How to turn that “good idea” into a great business
You’ve just had a lightbulb moment: you’ve figured out a toothpaste tube that sucks excess paste back in the tube or you’ve thought up an app that reminds significant others about rubbish day and when the dishwasher needs emptying ... it’s going to be huge. You just know it. But what’s the next step to turning that million-dollar idea into a million actual dollars?
Is it sinking half a mill into product development and branding before taking it to market? Or is there something we should do before going deep into Mum or Dad’s pocket or re-mortgaging your family home?
Yes, there are a series of low-cost steps you can take to put your “good idea” through the ringer and refine it before getting to that all-important “heck yes or heck no” decision point.
1. Make it real, fast: Co-founder of Netflix, Marc Randolph recommends that “the trick is to take your idea and set it on a collision course with reality as soon as possible.” Good business is all about real money changing hands to solve real world problems, so it makes sense that we should be looking to make our idea real as soon as possible to test it out.
Whether it’s the toothpaste tube or the home chores reminder app there will be some low-cost version of the product you can create to see if it will solve the problem that needs solving. In his book Lean Startup Eric Reis introduces the idea of the minimum viable product (or MVP) which is the prototype product that is just (only just) good enough to be tested in a real-world situation.
2. Test: With this minimum viable real-world prototype you’ll put it in front of a small group of the people who you think will be your customers. The questions you’ll ask are “Does this solve the problem?” and “Is it the best at solving this problem?” and “How can it be better?”
If your product is too expensive to develop to be tested (for example, if it’s a $30 million apartment complex!) you can still test it with minimum spend. For example, to test titles for his first book, Tim Ferriss simply used Google Search advertising to try different book titles. All click throughs from the various adverts displaying various book titles were measured and went to a “Book coming soon” holding page. So, with a few hundred dollars of digital advertisements of a couple of different concepts, you’ll get a nice early indication as to what people are more interested in.
3. Modify: Now with some all-important data at your fingertips, you’ve got two options: 1) to go back to the drawing board and modify your idea to make it better for the next more extensive round of testing, or 2) abandon now. And remember, we can’t be precious about our ideas, be ruthless in your testing, if the data says no then be prepared to let it go. Richard Branson famously declared, “Business opportunities are like buses, there’s always another one coming.”
4. Test Again: So, your early MVP showed promising signs and gave you valuable areas for development. Now you’ve progressed your product to something that isn’t just your idea, it’s a proven reflection of the needs and desires of your target market. This is the time to test the size and quality of that market.
Most of us have experienced the annoyance of squeezing too much toothpaste out of the tube, but how many of us would be willing to change our toothpaste buying behaviour in order to get hold of one of these new fancy tubes? And how much would we be willing to pay?
These are the questions you’re trying to answer in these latter stages of idea testing. They will give you (and your potential investors) a good idea as to the monetary potential of the market and so guide your next big decisions as you go door knocking to Mum or Dad or the bank manager.
5. Throw It Out or Dive Deeper: Again, I have to emphasise the need to hold our ideas lightly and to use the real-world testing as the true proving ground—not just our hunches or feedback from friends and family (which are typically either overly negative or overly positive). If the MVP isn’t showing the numbers you want, hop off the bus and wait for the next one. And with this next idea, give it the same collision with reality as you did with your first idea.
And finally, I’ll leave you with this nugget of gold, from well-known marketing thought leader Seth Godin who said, “There’s no shortage of remarkable ideas, what’s missing is the will to execute them.”
If you’d like to test and iterate your idea, be sure to get in touch with any of the team from Innovation HQ:
- Stephen Hill (business strategy and accounting)
- Simon Singh (software development and IT strategy)
- Pallak Singh (websites and design)
- Hayden Shearman (marketing strategy and market research)