I have a certain friend who called me again a while back, all excited about his latest revelation. “What if you could go to a web site and find all the recipes you could make today, with just the ingredients you already have in your kitchen? I’m going to start a website to offer this service!”
I’m sure you all realize that there could be quite a distance between a great idea and a great startup. But many people don’t have a clue on how to bridge the gap. So, trying carefully not to rain on his parade, I suggested to my friend that he complete the following analysis as due diligence on the idea before spending his life savings (and others) to roll out a solution:
In case you are wondering what happened to this recipe idea, try the search I suggested and you will find a dozen sites that already claim this capability. Needless to say, after I did the work, my friend decided to quit talking about this one.
But he will be back, he always is, and one of these days he may find an idea that someone can make a reality. It won’t happen for him, because just talking about an idea doesn’t start any business. Am I the only one with a friend like that?
Marty Zwilling
I’m sure you all realize that there could be quite a distance between a great idea and a great startup. But many people don’t have a clue on how to bridge the gap. So, trying carefully not to rain on his parade, I suggested to my friend that he complete the following analysis as due diligence on the idea before spending his life savings (and others) to roll out a solution:
- Few competitors. Use Google or one of the many other search engines to search for existing solutions to this problem. A search argument like “recipes from the ingredients you have on hand” might be the place to start. If you find ten competitors who already have this offering, it’s probably not worth going any further.
- No patents filed. Maybe the solution hasn’t yet been commercialized, but a patent has been submitted by someone else, putting your idea in jeopardy. Another series of searches on Google Patents and the US Patent Office site and Free Patents Online is in order at this point. Of course, you could pay a Patent Attorney a few thousand dollars to do the same search.
- Large and growing market. Investors will expect market analysis data from a “credible unbiased third party” – that means a nationally known market research firm like Gartner, Forrester, IDC, or Frost & Sullivan. Hopefully, you will find, with your favorite search engine, something like the “Cooking And Eating Market Assessment 2007.”
- Real customer need. Your own conviction that if you love the product, everyone will love the product, doesn’t count. Customers may “like” a product, but will generally only pay for things they “need,” physically or emotionally. Talk to experts in this domain (chefs, home cooking fanatics), and listen for hidden requirements and challenges.
- Whole solution viability. Many products fail because of “dependencies” and hidden costs. Auto engines that burn hydrogen are “easy,” but getting service stations around the world and new safety legislation takes decades. Make sure you understand all costs, sales channels, marketing requirements, and cultural issues.
- Right team is ready. The most critical step is to decide if you really have the passion, experience, and team for creating this solution and business. Startups are tough on even the most dedicated and passionate founders – others will likely fail, and definitely be unhappy. No idea is worth that.
In case you are wondering what happened to this recipe idea, try the search I suggested and you will find a dozen sites that already claim this capability. Needless to say, after I did the work, my friend decided to quit talking about this one.
But he will be back, he always is, and one of these days he may find an idea that someone can make a reality. It won’t happen for him, because just talking about an idea doesn’t start any business. Am I the only one with a friend like that?
Marty Zwilling
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6 comments:
lol. What if you're the one with those ideas? Some times they pop up when MINOR obstacles show up in your present endeavor. The trick is to remember that starting something else from scratch could take years and that's even before you start the Google search! Put your energy into solving the minor obstacle and keep going if you're making good progress.
One important piece of advice for entrepreneurs with physical products is to spend very little - especially for prototypes and initial manufacturing runs. Retailers wont buy your first run, so work on getting them to write a purchase order after seeing the prototype - before you fill your basement with manufactured stuff.
Inventing is tough; patents are expensive; but transitioning to salesperson is downright impossible for most inventors. Always think "gotta build a business around this product," because when selling to retailers/consumers it's best to hire at least a few people = a small business.
The information you provide is quiet helpful, why I was not able to find it earlier. Anyways I’ve subscribed to your feeds, keep the good work up.
I recently came across your post and have been reading along. I thought I would leave my first comment. I don't know what to say except that it caught my interest and you've provided informative points. I will visit this blog often.
Thank you,
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Haha, I thought about the same thing a while ago, in somewhat broader context :-)
The only real difference is that I'm computer-literate enough to open Google and do a little searching :) On the other hand, I'm careful enough not to expose my [potentially] valuable ideas to other people until I do some aforementioned googling.
This post is valuable because it structures all the to-do's nicely, essentially providing a good checklist for inexperienced people with ideas.
And please, stop calling the poor lad your friend. If the guy irritates you to the point where you're ready to expose and publicly humiliate he's certainly not one.
i agree with the physical products:
you want to be able to minimise spend on the cost of the product itself adn tie it in with the P&H where possible.
usually a search noline where there are more than 3 advertsiers will be a sign that there is some money to be made in that market. more than 5 -10 and we're getting somewhere. but at the end of thsday you could setup an adwords campaign and discover for your self if the market is willing ot buy into your product.
simple capture page and then to a sale sapge for your not yet produced item with the promise to deliver and charge when the item is ready.
thats the beauty of advertisign like adwords you can test for udner $1,000 and save yourself alot of heartache...
matty patterson.
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