Startup Spark

Are You Sitting on the Next Killer Idea?

by Ben Yoskovitz on December 4th, 2006

Let’s say you’ve got the personality to be a perfect entrepreneur (and you’re not built to be a crappy entrepreneur). You’ve also got an idea. Cha ching!

Contrary to what many people will tell you, ideas are not worthless. The argument goes that a business succeeds on execution, and not on the brilliance of the idea. And, that an idea alone is worthless. That’s bollux on so many levels.

But, it is important to validate your ideas before you invest your life savings, quit your job, buy an Aeron chair and get to work.

So how do you validate an idea to make sure it’s a surefire bet?

First off, “surefire bet” is an oxymoron because a bet means there are odds involved, and if there are odds it can’t be surefire. More importantly, even after you validate your idea there’s still going to be risk and no guarantees of success.

Having said that, you can go through fairly formal processes to validate your idea.

The informal way of doing it is fairly simple: Talk to people about it. Tell people your idea and make sure you talk to people you like and don’t like, people you know and don’t know. Find industry experts and industry neophytes. Talk to ideal customers. Talk to potential partners. The more people you talk to, the better. Don’t be shy about this. The biggest mistake you can make at this point is not talking to people about your idea. Hold it too close to your chest and you might as well toss the idea in the garbage.

Of course, you should take a more formal approach which can help with validating the idea and begin to lay the groundwork for a business plan, business structure, etc.

Over at The Chilli they’ve got what they call the Chilli Value Test, which they describe as, “…a framework to help flesh out your thought process, strengthening the idea as well as preparing for the creation of the business plan and the due diligence from potential investors.”

I want to highlight some aspects of their plan related to validating your killer idea:

1. What Problem Are You Solving?
This is as important a question as any, and it’s one of the first things you should ask. Chilli has an interesting way of categorizing problems:

• Are you putting out a fire?
• Are you solving a burning need?
• Are you making life easier, cheaper and faster?

All three are valid problems and solving any of them can result in success. Burning needs trump fires and easier, cheaper and faster though.

2. What Value Are You Adding?
Don’t ever let the word “value” slip too far from your tongue. Adding value ideally means solving major problems, not minor annoyances. Chilli asks, “Can you quantify your value in terms of time, cost or speed?

That’s pretty cut and dry. I’d say value can be added and created in other areas as well. Social value, for example. Are you making the world a better place? There’s more to value than time, cost and speed.

3. Who Is Your Competition?
There’s always competition. Don’t ever go into a meeting with venture capitalists, angel investors or your best friend’s aunt and say, “There’s no competition.” They either won’t believe you or will assume the idea is bad (because there can’t be a market for something with no competition.)

Having accepted that competition exists, don’t panic! In fact, many will tell you that you should completely ignore the competition. I wouldn’t, because you can gain a lot of insight from them, but I also wouldn’t focus on them. Your killer idea has competition, but that’s OK. The competition may help further shape your idea into an even better one.

Is That All There Is To It?
Not quite. The above points will help you validate your idea, but in the end there’s going to be a gut decision that has to be made … “gut check time” … where you decide the idea is worth pursuing or not. Instincts and guts. I’ve never met an entrepreneur that isn’t teeming with them, and who relies on them constantly.

The key is that you definitely need to validate your idea. When an idea smacks you in the middle of the forehead and springs you out of your midnight stupor, don’t go crazy. Think about it, examine the idea in detail, let it stew in your brain, talk to people and plan.

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POSTED IN: Entrepreneurship, Starting a Business