In how to choose the right business idea, I introduced the concept of the Idea Funnel. Like me, you could use the idea funnel to narrow down a bunch of startup business ideas into few viable ones. I talked about stage 1 of the due diligence process, namely, “Is the idea viable?”. In this post, I will present the second and final stage, namely, “Can I execute on it?”.
Stage 2: Can I execute on the business idea?
In stage 2, you are focused on things that you need to successfully take your business idea to the market. Here are the few things you need to have:
Do I have the team? In majority of the startups, it will take more than one person to bring an idea to the market. It is very essential that the first few people you bring on board are passionate about the idea, are capable, have some familiarity with the problem domain and are willing to take a risk with a startup.
Do I have the domain expertise? Being a domain expert or having an intimate knowledge of the domain will help you execute on the idea better than others who don’t. If you do not have the domain expertise, you either have to team up with somebody who does or spend sometime studying the domain.
What technology do I need? There are very few big ideas these days that do not involve technology. You need to quickly figure out what technology you need and whether you can build it. If you cannot build it, you need to see if you can license or buy it. Note that these choices will have an impact on the costs, the time to market and what you charge the customer.
How much money will it take? Even if you are not paying yourself or your team, it will cost you some money to bring the product to the market. The money could be spent on items such as rent, technology, operations. Having a handle as to how much you need and where you are to get them money, will help you decide whether the idea is financially feasible.
What is the go to market strategy? How you sell the product is best answered by the marketing strategy. You don’t need an in-depth and comprehensive marketing strategy, but you definitely need a high level one. It will help you determine if the marketing tactics such as PR, direct sales, promotions, advertising, distribution channels etc will work or not for your product. Having one or two outlets for each of these tactics will go a long way.
What is my opportunity cost? What are your choices? If you do not work on this idea, what is that you will be doing? How much you will make and how much fun you will have doing it? What is the impact on your family and your personal life? These are some of the questions you need to answer to decide if there is something better than pursuing the business idea.
These are some of the key criterion I use and hopefully they will help you when you are making that decision. Like always, I would love to hear what you think.