Having an amazing idea for a product or business can be incredible, and extremely exciting. However, if you don’t know what to do with it then you may end up feeling lost and frustrated. All kinds of people are starting businesses these days, so why shouldn’t you? In this short post, we’re going to tell you what to do if you have an idea for an awesome product. That way, you can avoid some of the common pitfalls and mistakes. And who knows, you could end up with the next big growth product.
One of the first things you need to do with your idea is figure out who it is for, and why it’s so great. What sort of problem does your amazing business idea solve? It might solve a problem for you, but this doesn’t necessarily mean it’s solving a problem for others.
What market is it addressing? What segment of that market? Or what sub-segment? Trying to build a “one size fits all” product that works for everyone is difficult. Try to identify your ideal customer, and build a product specifically for them.
You can even use “personas”, a concept from UX design theory and Design Thinking, to help you understand your customer. You can create a cast of personas or characters (fictional people but based on real data), that describe some typical customers and their attributes. Make sure these are based on real research and data and interviews, not assumptions and generalisations.
You need to do extensive research, gather feedback, and prove your assumptions. The book The Lean Startup describes the best way to do this – with an MVP. A Minimum Viable Product lets you build, measure and learn. This way, you can make informed business decisions while minimizing cost and risk.
Your idea may be so good that it’s already a business. You need to make sure you’re well aware of any competition you may have, so that you can research them and differentiate yourself. You don’t need to reinvent the wheel, but you do need to figure out how you’re going to set yourselves apart from other businesses.
One thing you need to keep in mind is that competition isn’t necessarily a barrier! It just means that there is potential for income here, otherwise there wouldn’t be any competition. You just need to make sure that you understand that competition, and are able to beat it.
You need to figure out your Unique Selling Proposition, which sets you apart and makes people want to buy from you. Rather than from one of your competitors.
When you have a good idea of who your business is for and how you’ll differentiate, talking to potential customers is key to ensuring your idea is viable. Try to put mockups, demos and prototypes in front of them, as early and frequently as possible.
You need to also make this a regular communication. Too many businesses fail because they do research initially, then assume everything is fine. You should be regularly gathering feedback. Not just from your customers, but also from potential customers, competitors, and market analysts.
Don’t forget your finance! Lots of businesses go under because they haven’t put in the legwork on the financial front. You need a “runway” of cash on hand, so you can keep your business afloat while you are working hard to bring in revenue
You’ll need a simple but effective system for accounts payable and accounts receivable, a balanced budget, and build out some financial projections. Make sure to explore a few different scenarios, including a worst-case one. And don’t forget insurance and and limited legal liability.
Establish a good relationship with a friendly banker. Make sure they understand your business and your financial position well. Go with an established and reputable lender who you know will be there for you if things get tough and you need some extra financial help.
You’ll need to stay on top of your obligations too, like tax, payroll and compliance. Get proper legal advice if you aren’t an expert in this area. It’s not something you should skimp out on. Or it could backfire and have serious ramifications.
The infographic below will help you to figure out how the marketplace affects product development, so take a look.
credit to University of Alabama Birmingham