Starting a new business is the start of a long journey of discovery.
Learning new things through error or good fortune, learning from others and discovering a lot about yourself.
For some, the journey ends much earlier than their dreams had envisioned when the foundations of the business collapse under their feet and the plans they made don’t survive the first inevitable punch.
Not all businesses make it, not all flourish but very many do go on to achieve their objectives, delivering fulfilment for those who start them. There are many reasons for this but I’d like to focus on the one factor that I see as a key differentiator between those who make it and those who don’t; this is the ability to establish whether you have a ‘business idea’ or a ‘business opportunity’.
In the first sentence, I mention ‘a long journey of discovery’. This journey has to be completed in its entirety however some new entrepreneurs decide to skip past part of the journey and this can be a costly mistake.
Business ideas themselves do not make money.
It is business opportunities that can be capitalised upon. Taking a business idea and exerting pressure upon it, is a necessary step to establish if there is a genuine opportunity to make money.
In many ways, success in business is not difficult.:
‘Can I make my product (or deliver my service), profitably’? and if the answer to this is yes, ‘can I sell enough of it/them to create a business’?
You see, if the answer to either of these questions is ‘no’ then it is simply a business idea with no underlying opportunity. It is remarkable that so many entrepreneurs forge ahead with their idea without truly testing if there is an opportunity.
A real example:
A man came to see me for some business advice. He explained that over a few years he had developed a board game that he thought would be 'the next Monopoly'.
With great enthusiasm, he produced a rather homemade but surprisingly well-made prototype. The perimeter of the board had boxes of red or green and on throwing the dice, you would land on one colour or other. If it was red, you lifted a red card which would reveal a currency; your task was to name the country that used this currency.
A green box would mean a green card which would reveal a flag; your task was to name the country, which used the flag...that was it! That was all there was to the game.
I for one did not find it particularly interesting but didn’t want to crush his unbridled enthusiasm.
I decided to ask if he had shown it to anyone and given them the opportunity to play it. He said he had played this with many family and friends and they all thought is was a superb game. I asked if he had played it with anyone who wasn’t either a family member or a friend and the answer was no. I offered to take the game away and show it to friends. I did, and they unanimously agreed with my assessment that it was without question the worst game we had ever played. I, therefore, went back to him and sensitively suggested that we set up a focus group of strangers to properly test the appeal of the game.
This idea was refused point blank and in fact, he had already found a company who could produce 1,000 of these games for £20,000. His plan was to use his entire life savings to fulfil his dream. I strongly advised against this but I was wasting my time, he was determined. Many years on, I believe he still has them in his garage.
He refused to challenge his idea, he refused to accept that his opinion of the idea could be flawed. He was scared that someone might not like his ‘baby’, this ‘idea baby’ that he produced and nurtured for so long. How could anyone tell him his baby was ugly? He refused to do that key part of the journey...'do I have an idea?...or an opportunity?'
It can be difficult. When an idea is conceived, the resulting ownership, passion and enthusiasm can be intense and lead to the notion that steps in the process can be skipped but you must not miss this step. It is, for me the single biggest error made at the start-up stage.
You and others should test your idea to destruction. Only then can you find out at an early stage what you are bound to find out later anyway.
Finding out something bad early before you spend too much time or money is a very good thing and it need not spell the end of the idea. It can be massaged, remodelled or reshaped into a genuine opportunity. This exploration may even lead you to where the genuine opportunity is and so it is a journey best completed.
Elevator's Business Accelerator Programmes allows early stage businesses to come and live with us for a while and let us show our Founders how they test their business idea thoroughly before deciding what shape it needs to be to take advantage of a real opportunity. Next accelerator group starts on the 22nd Feb 2016 so why not apply (there are 4 days left to do so) and let us help you find your opportunity.
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