Where do your new business ideas come from? What steps do you take to convert the new idea into a new product?
I was caught off guard last Friday when I was asked that question at the MERC 2009 entrepreneurship conference last Friday at George Mason University.
I should be able to answer that question without hesitation — starting a business and business planning are, after all, what I teach and write about — but this was about me, specifically, and how I had done it.
I know very well that you should always push the idea through an “ideas vs. opportunities” filter. Ideas are a dime a dozen, and worth nothing; except when and idea is an opportunity. The filter is a matter of planning: is there a market, can I reach it, do I have the resources, will it be profitable, will the investment of resources have a reasonable return?
I’m used to ticking off some standard lists of idea generators. “Find a need and fill it,” for example. Or, Guy Kawasaki’s “make meaning,” a theme of his The Art of the Start book.
This time, however, I hesitated. I realized that my own instinct is to build things that I want to use. I’ve been impatient with the filter step of making sure the idea is actually an opportunity. Sometimes I’ve skipped this key planning step. And I may have lucked out here and there, but on the long run, it’s worked better to check the market first.
My instinct is classic “ready, fire, aim.” I’ve learned the hard way, though, that “ready, aim, fire” is better. Even though I need it and want it, that doesn’t mean others will.
Example: Forecaster, a little-known product that failed. Set up a business line graph, define the horizontal and vertical, then draw the line with the mouse. It generates the numbers. I built it because I wanted it, but I didn’t take the planning step, and I was wrong. There wasn’t a market. It failed. And I had spent a long time building the product, creating documentation, building the packaging, the whole launch thing that could have been avoided with better initial research into the market.
Another, happier example, was a product we didn’t produce in 2002. That time we studied the market first, and it just wasn’t there. I wanted to use what we were going to build, but I might have been the only one.