How to Test Business and Product Ideas
Business ideas are like kittens. Who doesn’t like kittens?
When someone shows me a kitten, or a business idea, the kindest thing I can think of is to get rid of it.
Not the kitten! Wow. I just lost 80% of my audience there.
But the business idea. Get rid of the business idea. Still here? OK Let me lay this out with three principles that attendees of my sessions and readers of Backward Entrepreneur hear over and over again. Here’s the first one:
“Nothing can derail success faster than another good idea.”
–Backward Entrepreneur
Why so anti-idea? Because we as new entrepreneurs put too much value on an initial idea. We love it, pet it, and look forward to all the good feels it will bring. Just like a kitten. But ideas are a dime a dozen. Many of us can’t stop coming up with new ones. New ideas can cause us to lose focus on the ONE idea that deserves 100% of our attention. So that leads to the second principle:
“What separates entrepreneurs from dreamers is the ability to move what we imagine into reality. “
–Backward Entrepreneur
This means entrepreneurs must kill ideas that could sabotage our one idea–our primary focus. It means killing ideas that could drain our bank account, squander our investors’ funds, and take hundreds of hours only to fail. I’ve seen it so often that it’s very hard to smile and be encouraging when someone presents an unvetted idea (but I’m working on it!), Which leads to the final principle of ideas.
“The ability to select one idea, to the death of all others,
–Backward Entrepreneur
is the mark of a successful entrepreneur. “
There is a science to sorting through new business and product ideas. A process.
I call it, “The Idea Gauntlet” and cover that process in Chapter 2 of Backward Entrepreneur.
The Idea Gauntlet gives entrepreneurs a way to test and rank new product and business ideas. It gives us a reason to either set aside a good idea, or share it with someone who can focus on it, or choose it as our primary focus.
The four primary trials of the Idea Gauntlet are:
- Fortified Beach Test: Is someone else already doing this well enough?
- Sustainability Test: Is it likely to be profitable to make, promote, and sell to a market I can reach?
- Protection test: Does it need protection? Is it protectable?
- Funding test: Is it probable I can get the required capital for this idea?
If your idea makes it through the Gauntlet, there is a much higher likelihood that it’s worth your time and focus.
If you already have your copy of Backward Entrepreneur, roll through Chapter 2, “Ideas and Products” to test your ideas in the Idea Gauntlet. You’ll also get some stories of how others have approached new ideas, how this applies to “selective optimism” and the story of have a proprietor of an Italian restaurant in New York saved John and I from certain death. Or at least from starvation.
P.S. I should qualify that we are talking about new product or new business ideas. Ideas related to improving or innovating — those have their own processes!