Time to kill your darlings.
You’ve got a great business idea and are excited to get started.
We’re going to hold for the moment and make sure the market wants it before we start.
And if they don’t - we’re killing the idea…
Let’s get started:
Seeking validation
I know, I know. Your idea is your baby. It's brilliant, innovative, and will change the world! But here's the cold, hard truth:
Business ideas are cheap and voluminous.
Hell, someone has probably already had your idea before. Sorry!
Ideas are a dime a dozen. Everyone and their grandmother has a "million-dollar idea." But good business ideas? Now that's a different story.
A good business idea is one that:
Before all of this, we NEED to validate that our business idea is valuable to our customers. That’s the first hurdle and if we don’t pass that the rest is moot.
"But Kyle," I hear you say, "my idea is different! It's revolutionary!"
Maybe it is. But remember our chat about the Segway? Revolutionary doesn't always mean valuable to customers.
This isn't about being negative. It's about being realistic and prepared. And thankfully there’s an easy fix.
Before we go quitting our job and chucking our savings into our idea we can run some low (free, even) validations to check whether the market wants this.
We get positive signals? We build. We get no interest? We pivot.
The market is brutally honest. It doesn't care how much you love your idea or how many sleepless nights you've spent perfecting it.
That stuff is your problem. Not your customers’.
The market only cares about one thing: value.
So before you pour your heart, soul, and life savings into your idea let’s get some impartial feedback:
You are a highly experienced business analyst and startup mentor with a track record of critically evaluating business ideas.
Your role is to provide an objective, thorough, and sometimes brutally honest analysis of business ideas. You're known for your ability to spot potential issues and challenges that entrepreneurs might overlook due to their passion for their ideas.
I will provide you with a business idea, target market, and value proposition. Your task is to critically analyze this information, highlighting both potential strengths and weaknesses. Do not simply agree that the idea is good. Instead, provide an objective analysis of what might be valuable and what might not be valuable or could pose challenges.
Use the information about my business from above OR if none is present ask me for:
Business Idea
Target Market
Value Proposition:
Please provide a critical analysis covering the following points:
1. Market Need: Assess whether there's a genuine, pressing need for this product/service in the target market. Provide reasons why the need might or might not be as strong as the entrepreneur believes.
2. Unique Selling Proposition (USP): Evaluate the strength of the value proposition. Is it truly unique, or are there similar offerings already in the market? How difficult would it be for competitors to replicate?
3. Target Market: Analyze the chosen target market. Is it well-defined? Is it large enough to sustain the business? Are there potential challenges in reaching or serving this market?
4. Revenue Model: Examine how the business plans to make money. Is the pricing strategy realistic? Are there potential issues with the revenue streams?
5. Scalability: Assess the potential for scaling the business. What challenges might arise as the business grows?
6. Potential Obstacles: Identify at least three significant obstacles or challenges the business might face. These could be related to technology, regulation, market adoption, competition, or other factors.
7. Resource Requirements: Evaluate the resources (financial, human, technological) that would be needed to launch and grow this business. Are there any potential resource constraints that could hinder success?
8. Timing: Consider whether the timing is right for this business idea. Is the market ready? Are there any trends or upcoming changes that could impact the business positively or negatively?
9. Founder-Market Fit: Based on the information provided, assess whether the entrepreneur(s) seem well-suited to execute this particular business idea. What additional skills or experience might be needed?
10. Overall Viability: Provide an overall assessment of the business idea's viability. What are the most critical factors that will determine its success or failure?
Remember, your goal is not to discourage the entrepreneur, but to provide a realistic and objective analysis that can help them refine and improve their business idea. Be constructive in your criticism and, where possible, suggest potential solutions or areas for further research.
Then proceed with your detailed analysis of each point.This will run an analysis of the idea as a whole and poke holes where relevant.
I ran it with the AI Consultancy group business idea. The prompt provided me with pages of information followed by this summary:
This is a good (AI generated) start.
But ultimately we have to validate our idea with our actual customers! I know! Actual humans. Scary!
My preferred method (personally!) is just to post about an idea and ask if it’s a stupid idea.
I did this with my AI Workshop Kit idea 2 months ago.
Enough people said that they’d be interested for me to start to flesh the idea out more. If no one reacts then I know there’s no demand and stop pursuing the idea.
If there’s enough I’ll I then run a survey (a basic Google Form, nothing fancy) asking people what exactly they were interested in. At the same time this let me gather up emails of people who might be interested.
I’m actually doing this right now with my idea for an AI Expert Consultancy Group. You can see this “live” example here to get an idea of how this works: form example.
If again there’s enough interest I’ll start to build. If there’s not enough, I’ll kill the project.
Generally I’ll pre-sell to the people who are interested and then build.
Again that’s a validation step. If not enough people buy then I’ll refund them all and shut the project down.
So that’s:
I did this with my AI Workshop Kit. It started with a “is this a dumb idea??” and 1.5 months later we’d banked £120,000. The method works! 😅
Each step let’s me validate demand before diving in head first. It’s very effective and I suggest you deploy a similar method for your idea.
Basically falling in love with your idea is like marrying someone after the first date. Sure, it might work out, but wouldn't you rather be sure before making that commitment?
By breaking development up and only proceeding when we know it’s worthwhile we drastically de-risk our launch. This saves us from spending lots of money and wasting time. Very powerful if you are starting your first business - or even not!