2.04 – Testing Your Idea
Putting a Promising Idea to the Test
Wondering if your idea is as brilliant as it seems? That’s a good sign. It means you’re ready for a reality check to ensure your path aligns with your goals.
Writing a business plan often feels like a series of reality checks. By meticulously examining every aspect of your business – from the products or services to competitors and customers – you’ll face the realities of entrepreneurship head-on. Let’s dive into tips for bouncing your ideas off others who can help refine them and ways to evaluate your strengths and weaknesses in executing your plans.
Doing Your First Reality Check
Once you’ve settled on an idea, it’s time for an honest evaluation. This can be challenging, especially when excitement is high. While enthusiasm drives success, scepticism and honesty are crucial.
Ask these essential questions:
- Is the core idea of your business plan clearly defined? If not, refine it. Writing and revising your idea helps gain clarity.
- Is it feasible? If you have doubts, reconsider the scope or list what’s needed to make it achievable.
- What excites you most about the idea?
- What concerns you about the idea?
- What are the biggest hurdles to implementing your business idea? A realistic list should have at least three items.
- How does your idea stand out in the marketplace?
- Can you tweak the idea to enhance its potential?
Anticipating Disruptive Innovations: Opportunities and Cautions
A great idea today could be outdated tomorrow if disruptive innovations arise. Remember the Flip video camera? It thrived until smartphone cameras, with built-in video capabilities, rendered it obsolete.
Disruptive innovations can be problematic if you’re unprepared but can also present opportunities if you seize the moment. The rise of the Internet, for example, ended newspaper classifieds but gave birth to Craigslist and eBay.
To anticipate how future innovations might affect your business:
- List all technologies in your industry. Identify those undergoing or likely to undergo significant changes. How could these changes impact your business?
- Reflect on past industry changes. What drove them? Are there signs of upcoming transformations? How might these affect your business idea?
- Question the assumptions behind your business idea. What if they aren’t as solid as you think? Consider scenarios where these assumptions change. How would this impact your business?
The goal isn’t to find definitive answers but to recognize that disruptive changes can occur in any industry. Questioning assumptions and assessing technological changes will better prepare you for future challenges.
Getting a Second Opinion
Discuss your business idea and preliminary plans with an outsider, ideally a mentor who:
- Has experience in your business area or a similar field.
- Is honest enough to tell you whether it’s a great idea or needs more thought.
- Is someone you respect and from whom you can accept candid criticism without feeling defensive.
Consider colleagues, teachers, professors, friends from college, or other associates. Friends and family can offer perspective, but emotional ties might hinder absolute honesty. Set ground rules if you seek their input.
In addition to a mentor, designate someone as the devil’s advocate to ensure every issue is critically evaluated. This person’s role is to scrutinize each idea skeptically. In larger companies, create two teams: one to defend the idea and another to critique it. Have the opposing team act like a competing firm aiming to find weaknesses in the new venture.
Conducting a Self-Appraisal
To determine if you have what it takes to turn your idea into a success, respond candidly to the following statements, rating yourself as poor, fair, good, or excellent:
- Setting goals and achieving them on time
- Making decisions and completing tasks
- Organising a complex schedule efficiently
- Staying focused on tasks
- Juggling multiple tasks simultaneously
- Judging character
- Getting along with others and bringing out their best
- Listening to all sides and making decisions
- Leading a team despite disagreements
- Understanding what motivates people
- Resolving disputes
- Being honest and straightforward
- Keeping your cool under pressure
- Saying no when needed
- Managing project details
- Seeing the big picture
- Acting decisively under pressure
- Adapting to changing circumstances
- Taking risks
- Taking responsibility, even when things go wrong
Review your responses to identify your strongest and weakest areas. Use this information to understand where you need to compensate and where you can leverage your strengths.
Not all traits are equally important for every business. Align your top strengths with the needs of your proposed business idea. If you’re weak in a crucial area, consider developing those traits or enlisting help to cover these gaps. For example, if you struggle with details but they’re vital for your business, consider hiring an assistant or working with a meticulous colleague.
By thoroughly testing your idea, anticipating industry changes, seeking external feedback, and understanding your strengths and weaknesses, you’ll be well-prepared to move from idea to reality.
