The best way to beat the competition as a startup is to stop trying to beat the competition. Take for example ideas that are truly disruptive and change the way business is done.
But such businesses come with the high risk of failure. As such, you need to ask yourself a few hard questions to validate your idea and ensure you are the right person with the right resources to win. Ask yourself:
How unique is my idea?
Do initial market research. This is important to find out how many businesses are working on similar ideas. Then you can see whether your idea will truly add value to the industry. Your market research might show that no one else is working in that market.
This means you will be first-to-market with a particular product or service. While this may be exciting, it is important to look at whether anyone else has ever had a similar idea, but failed to turn it into a viable business. If possible, reach out to these people to see if they’d be willing to have a conversation with you about the factors that led to their failure.
Who are my customers?
Establishing a niche customer base is a major key. Say you are starting an apparel company. What age segment will it address. You need to be specific about your customers.
Similarly, if you are developing a customer relationship management app, ask yourself whether you would be targeting big established chains or the main street dealers.
For a business to be successful, you should know all about its potential customers. How can you add value to the product and customer experience?
Does my product or service solve a specific problem?
Make sure there is a true need or demand for your product or service. Find a gap in the market. Why should your target market and the wider population care about this idea?
At the end of the day, if there’s no audience, there’s no million-dollar idea. Never try to create this need or demand unless you have as much money as Amazon.
Do I have the resources to build a business?
Building a product, as well as a business, takes money and people.
Look at equipment. Which do you need and how much will it cost? To minimise costs, look for second-hand equipment.
Consider overheads: If you’re going to rent a building, research market rates for rent and utilities in your area. Then calculate how many employees you’ll need and how much wages you can afford to pay them.
Don’t forget raw materials: If you are manufacturing a product or creating a new service, you need to calculate how much purchasing supplies will cost.
And finally inventory: Once you have created a product or service, you then must sustain an inventory so that you can meet customers’ needs at any service level.
In the real world, evidence indicates the vast majority of new ventures are self-funded, or bootstrapped. Attracting external investors takes much time and effort, and forces you to pay home to their interests. In all cases, people management and leadership are key.
Do I have the passion for this?
What can’t you stop talking about or thinking about or reading about? That’s the thing you should do. You can tweak it to be scalable by focusing in on a market niche, making it an online business, etc. The Pumpkin Plan by Mike Micalowicz would be a great book to read for this.
No matter how great the potential, if you are starting a business for the wrong reason, failure is likely. The right reason would be to bring value to customers, with a strong conviction that you are uniquely qualified to make it happen.
Think twice if you are trying to escape a problem, get rich, or satisfy others. Like the late Steve Jobs said, “The only way to do great work is to love what you do.”
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