An idea is something that seems great, new and innovative. It is hard to have ideas but why is it difficult to make them pay. Let’s unpick the assumptions behind the idea… and see what needs to be done to make it into a living, commercial reality.
There are many ways that an idea can come to mind. For example:
- Seeing something “neat” where putting several things together has synergy that means the result is much more than the constituent parts.
- Solving a problem that you have and realising that other people have the same problem. (My first company, Gordano, did this).
- Looking at the market place and realising there is a cheaper, better or quicker solution to a problem that no-one else has thought of. My second company, DeeZee, did this).
So if you’ve had your idea (or have a series of ideas) what’s the next step? The answer is that there are lots more things that need to be done to convert and idea into a profit making, long living company. Here are just a few to think about:
- Establish the purchasing proposition. Work out why anyone would buy the product or service. What is the problem they are trying to solve? What drives them to search you out and purchase your solution to their problem? What’s in it for them?
- Product pricing. How does the cost of your solution compare with what your potential customers are already doing?
- Research the route to market? What do the people who buy your product look like? (Note: not “use” your product but “buy” your product – those who hand you money). How are you going to get them to notice you?
- Develop a sale process. So someone wants to buy your product. How do they actually do it? How do they pay? When should they pay? What are your terms & conditions? What is your liability for product failure?
- Manage product/service delivery. How do you deliver your product? Via an intermediary (iTunes, the Post Office, etc.) or do you need to do something?
- Seek investment. You may need money to complete development or do any of the items in this list. If so, who are you going to approach? Why should they invest in your idea? What’s in it for them?
- Handle disputes and feedback. What happens when customers find something wrong or don’t understand how it works? Who is going to handle these requests? What about returns? Do you refund? What do you do with product that has failed?
- Manage the people within the organisation. There’s too much here for one person… that means there has to be people management. What are their expectations? Is training required? Do they understand what they are selling/supporting/developing?
- Develop the product. You need to evolve to keep ahead of the competition. Who decides the new features and checks the benefits are appropriate. What about strategic, long term design decisions?
- Consider new products. Finally you may have some profit which you may want to re-invest in new products. So what are they? How do they compare to the current product? Which is likely to be more profitable?
As you can see, the initial idea is only a very small part of what is required to make a successful company with a long term future and chance of profitability. I would maintain that the idea is only 5% of what is required. So how do you get help with the other 95%? That’s a topic of a future blog.