Some time back when the economy was buoyant meal preparation kitchen businesses took off. The idea was for people to visit one of the commercial kitchens, make dinners for the week with pre-chopped ingredients. The concept was even franchised with names such as Dinner by Design and Super Suppers. The number of stores grew well during the bumper years but when the economy went southwards people went back to making meals at home.
This is the difficulty with coming up with a new business idea or concept and estimating or evaluating whether it is going to take off. You never have absolute certainty that an idea will succeed. Start-ups and new business ventures have many inherent risks but the rewards can be a high when compared to other investments.
Steve Blank, known as the man who made the lean start-up approach a movement, says that it took a while to realise that “built into a founder’s ongoing passion is a series of untested hypotheses they can keep testing and iterating,” according to an interview in Start-up Smart.
What this means is that you can’t bank on dining out on your first idea. You may need to keep testing and refining your idea until it becomes workable. Many so-called good ideas need to be thrown out or discarded when they prove to be not commercially viable. One legendary entrepreneur, James Dyson, made more than 5000 “experiments” or prototypes to eventually develop his first bag-less vacuum cleaner.
What makes an idea successful?
Some will say immediately that the entrepreneur’s or founders passion is one of the key ingredients for success. For example, Steve Blank says, “On day one, you have to be a true believer. You have to believe your initial vision is correct, that your passion will make it happen and remove all obstacles.”
The other essential is market demand. You must be able to give potential customers value that they may not be able to get anywhere else. A new product or service needs to be cheaper, faster or easier to use than what is on the market. Often the problem is that a new product or service is so new that the adoption rate by potential customers is very low. Potential customers are hesitant to try out something new that may increase risk for themselves. In a tight economy, for instance, customers will stick to the tried and true even if it means they are not 100% satisfied with what they purchase.
Entrepreneurs also need tools and resources to turn their passions into profitable businesses. Some of the most important resources and skills an entrepreneur must master includees business planning, cash flow management and being able to pitch your big idea for funding or learning how to get the word out and sell your product or service.
Action summary:
– Products and services must give value to potential customers that is greater than what is presently available on the market
– An initial business idea will probably need to go through several iterations before it is shaped into something that will provide superior value
– The start-up owner needs to know what tools and resources they require to turn their new ideas or passions into a profitable business
– Learning how to pitch your idea and how to get the word out to sell your product or service is a key entrepreneurial skill
You may not be able to dine out on your first big idea but if you keep working at it passionately and know what is required to develop it you may eventually turn your idea into a viable business.
