get your product to market in a fashion that allows real customers to make a judgement on whether it solves a problem in their lives.
* Fiordland businesses say they need more help to boost the economy
* Election 2020: Jacinda Ardern extends loan scheme for businesses
* The lawnmower marketing lesson: There is always a way to get better results
* Covid-19: Returning New Zealanders bring ‘once in a generation opportunity’: Kea
Whilst there is no one set path for deciding if your idea is a good one, these steps may guide you in the beginning on your path towards execution.
Who else is doing what you’re doing around the world?
Once in a while a ‘unicorn’ idea will be created, but more often than not someone, somewhere, will, in some capacity, already be tackling the idea you have. Wherever they are in the world, take a look at your potential competitors to understand what you do and don’t like about their models. Is there still room in the market for your idea? How will you take clients away from their current solution?
And if you can’t stumble across anyone doing what you’re exploring, you may want to ask yourself: Why not?
Many Kiwis at the height of their game want to come home, a Kea survey shows.
Is your idea scalable?
Start up entrepreneurs are often asked: ‘What problem is your business idea solving?’ Answering this question is a critical step in deciding if your idea is valid. Chances you can already confidently answer this question and with the benefit of time and money you’ll eventually run into the right customers for you.
However, the bigger question you should be asking is: Is your idea scalable? For example how many customers would you have in New Zealand if you had 10 per cent market penetration? Can you build a business around that number of clients?
In truth most business ideas naturally do solve a problem, but the key component to understand is how many clients really suffer from that issue.
Is your idea defensible?
If you do get started and launch a great idea, how are you going to build a moat around your business? What is your competitive advantage? Is it the simplicity of your product, your price point, your unique technology – or something else?
What will your idea cost?
What will it realistically cost to prove your idea has legs? Plenty of great ideas never reach the point of being proved or disproved simply because a business runs out of resources (namely money) before it even gets to the testing stage.
More than likely your business idea will take longer than you anticipate, and cost more than you realise, to test its feasibility. Do you have the resources to do this?
Next Wednesday we’ll discuss the ways to seek feedback for your idea or product and how that can help you decide whether to press on with your business.
Casey Eden is the co-founder of Orchestra – a centralised company and stakeholder management hub – launched in partnership with online investment marketplace Snowball Effect. He is also the founder of Neighbourly and was instrumental to the success of GrabOne.