The human brain is a baffling instrument that is constantly overflowing with a lot of ideas and thought on how to make things and life easier. As a wantrepreneur we know we want to startup but getting ideas that are eligible and long term is a little tough. Previously we already discussed on “How to start a startup” where we need to follow a few steps before we can start ideating; stating those steps here as a refresher:
- Choose your Industry, Ideally something you’re passionate about
- Pick a Niche in that industry
- Find the Potential Problem
- Ideate a Potential Solution
So now, we know how to get an Idea but how can we evaluate those ideas?
To be able to evaluate an Idea that is for a potential product or potential service, you will need to create a check-list of 4U Need which also identifies your value proposition. Let me explain…
Once you’ve found your product, you’d ideally want it to fly out the shelves as quickly as possible, that would be possible if you’re serving a Niche market of consumers that are Underserved and have an Unworkable problem, ideally a market where the competitors are low to none. This in a perfect competition world would mean something like a monopoly or a duopoly, good examples would be a Zomato and a Swiggy in India, these food delivery apps started as early players, competitors to each other and grabbed a major share in the Indian market.
After you’ve decided what is you underserved market, ideally you will want your product to fall under the category of Unavoidable and Urgent, the traditional method of ordering food in India through restaurant menus and calling is practically regarded as caveman behavior these days, because Zomato and Swiggy are positioned Unavoidable, that is, they have provided the customer with more variety and awareness of what is around them and thus created an urgency, where food is ordered, tracked and delivered within minutes.
The above 4Us will give you your value proposition and your mission statement. This helps you evaluate a part of the IDEA you’ve been looking for… Now what next?
Now you may want to consider doing some market research or networking to understand if your mission has competitors, if yes, what are they providing, how can you do better, their product cost and what are the priced as, etc. Having a competitor is a good thing because they already have a working product and you can already see where it stands. So the next thing you will need to focus on is a differentiator or your USP model. Once you’ve found your differentiator that could be as simple as the cost or something as advanced as a new feature or a possible value add. The next thing you will want to watch out for, is very internal to you as an entrepreneur, that is, you need to understand the financials of your business IDEA.
The financial methods that you would need is:-
- Cost-Benefit analysis
- Pay Back Period of your Idea
- Potential Capital Investment and Initial loss that you can withstand
Just because your product is good, especially in case of physical goods like clothing, or even perishables like food you may want to see how sellable it is before you end up stocking large amounts and end up paying huge costs or warehousing or facing the loss of expiry. You may also want to calculate your risk taking capacity.
After you understand your financials, the next thing you need to plan is your demand creation strategy. Remember to take small steps, Ideally you should reach a stage where your demand = supply or demand is proportionately is more than the supply. Also remember to keep a track on your re-order levels, days or time taken to produce the product, so on and so forth.
In short to get an Idea, you follow the steps
- Industry ->
- Niche ->
- Problem->
- Solution ->
And to evaluate your Idea, you follow the steps,
- Niche -> Underserved, Unworkable problem, Urgency, and Unavoidable (Your product answers the 4Us) = Mission Statement
- Market Analysis and Competitiors
- Find you differentiation or USP
- Financials (very Important)
- Your larger Plan, Your Gambit.
Starting your business is scary but if you are cautious and you have planned well enough, you would have mitigated most of the problems before they could arise.
Your Gambit 