How do you identify the most promising business concepts? This is a crucial question for any business developer who wants to create value, solve problems, and achieve growth. In this article, you will learn some practical tips and tools to help you evaluate and refine your ideas, and to test and launch them successfully.
The first step is to clearly define the problem you are trying to solve and the solution you are offering. You need to understand the pain points, needs, and expectations of your target customers, and how your product or service can address them. You also need to identify your unique value proposition, or what makes your solution different and better than the existing alternatives. You can use tools like the problem-solution fit canvas or the value proposition canvas to help you with this step.
To identify promising business concepts, conduct thorough market research, understand customer needs, evaluate competitors, assess market demand, consider scalability and sustainability, evaluate revenue potential, assess resource requirements, test and validate the concept, seek expert advice, and trust instincts. This comprehensive approach helps identify unmet needs, underserved demographics, and emerging trends, while also assessing market demand, scalability, revenue potential, resource requirements, and the ability to maintain a competitive advantage.
I believe the discussion here revolves around user needs and their expectations. Sometimes, we identify an unmet need and strive to address it. Other times, even for a need that has been previously identified and addressed, we respond in a different way, altering user behavior and expectations. For instance, both a car and a horse recognize the need for transportation, but each has addressed it differently, shaping user behavior and expectations in distinct ways.
The next step is to validate your assumptions and hypotheses about your problem, solution, and market. You need to gather evidence and feedback from your potential customers, partners, and competitors, and to test your solution in a realistic setting. You can use tools like the lean canvas or the business model canvas to help you map out your key assumptions and metrics, and to design experiments and tests to validate them. You can also use methods like surveys, interviews, focus groups, or landing pages to collect data and insights.
The third step is to evaluate your market potential and opportunity. You need to estimate the size, growth, and trends of your target market, and to analyze the competitive landscape and the barriers to entry. You also need to assess the profitability and scalability of your solution, and to identify your revenue streams and cost structure. You can use tools like the market opportunity navigator or the market validation scorecard to help you with this step.
In essence, we have outlined our business model hypothetically here, and now we want to analyze whether it justifies responding to this need. To do this, we can use a business plan, but it's crucial to remember that this business plan is not intended to be the final version; it's merely an initial analysis to shape our thoughts. In this business plan, we need one page to: 1- Define our customers. 2- Estimate the market size. 3- Explain our solution from a technical perspective. 4- Provide a rough financial analysis.
The fourth step is to refine your concept based on the feedback and data you have collected. You need to iterate and improve your solution, and to align it with your customer needs and expectations. You also need to define your minimum viable product, or the simplest version of your solution that can deliver value to your customers and test your business model. You can use tools like the pivot canvas or the product-market fit canvas to help you with this step.
The fifth step is to test your concept with real customers and users. You need to launch your minimum viable product and measure its performance and impact. You also need to collect feedback and learn from your results. You can use tools like the lean startup cycle or the build-measure-learn loop to help you with this step.
In this section, one of the most important and valuable resources to refer to for designing tests is Alexander Osterwalder's book 'Testing Business Ideas.' In this book, various tests for different types of businesses with diverse products are outlined, and it can be extremely helpful in this field.
The final step is to launch your concept and scale it up. You need to prepare your go-to-market strategy and plan, and to execute it effectively. You also need to manage your growth and sustainability, and to adapt to changing market conditions and customer preferences. You can use tools like the traction model or the growth hacking framework to help you with this step.
In general, for final categorization, we can say that a startup has two crucial and overarching processes. The first process is the problem-solution fit, and the second stage is the product-market fit, which this article has touched upon in various sections for both of these processes.