By the end of this lesson, you are expected to:
– know how to select a great business idea
– learn how to value your idea
– understand the Ideation Framework
How to value your idea
Well, if you have decided NOT to share a real business idea that you have, that is totally fine in the context of our class, but you MUST understand that your idea by itself has almost no value. There are so many people in the world that many people may already have the same business idea as you.
A successful startup is 1% idea, 99% execution. The important thing is not your idea itself, but how you implement it.
Sharing your ideas helps you validate the market need for it. You may discover that there is no viable market for your idea and that you were probably overestimating the “genius” of your idea. It also helps if you can find a cofounder or team that shares your vision.
According to Derek Sivers, you can calculate the value of your business in the following way:
Let’s try to describe a framework to find and select business ideas.
Our process should look like the following:
1. Choose an interest area
2. List as many ideas as possible by analyzing needs and gaps
3. Select the best ideas
1. Choose an Interest Area
Think of a business sector you will feel at ease in for the next 5-10 years.
Try to see what element you should change to this idea to market it. Should you remove a part? Change the design of a common object completely?
(Optional) Some crazy ideas:
http://www.businessnewsdaily.com/7030-weird-animal-business-ideas.htmlYou see, some crazy ideas aren’t that bad, after all!
Creativity Exercise: What dream do you have that could potentially lead to a business idea?*
Whether personal or professional, big or small. When we dream, we are striving for a better life. Solving a problem that you have is an excellent way. In this case, simply beware of not creating a solution that you are the only one to like. Please list below (or invent) a few of your dreams/unsolved problems:
“Dreams lead to problems. Problems lead to innovation. Innovation is one of the foundations of entrepreneurship.”
– Ed Hoffman, Chief Knowledge Officer at NASA
2. Generate Many Ideas
A few options:
– through brainstorming sessions
– using crowd-sourcing
– by noting down every single business idea that you have (without filtering)
– by listening to other people or asking people around you what problem they have
Google “startup ideas” in a business sector of your choice. You will probably find interesting ideas. Write down one of them here.*
Have a look around you (at your workplace, at home), listen to your friends and colleagues.
You will easily hear about problems people have. So you can just try to find a way to solve one of them.*
Write the first problem you or someone you know face(s). If you already know a way to solve it, write it as well!
Look at what works in other countries or industries.*
Write here an idea that you liked and that you could apply to another sector, or to another place.
[Optional] The story of Rocket Internet
Rocket Internet is famous for cloning ideas and applying them to a market where the competition is low or non-existent (copying Groupon, Amazon etc). Read the following articles if possible:
Remember, from the first course, that there are 4 types of ventures:
1) innovative offering
2) new business model
3) better, cheaper or more efficient offering
4) targeting new customers
The common bias of people looking for a business idea is to focus on the first type of venture: innovative offering, which means finding “a totally new product or service”.
Optional] TED Talk: Where Good Ideas Come From
If you have some extra time (18min), we encourage you to watch this TED Talk.
Link to the video: https://www.youtube.com/watch?v=0af00UcTO-c
Filter Criteria 1: Is it a “must-have” or “nice-to-have” idea? Will someone get fired if the problem isn’t solved?
Filter Criteria 2: Is the idea easy to implement for you?
Filter Criteria 3: How much do you love this idea?
Filter Criteria 4: Is the market already educated for your offer ?
Will you carry alone the cost of “educating the market” ? Competition can be good sometimes…
Filter Criteria 5: How “hot” is your idea?
Use Google Trends or Google Adwords to see the search volume and its evolution.
Facebook was not the first social network. Apple was not the first company to create smartphones and tablets. Sometimes it’s better not to be the first, so that you don’t carry the cost of “educating the market”.
Being too early in the market can lead to severe losses.
An example of a Decision Matrix:
[Optional] Fundable Ideas from Y Combinator
For those of you who don’t know, Y Combinator is “the world’s most powerful startup incubator.” (Fast Company Magazine)
To see an enlarged version of the image below:
Finding a Great Idea – Nomiku Case Study
A lot of the time, a great business is born out of a personal need or problem. Let’s take a look at the story behind Nomiku, the world’s first wifi-enabled sous vide machine.
CEO and cofounder, Lisa Fetterman just wanted to solve a very simple personal problem.
“One day while I was cooking, I lamented about how there’s this one thing that separates restaurant quality food from home-cooked food, and that’s the sous vide machine.”
Sous vide is the method of cooking by putting food in a vacuum-sealed plastic bag and placing it into a precise temperature controlled water bath. Sous vide machines used to be large, bulky pieces of machinery that cost thousands of dollars and could only be found in high-end restaurants around the world. It just wasn’t a worthwhile investment for the home chef.
Fetterman was determined to change that by creating an affordable, well-designed, and equally powerful version accessible to anyone who wants one.
Ever since that simple idea in 2010, Nomiku has drawn more than $1.3 million in its two Kickstarter campaigns and is one of the most successful projects in the food category. The Nomiku can now be found in kitchens around the world, from the best restaurants in the world, to personal homes.
Check out this article to learn more:
How to Manufacture a Disruptive Product
That’s it for this week! Thanks a lot!
We hope you enjoyed it!
Are you interested in applying what you’ve learnt in a practical manner and analyzing real-life examples? Then keep on studying!
In Module 2 (General Management, Strategy & Leadership)
and Module 3 (Marketing & Sales), you’ll have the opportunity to review Case Studies based on the concepts taught.
See all MBA Online Free, here.