Distinguish Good Business Ideas From Bad Ones: You face fresh business ideas all the time, whether you are a Business Development Manager, a startup founder, or a risk investor. There is no lack of fascinating thoughts and ideas in the realm of risk capital (VC). The most tricky task is to differentiate between the promising and the condemned. Startups are so anti-intuitive that you can make many mistakes if you trust your instincts. I will share four key indicators in this article to differentiate between good and bad ideas.
The following is a good idea for a product or service:
1. For genuine clients, it solves a real problem
By “genuine problem,” I mean a small group of people need your answer severely. The folks who are already paying for tackling the problem are still not satisfied with the solution. I’m talking about “actual clients” who are willing to pay for your answer.
Take a social network for iPhone owners, for example. It would appear promising, as more than one billion active iPhones now are available worldwide, and the iOS users tend to stick closely to the Apple brand.
You would have millions of users if you had only 1% of them. Some of these can be monetized for a significant profit later on.
Sadly, that won’t work statistically. That’s because you’re going to probably never hear ‘I don’t need it or ‘I won’t utilize it when you attempt to attract people. Normally, the original feedback is “Maybe I’m going to attempt it later” or “I can think about it or someone.”
Customer love and hypothesis don’t fall into a trap. Seek out difficulties of a restricted audience with an urgent need; do not love yourselves, but invest money to solve your wants. The most excellent strategy is to work on something you want and bear if it was provided to a different organization.
2. These features give people enough encouragement to start using or switching to a new product or service.
A critical situation must be resolved very rapidly. If you have a tight group willing to pay so much for your answer, even if they don’t have a beta name, the notion is definitely good. The costly problem involves paying a great deal to resolve it; you can therefore charge a lot.
The costly problem involves paying a great deal to resolve it; you can therefore charge a lot. A circumstance where people have to fix the problem is an acute problem because it forces them to do so. And finally, a common difficulty is my favorite guy. These are challenges that people experience every day, every week, or every month.
Consider face masks, for instance. Face masks were made urgently, compulsory, and regularly required during the Covid-19 pandemic. This explained their growth in the market when worldwide deployed pandemic measures.
3. It helps to solve a specific problem.
To filter business thinking, follow the SISP approach. This popular VC term signifies a “problem-finding solution.” It is a standard error first to construct a solution concept and then try to discover an issue that matches the solution. This happens if founding engineers are enthused about technology or founding marketers focus on the new technology or hype case.
Consider Uber for electricians, for example, an application in which you push and get an electrician. The way it works is evident, but it does not explain why people need it – and why they are prepared to pay good value for money. What’s the problem solving this? Why are they finding it difficult to solve now? Meanwhile, only the answers to these questions will show you how to advertise your product, how its worth may be matched to its clients, and how you gain from your solution. Remember that customers don’t purchase what; they are buying why
4. The market has numerous competitors
Although contradictory, a crowded market is a good indicator since it shows that demand exists and that none of the solutions that have been developed are very satisfactory. This is one reason why VC and experienced Angel investors have no competitive edge over ideas. It’s a sign of a good idea to worry that you are late for the party.
Usually, any fast-growing business idea (a successful startup) should enter a market with current competitors (with some secret customer information, preferably) or enter a tiny, soon-to-growing demand.
For example, Google, Uber, and Yelp were small teams with acute insights for their customers when they entered the market. They came into markets controlled by significant firms while still being the market leaders. Microsoft and Facebook have meanwhile taken the lead by focusing on a restricted client group that has exponentially expanded at a later date.
You have all the grounds to proceed when your idea deals with the acute suffering of a specific client group, individuals are currently paying for a service, and there are rivals already. Not every concept that checks these boxes is a good startup idea, but almost every good startup idea is measured.