Archive for the ‘idea validation’ tag
Business is about adding value to customers
The last time we had a book review about finding ideas. Now, we want to discuss a little more about turning that idea into a viable business proposition. The key elements of a successful business is adding value and good execution. We will discuss the execution piece later but lets now consider the whole issue of value.
Once you have a so-called brilliant idea, it is worthless until you can prove that potential customers find it useful. This brings me to the point that true business practice has a lot in common with engineering. The reason I say that is in the process of developing a business, the ideal approach is to test and make changes as you discover. This is basically how the scientific side of engineering works; You have an hypothesis which you test out and based on those results, you improve, discard or make any worthwhile adjustments.
The term use mainly at the Stanford University business school is Customer Development. This involves customer discovery, validation and so on. The philosophy is that you discover an idea then you make some assumptions on the value it would create for a specific group of potential customers then you test out those assumptions. The idea of testing has the benefit of ensuring that the customers really have an interest or whether you need to make changes to the initial product idea.
In general language, you find an idea, then perform market research to establish whether there is any need for the idea. Once you have sufficient data from the research phase, you need to validate whether that is indeed true. One simple way could be doing surveys with potential customers or preferably interviewing people to get a proper feel on the interest level for your solution. In the end, your goal is to solve an existing problem out there. A simple example of solving a problem is to make an battery only car. Does the car running on battery has any real benefit to the average consumer? Maybe not in the short term but for those whom are more environmentally conscious, they would jump at the idea immediately.
The moral of the story is that you can have a very successful business life but you have to focus on how to deliver value to the market place. This process is actually the most critical to have a business in the first place and this means you have to be willing to test and make adjustments in an agile fashion.
The next book I will review here, covers many of these points and its called “The Lean Start-up”