Mistakes to Avoid when turning an Idea into Business
What makes some business ideas flourish while others fail? What are the mistakes that people make while turning an idea into a new business? In this blog post, we will cover what are the common mistakes companies made and what a company should focus on to launch a new idea successfully.
Mistake #1. Waiting to have an unique, perfect idea with no competition
Do not waste time searching for an idea that no one else have implemented. Very often, I have heard clients saying very excitedly to their business partners about an idea they had, only to have an answer like ” Oh.. that’s not new, I know of company X doing that”.
Comments like this is simply throwing a pail of cold water. However, do not be discouraged by such response. In reality, there is no business without competition. When you go to the malls, there are many bakeries and many boutiques. You can hardly find a shop not having competitors. So how do all these businesses thrive?
Recognise that a great idea does not necessarily lead to a successful business. What matters most is the ability to differentiate your product and communicate your value proposition that customers want as well as build a business model that works. And you can achieve all these not with the business business plan that you work out. You perfect it along your learning journey.
What’s the solution
So the solution is to get started. Do not be intimidated by competitors. The fact that you think you have an idea, it’s because you have found some unmet customer needs where there are not many solutions. As long as the market is not extremely competitive or saturated, or some sunset business that new solutions are already available, then your idea is worth a try. Get started by gathering information about potential substitutes, and conduct user testings to know what customers want and ask yourself how you think your idea adds value. Build your prototype, have a phase where you test your business model potentials. You will learn as you work along and you will tweek your product as you evolve through the testing phase.
Mistake #2. Focusing too much on technologies instead of customers
Sometimes people can get very fancinated with new technologies. At first glance, a new capability can give the impression that it will be a new potential business. Then they sink all their resources on how to build it. In reality, it is easier to develop a new product than to get customers to want your product. Yet, what makes your business successful is the latter– getting customers to know and to want your product. Being able to develop a new product does not bring you any earnings until you can bring the product to market and get customers to like it.
What’s the solution
Once you decide to give your idea a try, and start your product development, you should start with prototypes and start testing the market even before you waste your time developing any marketing or business plan. This is when you can get insights into the product potential. Do not waste time thinking about how to build the perfect product. Focus your efforts on understanding what customers want and build it for them. Let your potential customers, partners, investors tell you their views. So, do not fall in love too deeply with your first idea or with the technology. Be prepared to adapt your products to what best serve your customers. With the information you gather about what customers want, build your marketing and business strategies around customers. Most importantly, stay motivated. Perseverence is what you need to lead new business.
Mistake #3. Perfecting the product instead of having a workable business model
You may have investors pumping in money to finance your product development. However, this seed money will not last long. You cannot afford to waste too much time trying to perfect your product. At a reasonable time, you need to bring the product into the market, launch it officially and get paid for all your hardwork. When you first launch your product, you might discover challenges to the business model that you first plan. Then you will need to tweek till you arrive at a workable business model that enable you to generate cash flow and be profitable as early as possible so that your business is self financing. If the business proves to be profitable, it will attract more investors and with greater investment, you can perfect your product further.
The question is, when is the right time to launch your product and bring your business model to live?
What’s the solution
Even when you are developing your product, you should be developing your business model. During the prototype period, you can test your business model potential, decide which is your target customer segment and what to charge. With the prototype testing period, you will know when your product is ready for the first launch if you already have a business model worked out. Remember that if you can get a workable, no-frills product that can solve your customer pain-point, you are ready to launch. Do not try to perfect the product. You need to launch the product to know if your business model work.
Mistake #4 – Bad Timing
A great product, particularly technology products, launched at a time when users are not ready to embrace the new way of doing things can pose great challenges to your new business. You may end up having to invest a lot into trying to change user behavior and that only gives time for competitors and substitute products to come in.
What’s the solution
Products and businesses flourish because customers like the products and buy them. Without customers, your business will not flourish. Everything begin and end with the customers. Hence, before you even embark on the business, while prototyping and gathering customers’ feedback, you will be able to assess if the timing is right. If the timing is not right, and especially if your budget is low, do not money going into that business.
In cooking, if you want to cook a great dish, timing is very important. When the temperature is right, you get the right texture and taste you want. Similarly, in doing business, timing is a very important element. Hence, if you know that the timing is right, do not wait. Get started, test your business model potential, tweak your product as you move along and learn from it. You will be able to succeed with the right marketing and business strategy.