6 Steps To Determine Whether Your Billion-Dollar Idea Is Any Good
We’ve all had eureka moments—where billion-dollar ideas occur to us, and our hearts race at the possibility that they could work.
But how can you tell if your brilliant idea is as brilliant as it seems?
There are a number of reasons why a brilliant-seeming idea actually wouldn’t work. The main reason is that each of us is limited by our own local knowledge—the knowledge we possess as individuals, today. Most of us are extremely well-versed in certain subject areas, but there’s infinitely more information we don’t have than we do have.
Evaluating whether a business idea that seems viable is viable—whether it’s unique, necessary, and financially sound—is of the utmost importance. As you prepare to launch into the billion-dollar idea of your dreams, here’s a six-step framework for getting started.
6 steps to determine whether an idea is worth pursuing
1. Learn before you launch. Most entrepreneurs launch businesses in which they have some preexisting knowledge; others launch in areas which are completely new to them. In either case, it’s up to you to become a leading authority on your area before you launch your business.
How can you do this? Read, watch, connect, learn. Read books by entrepreneurs in and out of your subject area. Watch their interviews, documentaries, profiles—anything that reveals their methods and the means of their success. Connect with people whose insight (and connections) could be useful. Learn as much as you can before you launch.
2. Supplement emotion with data. The dawning of a new idea might be the best moment of all. The possibility seems endless; the opportunity seems great; and chances are, the notion of controlling your life is very seductive.
But passion alone doesn’t make an idea great. Assess key metrics like total addressable market (TAM), do market research to see if your idea is already out there in some form, get input from industry authorities on whether this idea is worth pursuing. Emotion sparks passion, but data determines viability.
3. Improve on things that already exist. While the most earth-shaking ideas shift the world from one mode into another, not every concept has to be entirely unique. Not every business has to be an Amazon or an Apple—and on a personal level, you may not want the pressure that comes with running a business at that scale.
Look for ways to improve upon a process or a product that’s already standard. A great example is Sealed Air, the company that makes plastic air bubbles for Amazon packages. They improved upon the existing systems of e-commerce and package delivery, and created a hugely successful business.
4. Make sure you can monetize it (repeatably). There are two potential hazards here: Either there’s no easy way to monetize your idea, or you can’t create repeatable revenue.
The arts are an interesting case here. The main issue many artists run into is that they think about the art first, and the monetization second (if ever). What results is interesting, stimulating work, with no monetization system—or a very weak one.
That’s an extreme example, but the point is instructive: Think about monetization early. Setting up a repeatable business model is as much a criterion of success as making a delightful product.
5. Get feedback. Feedback is essential at every step of the entrepreneurial process. Get feedback when your idea is just an idea. Get feedback when you’ve got a prototype/beta version of your offering. Get feedback when you’ve started to attract customers. Get feedback as you scale to see if your service is as good as it was when you were small and nimble. Never stop soliciting feedback—and taking it seriously.
6. Commit—but stay flexible. Companies can fail both because they pursue too many opportunities and because they stay too narrowly committed to their initial idea. There’s a fine line between commitment and flexibility, but it’s one that every successful entrepreneur straddles.
Great ideas aren’t born instantly. They develop over a long period of time. The iPhone, Apple’s flagship product, was launched 31 years after Apple was founded. It’s not their only successful product of course, but they’ve shifted gears, improved their offerings, launched new products, and changed the complexion of the company countless times over the years.
The overarching point is: An idea that seems great in the comfortable confines of your brain might not be as great once you introduce it to the outside world. Turning an idea with potential into a viable business means making as much of outside tools—wisdom, data, input, feedback, market influences—as you can.