How do I know my new idea will work?
Thursday, 2 October 2008
Dear Aunty B
I have been running a services business for several years and need to take this struggling beast to the next level. Our team has come up with several ideas, but how do I know which one is worth pursuing? And what if it fails?
Thanks,
DN of SA
Dear DN of SA,
So what if it fails? I say that in a cavalier fashion, but all business comes with risk. But you know that, because you are already in business. You have to accept that there is a chance you will fail.
There, not so bad is it? Like more entrepreneurs, I’m guessing you actually find a bit of risk invigorating.
Now, how should you decide which idea is worth pursuing? Start by looking at what you and your business needs.
Do you need cash in the door? Well, which idea is going to deliver that?
Do you want to diversify, either by expanding your product range or going into an entirely different market? Then figure out which idea will you with that.
Once you’ve decided your priorities, it should become pretty obvious which ideas are going to work best.
And when you’ve picked the idea you want to follow up, make sure you do plenty of market research before you jump. You will never eliminate risks, but at least you will be able to understand and mitigate them.
Good luck,
Your Aunty B
Comments
Paul D Hauck writes: It's great that DN is out there finding those ideas to get behind – the first spark behind innovation is the hardest. Choosing which ideas to pursue is tricky, and there's both art as science to it. The one overarching issue, though, is that we almost always decide that question too quickly, too soon, and with too little information. Despite Einstein's third law (time is money), spending a little extra time to actually get the facts, and make real, informed decisions can pay off in spades – because your competition is probably making quick, uninformed decisions, and because you're likely to put a lot of money behind the ideas you choose, over their lives. These decisions have extraordinarily high leverage.
At the risk of banging on a bit, this reminds me of a lesson learned a few years back, when consulting in Korea. We had a team of expat westerners doing broad, sweeping IT work in one of the huge chaebol conglomerates. Our expat teams would get together for quick, tightly run meetings with clear agendas to make crisp decisions and set the beat to which we would all march. The client staff, however, would have long rambling discussions which never seemed to really resolve anything, and then they would all go off and act on their own views of what had been said and “agreed”. It drove us mad – and we were the consultants, so we worked hard to set them straight (and send them the bill, but that's another story).
They got their own back, in two ways. Their process was constantly exploring many more variations on every theme, while we were concentrating on one. Frequently, one of their team would come up with something off the beaten track, that we had not considered (and didn't want to retrospectively change to) but which offered considerable benefits. Even more telling was what happened when we hit a real problem. When we made a poor choice, it would inevitably come to light some weeks later, and we would have to fall back to change the offending decision – and lose a few weeks' work (though not the billings...). Our counterparts, however, always seemed to have someone who hadn't been comfortable with the original decision, who had just continued working as though things had been decided the other way – and all of the sudden, he's a hero, and they're a month ahead of us. Again.
Sorry for the long diatribe, but when you're creating something from nothing – design, innovation, creativity, and the like – it really pays to identify lots of options, and to have an objective look at them all. More options, more information, better choices. (Where do I send the bill...?)
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