How To Test If You Have A Great Idea

So you have an idea, maybe many, but is it a great idea? Let's talk about it. Grab a notebook and a pen and jot down any interesting points or plans of action discovered throughout this article.

Does Your Idea Fill A Gap In The Market?

Make sure that your idea for a business, concept, new product or service fills a gap in the market. It will fill a gap in the market when there is space for another player, your product becomes an alternative, or your product is a substitute for another.

As a customer, what are some of your alternatives? If you buy coffee, there are alternative coffee shops. If you buy lunch or you go to restaurants, there are alternative restaurants. So, does your idea fill a gap in the market, or does it fill a gap because there is no existing product? 

Is Your Idea Innovative?

Is your product more innovative, is it a substitute? For example, my iPhone is a substitute for a camera. When I go on holiday or out and about, I don't take a camera anymore. My iPhone has become a substitute because the market has become more sophisticated. I never end up using my GoPro because iPhones are now water-resistant. An iPhone has become a substitute for a torch, a calculator, a calendar etc.

Is your product a substitute so you can consolidate the market? You may need to educate your customers on why your substitute is better because your customer is becoming more sophisticated. They're looking for innovations.

You want to be careful that your existing business is not going to get substituted. One of my concerns is that if Tripadvisor comes out with a business advisor review, that will compete with our brands. It's potentially a substitute for our product which is probably going to be a lot cheaper. So, I need to think about that.

Does your idea challenge existing alternatives? Does your idea offer a new and better way of doing things? The one thing we can do wrong is that we focus too much on features. What you want to focus on is how your idea brings benefits to your customer.

Will You Stand Out In The Crowd? 

You have to stand out in the crowd! It's not what you know. It's not who you know. It's who knows you. I really appreciate what's happened on Instagram for us in the last week. We've had a huge growth in our Instagram activities and, specifically, my personal Instagram account. We're starting to stand out in the marketplace, and the work we're doing is beginning to pay off. I'm going to continue to bring you guys more benefits.

Does Your Idea Meet And Exceed Customer Expectations?

The product, service or idea you're thinking of at least must meet the customer's expectation. Often, we believe that we have a great idea and forget to test our idea with our potential customers. Don't be a focus group of one. Test the market.

If people give you money, that's the ultimate test of your product or service. Say your product or service is fifty dollars hypothetically, and the benefit to the person is worth more than the fifty dollars. Your customer will give you the fifty bucks because they'll think that this is a no-brainer, "I can't believe it's only 50!" It's called arbitrage. It's buying things that are undervalued in your view and selling them for a higher value. How do you offer good value?

Does Your Idea Have A Purpose? 

Your idea has got to have a purpose; it has to help someone. Something I do is look at Maslow's hierarchy of needs and assess my ideas. Things that are lower down on Maslow's hierarchy of needs in terms of business have a purpose. Look at what happened at the beginning of the pandemic. Everywhere in the world, there were toilet paper shortages. I've been looking at which businesses are performing well during the pandemic. Think about whether your idea is low on Maslow's hierarchy of needs and harnesses your strengths.

If you can work with your strengths, you will be more efficient, effective and deploy speed. Your idea needs to be in a growing market. It's going to be far easier to succeed with your business or idea if it's in a growing or stable market.

Can Your Idea Be Scaled?

Economies of scale are important, so the cost of goods sold or the price per unit comes down. If you're selling your own time, that's not going to be scalable. This is a mistake that I've made in my career, selling people's time.

Common Questions Answered

How do I know if my idea is too overdone or if I'm entering a flooded market? 

I don't think you can ever overdo an idea. It's a sign that the market is becoming more sophisticated. It's an opportunity for you to niche down in a market and go where people are spending money. You'll be diverting the competitors' cash flow to you.

As entrepreneurs, we fall into the trap of finding an idea that hasn't been done. I've been there. It becomes costly, and you've got to educate the market. A much cheaper way is to enter the market and offer the benefits your potential customers are looking for. I love flooded markets because money is flowing, customers are buying, and they know what's going on. You just need to be the best in a flooded market.

I don't have much money, but I want to start a side hustle. Where should I start?

It depends on whether you want to start a side hustle in a specific area. However, I would suggest that if you want to earn a bit of extra income, consider checking out Facebook Marketplace or eBay and look out for undervalued items or things that you know will sell. That's where I would start my side hustle until you move into an area that you know more of.

How do you measure the success of new ventures?

Look at the number of new customers paying for your product or service in the first couple of months.

How do I find customers? 

Ask yourself where do your customers hang out. Where do the people hang out that are looking for the benefits that you offer? Think about how you can scale.

What should I read before thinking about starting a small business?

Check out my list of books that I recommend for aspiring entrepreneurs in my article, "What Books Are In A CEO's Library?"

You can also download my FREE Business Growth Blueprint.

Keep learning, 

Kobi Simmat - Director & CEO of the Best Practice Group.