Three characteristics of a brilliant business idea
The business enterprise has two — and only two — basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. —Peter Drucker
SMEs Chat with Phillip Chichoni
In a recent Facebook post, Econet founder and probably Zimbabwe’s most successful business builder in recent years, Strive Masiyiwa talks about the need for young people to get skilled up.
He says when he left university, he had an honours degree in electrical and electronics engineering, but he was acutely aware that he was not yet an engineer.
He knew he still had to acquire some skills that would enable him to be paid a lot of money. One of the first things he did was to enroll for a course in basic craft skills training in areas like house wiring, fixing radios and televisions and learning how to use tools such as the mechanical lathe.
When he got his first job, Masiyiwa was extremely popular with artisans and technicians; this was because they could see he understood their jobs.
There is a good lesson from Masiyiwa’s experience for young people today: instead of waiting to get that loan or capital investment to build that “big project” they dream of, they can start small, using what little means they have, even if it means selling tomatoes at the local market.
For every startup business launched, there are hundreds, if not thousands, of startup ideas. A good portion of ideas die in people’s heads without even getting the chance to see the light of day.
It needs good planning to find the courage to turn an idea into a business, and actually do so.
Even after being launched as businesses, some ideas still fail. Although any number of reasons can cause a new business to fail, some ideas are simply not good enough.
In a previous article I mentioned that the key to finding a good idea is to have lots of them. The more ideas you launch, and the faster bad ones fail, the quicker you will get to a brilliant idea. How do you know which one is a brilliant idea?
Brilliant ideas are simple
A sound business idea is something that is not complicated but simple enough to be implementable with the available people and resources. An idea that will need expertise that is not easy to find will be difficult and expensive to turn into a business.
You don’t have to reinvent the wheel. Instead, you should seek ways to make iterative improvements or changes to existing products so as to create new uses and new markets for them.
Henry Ford did not invent the motor vehicle. They were already being made before the turn of the 20th Century but only available to very rich people because they were very expensive.
Instead, Henry Ford simplified the manufacturing process through mass production facilities, thereby creating new markets for motor vehicles among the middle class who were relying on horse drawn carriages.
Brilliant ideas solve real problems
People will only pay for something that gives them real benefits, like removing a pain or making their lives better or processes easier. Would you pay for something that you can easily do without? Or something that brings you no joy or satisfaction?
If you won’t pay for it then the majority of people will be of the same mind. Imagine if there was a significant charge to use Facebook.
How many of your friends would pay just to know about what you are doing or where you are going?
Brilliant ideas have a market
You can only build a sound business around your idea if there is a big enough market gap. Find out if there is a need for your idea. Talk to as many people as you can about it, especially those you think are going to be your target customers.
Will they want to buy your product, at a price that will make profits for your business?
It doesn’t hurt to talk to competitors or leaders in the industry. They can give you some useful insights about the soundness of your idea. Searching online can also reveal more insights about the need for your potential product or service. Sometimes the customers you had in mind might turn out not to be the ones who really need your product, so you might need to adapt your idea to suit the real customers.
While the core of your idea may stay the same, the details and delivery will probably evolve, so you need to be close to your customers.
What are your thoughts?
I am giving away one year’s subscription to the monthly BusinessLink digital magazine to three lucky readers who correctly solve the answer the following riddle:
“I’m not a pool, a tree, a slave a website or a shirt. What am I?” Please post your answer in the box at the bottom of my website http://smebusinesslink.com and click submit.
Phillip Chichoni is a business development consultant who works with SMEs and entrepreneurs. You may contact him by email: email@example.com. You can also visit: http://smebusinesslink.com
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