Vetting an Idea: How to Know Whether an Idea Is Worth Pursuing

Have you ever been hit by an exciting idea?

Most entrepreneurs have, and we know the feeling all too well.

You’re walking along –or driving, minding your own business –when suddenly out of nowhere you’re struck with an exciting idea. Sometimes it’s a plan for a new product or company, other times, it may be a way to improve a business process, streamline efficiency, or solve that problem you’ve been thinking about for a while.

Like a blast of icy winter wind, the new idea knocks us off our feet and makes us go, “Woah!”

Instantly, you’re fired up and ready to go; convinced that this idea is the one. It’ll change the world and make you a fortune –simultaneously, of course.

Unfortunately though, as you know, the reality’s a lot less rosy. The truth is that not all ideas are created equal. In fact, a whopping nine out of ten business ideas, or startups, will fail –and those are the ones that made it to the execution stage!

Whether you come up with new ideas every day or once a year, you’ll want to make sure those ideas are worth pursuing before you decide to move forward with them.

If you are looking to take your idea to the next level, here’s a look at some questions you’ll want to ask first. These questions will get you thinking, and help you to determine the validity of your ideas. Finally, we’ll also look at some tips for developing an action plan for taking worthy ideas from concept to execution and getting them out into the world successfully.

Questions to Help You Determine Whether an Idea is Worth Pursuing  

First, a look at some questions you should ask before you run with your idea.

Is This Something That You’re Passionate About?

Anyone who has started a venture or launched a new product can tell you that your heart absolutely needs to be in the idea or else it just won’t fly. The truth is, when you’re an entrepreneur, you’re going to put countless hours into developing your business and products, and you need to be at least somewhat passionate about what you’re doing in order to have the stamina to see it through.

NOW, this passion could take many forms. For instance, you could be passionate about the idea itself, the products you’re selling, or even the rush that you get when launching and growing a business; whatever it is though, you’re going to need passion to see you through.

Have Your Run the Numbers?

Of course, you’ll want to do the math before you run with your idea. While a lot of your financial projections will be based on assumptions, you’ll want to run through a few potential scenarios, and see if the business idea or opportunity is something that will produce a profit that’s sustainable, or high enough to justify your time and effort.

Be honest with the numbers, and always underestimate your income, and overestimate your expenses. Here’s a look at some tips for creating budget spreadsheets and profit and loss statements.

What Risks Are Involved?

Next, it’s important to assess the risks that are involved. While you don’t have to spend all of your spare time poring over every potential thing that could go wrong, you should conduct a careful and calculated assessment of everything that you stand to gain, and lose should something go wrong.

Knowing the risks before you start will help you to determine whether it’s an idea that’s worth pursuing. Are you in a position to risk the start-up capital? Do you stand to lose a significant amount, if things don’t work out? Being informed is key to assessing whether it’s a good idea –and the right time.

Can You Test the Idea or Mitigate Some of the Risk First?

There’s a lot at stake when you order up 2,000 shirts from China. There’s a lot less risk if you only order, say, 20. Before you launch your big product or idea, ask yourself if you can do so in a way that will eliminate some of the risk from the equation. Do you really need to obtain $100,000 in venture backing before launch? Can you get by for less, or bootstrap as you grow?

While some sectors will obviously need more funding than others, many web-based companies can be started with relatively little money down. Avoid the temptation to splurge on new office furniture or expensive facilities right up front, if you just don’t need them.

Does This Idea Solve a Problem or Fill a Gap in the Market?

Your idea doesn’t have to be revolutionary, but it does need to solve a problem or fill a gap in the market. Before you devote time and effort to developing your idea, you’ll want to do some research to see whether it’s unique, and make sure it’s not already being done.

If you do discover that you have some competition, that doesn’t necessarily mean that you have to throw in the towel, but it does mean that you’ll need to work to differentiate yourself from the competition in some way. What does your product do that the competition doesn’t?

How will you convince others (in a non-salesy way, of course) to buy your product? Chances are your idea will have been inspired by your own experiences, so draw on those when determining how you’re going to set yourself apart.

Have You Identified Your Target Market?

Before you run with your idea, you’ll want to take the time to identify your target market. This may seem like something that you’d do after launch, but the truth is that doing it ahead of time is a good first step.

Determining who your target audience is will allow you to conduct surveys; helping you to gauge the viability of your product or service and assess demand. It’ll also help you to identify areas where you might want to pivot slightly from your original idea or concept.

Have You Done Surveys?

I know I know, the last thing you want to add to your already busy schedule is surveys, of all things, but believe it or not, surveys can be extremely beneficial. Taking the time to conduct market research before you launch can help to save you from a tremendous amount of wasted time.

For instance, say your idea is to launch a new design program. Taking the time to ask designers –or your target audience if they’d be interested in a program like this can help you to determine whether it’s something that you should move forward with, before you sink a lot of money into it. Additionally, surveys can prove to be a valuable source of inside information.

For example, asking your target audience what they’d like to see in a software program will give you an idea about what’s important to them, showing you where you should focus your efforts in terms of product development, marketing, sales copy, and more. Free programs like SurveyMonkey or SurveyMoz make it easy to conduct surveys via email.

What Type of Feedback Are You Getting?

Once you’ve done surveys, you’ll be able to assess the feedback that you’ve gathered. This feedback can prove to be tremendously valuable and will help you to know which direction to go. For instance, if the responses reveal that the problem you were originally looking to address really isn’t a pressing issue to your audience, it may be a sign that the idea isn’t as viable as you had thought.

On the other hand, if there’s a lot of feedback on a certain feature that your product doesn’t contain, it may be an idea to go back to the drawing board and think about including that feature in your products. Don’t ignore your feedback! Instead, learn from it, and use it to fuel the success of your innovation.

Can You Take It for a Test Drive?

If possible, you might consider taking your idea out for a test drive. Make a sample product that you can test or offer your services for a limited time, or to a select audience only. During this time you can work the bugs out, so to speak, and see how your offering’s received before you go mainstream.

Asking yourself questions like:

• What is working?
• What isn’t working?
• What needs to be improved?
• Which features should we eliminate?

–can help you to perfect your product.

Platforms like Indiegogo and Kickstarter can be another great way to get both validation and funding.

Sure, you could just dive in without testing the waters first, but the question is why would you want to? Assessing your idea’s validity before launch will help you to eliminate a tremendous amount of risk from the equation, allowing you to move forward with the foresight and knowledge that your idea is one that’s worth pursuing.

Developing an Action Plan

A great idea is nothing without execution.

Scott Belsky, author of Making Ideas Happen: Overcoming the Obstacles Between Vision and Reality says that having an action plan is vital for turning ideas into reality. “Ideas are worthless if you can’t make them happen,” says Belsky. He cautions against falling into what he calls, “an idea trap,” where ideas are formed, but fizzle out before they’re executed.

Instead of primarily focusing on generating ideas, Belsky recommends working to develop the capacity to make ideas happen.

Here are some tips for creating an action plan for your idea, and bringing it to market successfully.

Create a Minimum Viable Product

Often, the best way to bring something to market is by creating a minimum viable product. This is a basic, barebones version of your product that has the core features, but no extra bells and whistles. This gives you the advantage of creating and launching a product, without having to spend an exorbitant amount of time or money on it.

While this approach may not work if you’re in an ultra-competitive market and need those features to help differentiate you from the competition, it can be an extremely useful way to gauge demand, without having a huge investment at stake.

Richard Branson knows it. In Virgin Atlantic’s early days, they started with a single Boeing 747 that operated on just one route. They were able to determine that their idea was one that was worth pursuing, and were eventually able to expand to the scale that they are today. There’s nothing wrong with starting small, and often it’s the best approach to take.

Test It Out

Again, if you can, test, test, test at every crucial step of the way. Start small, start reasonably, start with a minimal investment –and test it as much as possible before you go big. Get an idea about market supply and demand, and see what you can do to bring your product to market without sinking a lot of money into it.

Once you’ve launched, you can test the success of your product, revenues, and profit to ensure that you’re on track to meet your goals, or to see if you should adjust your strategy in order to reach them some other way.

Set SMART Goals

While there are lots of different goal-setting methods that you can use, all of the best ones are tied to results and some sort of time-frame. The great thing about SMART goals (Specific, Measurable, Attainable, Relevant, and Time-Based) is that they keep you on-track, accountable, and moving forward. Plus, the “measurable” aspect will ensure that you regularly check in to gauge your progress.

Launching a product or starting a business involves a lot of hard work and plenty of steps, and you’ll want to ensure that you have a plan in place before you start to save you from wasting time and money on actions that won’t produce results.

Get Feedback – Again

Feedback’s vital during the concept stage, but it’s also important after launch. Ideally, you should look to create a continual process of seeking out feedback, and adjusting your approach or strategy to cater to market demand. Don’t be discouraged by negative feedback, instead use it to perfect your approach and grow.

While it’s important to pursue your ideas, it’s just as important to know when to hold back. The good news though, is that evaluating ideas is something that becomes much easier over time. Once you have a few ideas under your belt, you’ll be far more adept at identifying good ones, and will know what signs to look for –and pitfalls to watch out for as well.

Entrepreneurs: What’s your approach? Do YOU vet ideas before pursuing them, or do you generally dive right in and test along the way?

 

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