Every other day, I meet a young aspiring techno-prenuer, expressing their desire to begin a start-up and seeking advice on how they can go about it. I ask what the driving idea is in over 90 per cent of the cases the responses are at best scary.
My initial discussion leaves many disappointed, but someone has to ask the tough questions: what inspired the idea, what is your market? What is your major revenue stream? What is your distribution channel? What is the projected market behaviour over 5 and 10 years?
I realised that they are asking all the wrong questions and that their reason for starting the business is at best flawed. I needed to put something out there to guide those who may not have the opportunity to ask me these questions directly.
Most of the ideas being floated around by some of the young entrepreneurs were born out of a school project, designed to pass an assignment or a random thought. This is the absolute worst way to start a business or a product.
Most people believe that the first step to starting a new company is to have a great idea. I can almost guarantee you will have countless brainstorming ideas that will not come to anything useful beyond a long list of wishes. A great business idea/concept solves real problems and requires a deep understanding of what those problems are and is designed to solve them.
So, how do you find a great business idea? I propose about five steps that an entrepreneur can take towards gaining some mileage in their attempt to start a business.
Find a big market: Look for big industries, because ultimately all businesses are a lot of hard work and wouldn't you rather spend the effort and time on something with the potential to be a big company. Find a need which will satisfy a mass market and which has the potential for high usage.Take an example of water, and I don't mean the Inyange type pack, a more budget drink-on-the-go pack, easy to cool low priced and targeting the day-to-day guy on the street.
Competition: Try to find space that is unattractive and therefore has few competitors. This can be that business you start with that will establish you in the market and create the necessary connections while you get your feel around the industry. More often than not, people rush into a market which is very competitive.
Look for a problem or a pain point: What need are you trying to meet? Need is the primary driver of consumption, want and luxury can inform the process but should not be the reason. You will need to study the chosen market really well and find the problems in it. Understand the intricacies of the chosen space by talking to experts, customers, end users. Read literature on it. Maybe even work in it for a couple of years.
Think of a quick and dirty solution: Ultimately, the "how" you solve it doesn't really matter because your first version will definitely be riddled with error but that's not the end, most weak entrepreneurs will give up but the strong will continue, once you go out there and start trying to solve the problem you'll quickly learn what works and what doesn't.
The next great idea starts with market study: You will never succeed in the market which you are clueless about, many ideas assume they know the market, being a potential consumer does not make you a market expert.
You will first need to identify the problem areas, and only then start trying to come up with solutions. However, it is not a guarantee though that once this is done, you will be on the way to having your very own success story. There are many other factors which can shape the future of your business, I will say this though. Following the steps mentioned above will put your business idea on a more solid footing and in a better position to survive.