“When you are an entrepreneur, it’s not unusual to be flooded with ideas. From midday brainstorms to midnight inspiration, ideas always come when you’re asking questions or looking for answers”.
Five ways to qualify ideas(commentary):
1. “Uncover the problem“: In the Lean-startup methodology, identifying the problem precedes the idea. The idea might be a great solution but if it doesn’t solve someone’s problem, it has no market.
2. “Determine whether it’s a need or want“: Strongly agree – if the market needs your idea but doesn’t yet want it, will you be the one to educate the market?
3. “Benchmark“: This topic encompasses more than one lean startup principle. Is the idea unique? Are there competitors? have the idea failed before(and why)? What advantage does it have?
4. “Delve into the senses“: Walkthrough and visualisation are always good to flush out bugs in the concept.
5. “Seek opinion” says to “seek feedback” and “test your idea before you start investing“. Lean startup methodology achieves this effectively by creating a Minimum Viable Product(MVP) and testing it by selling it to a real customer.
We recently advised a client seeking to establish a Personal fitness business. The client contemplated investing in a Gym, hiring staff and outlaying cash for all of the legal outlays, such as company registration, public liability insurance, etc etc. Approximate cost: At least $500,000 including deposits, leases, etc.
We persuaded the client to approach an existing fitness centre and rent a space and a trainer for a couple of hours per week to test the concept. The fitness centre already had the equipment, leases, insurance and staff to meet the requirement and offered a low rate for an off-peak time. Approximate cost: $500. Result: TBD, but the client still has $499,500 in their pocket.