Assessing Your Startup Idea
It’s funny how easy we are easily carried away by one seemingly good business idea. There are moments when we lose our objectivity because we are so passionate about this concept playing in our mind.
Admittedly, some breakthrough innovations were powered by passion combined with courage to venture in unknown territories. However, we need to wake up from our dreams and start facing reality.
Is my business idea viable?
These are the angles you must consider:
Product Benefits
Identify all the benefits your product can give to your intended customers. Once you have a list, compare it with existing brands in the market and start eliminating similar benefits. This will reveal if your product has some strong advantages or simply a me-too product.
Market Dynamics
If you are familiar with the industry this will not be much of your concern. In case you are new in this playing field you must thoroughly research current business practices and future directions of the market.
It also involves identifying direct and indirect competitors in your chosen category or industry. Typewriter is a classic example of business failure due to poor reaction to market dynamics and indirect competition from computers.
For a time, Kodak’s slow reaction to shift to new digital technology nearly ruined the business.
A formal and more rigid approach of this process is called SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis. A comprehensive post about this tool can be viewed at Internet Marketing for SMEs.
