Quite a few of the people I know have a business idea in their minds. A hot new business idea that they think is revolutionary. A product or service that would become the next must-have…
If only they had the time or ambition to pursue that idea…
I bet you know one or two people like this. They will often say things like this:
“I had this amazing idea while I was in the shower! I could make shower heads that light up in different colours depending on your mood! Everyone would want one! I’d be a billionaire!”
The bigger-headed ones can also sound like this:
“I’ve been thinking about starting a business that’s so revolutionary that there is no way it cannot fail. I can’t tell anyone about it though because I don’t want anyone to steal my idea.”
If these sound familiar, it’s because they are quite common.
A frustrating conversation
A few weeks ago I met a girl at the beach – a friend of a friend. She had come to Barcelona for a conference and wanted to pitch her business idea to find potential partners. She had a phone app in mind, which would allow people suffering from severe depression to get in touch with one another.
I thought; “Wow! That sounds awesome and would help a lot of people around the world!”. I was intrigued by how she was going to make her idea a reality, so I asked her some questions. This is, more or less, how the conversation went:
Me: “I see that you are targeting people with severe depression, which is great! Have you found out how many people would be interested in your app?”
Her: “No, I haven’t, but I think it’s a great idea, so I’m sure it will work.”
M: “Ok, but have you found other apps out there that are doing something similar to what you’re trying to do? You know, to validate your idea?”
H: “No, I haven’t looked properly, but I really hope there is no competition, as that would mean my business would fail!”
M: “Ok…Sure… But if you’re going to invest your own money into developing an app and doing all the related work, surely it would be a good idea to know you’d succeed, right?”
H: “Oh no, no – I’m not going to pay for the app. I’m hoping to find app developers to create the app for free. And it will also be a free app.”
At this point, I was almost pulling my hair out.
She didn’t believe that she should make this a paid app, so she could reach more people. She said that other big apps like Instagram and Snapchat were also free and that they were her example. She didn’t consider that those apps have a different monetisation model and that they still have substantial upkeep costs, like paying employees to maintain the apps, and keep improving them.
I don’t know how she got on with her pitch, but with such limited knowledge of how the world works, I wouldn’t bet on her…
Innovate or Iterate?
People seem to have a skewed idea of what a business needs to be in order to succeed. They think it has to be incredibly innovative, outstandingly original and something never done before, to really stand out from the competition.
While that could be true – and there are a few examples that stand out, like Facebook, these companies are isolated examples. They are anomalies. For every successful and innovative company, there have been thousands of failed enterprises (I may be making that number up a little, but you get the idea!).
Depending on the source of the information, anywhere from 50% to 90% of businesses fail within the first 5 years. That’s pretty huge!
If you don’t wanna be part of the failed businesses statistic (why would you?!) there is one universal method that has always worked, and is more conservative:
Solve a problem strong enough that people would be willing to pay money for the solution.
Here’s how the process should go:
- Identify a problem.
- Research to see if there is an existing business solving this problem.
- Improve on this business, or differentiate your offering in some way to make it more appealing.
- Reach out to your competition’s customers or find a new audience to sell your product.
This may seem a little counter-intuitive, given that your initial reaction may be thinking that there is no more space to compete. However, finding established competitors is a great way to prove that your business idea is viable and that enough people are willing to pay for the solution to their problem.
By taking a time-tested business model, you’ve already won half the battle. You don’t have to be original to be successful, but you do have to be different.
This is also the method that I’m following with this very blog you’re reading. I have researched the market, seen what’s out there, and I have good reasons to believe that it’ll become a profitable business. And hey, if it fails spectacularly, it will be online for everyone to see – or to be used as a cautionary tale!
If you want to start your own online business you’re going to need a website. I’ve put together a step-by-step guide that’ll take you through all the steps – in less than 30 minutes! Click here to check it out.
Thanks for reading everyone!