Posts in "Ideas"

Ideas

Are you different?

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“Price is what you pay. Value is what you get.” Warren Buffet

Coming to stage 2 you have identified and quantified  customer and market need. Now is when things begin to get interesting. For any new venture to succeed it requires a value proposition. Without it you will find yourself lost. This has happened to me in the past and it still does sometimes. The typical situation is you identify and quantify a need,  then you assemble a team as fast as possible and execute the plan based solely on gut feelings. Further down the line, if you have not constructed a valid value proposition, you and your partners  have to restructure the business to make it work. So the key is “create greater customer value in comparison to the value being created by your competitors” and document it extensively before starting the venture.

Being able to quantify this value and bring it from being an abstract thought in your head to reality is not the easiest of things to do. I list down the following four factors when breaking an idea down.

Need: “What is the important customer and market Need?

Approach: “What is your unique Approach for addressing this need?”

Benefits: “What are the specific Benefits per cost that result from this approach?”

Competition: “How are these benefits per cost superior to the Competition?”

I realize that initially creating a value proposition based on these four factors is difficult. Sometimes you can’t identify a direct competitor, calculating benefit vs cost gets complicated or a host of other issues. The important aspect is that you have to start thinking about these factors and over the passage of time you will incorporate many permutations to come up with a winning value proposition. To go about this effectively here are a couple of helpful tips:

1. Talk with your prospective customers and clients about your new concept and get feedback. Remember your customers are out there in the real world and not your office. Get out there and get to know them a lot better.

2. If possible create a prototype for your service which will help your target audience to visualize what it is that you are selling or providing. Also let your customers take it for a spin and see how they interact with it.

3. Do a thorough competitor analysis to document what are the alternatives out there. This will also help you to understand where it is, that you have to create value for your target customer.

4. Study the market or the industry that you are wanting to operate in. Deep market knowledge and understanding the dynamics between the players, government and competitors is critical. There are a lot of great market research reports on the web. Get as much information as you can to make an educated decision on the future growth and scalability prospects for your business.

Your first draft for the value proposition will be far from perfect. However, remember that the journey to success is usually not a straight line. IDEO a leading design firm states, “Fail often to succeed early.” I think that should be the motto for all entrepreneurs. I have started businesses which were headed in one direction when we started and are operating in a completely different space now. The most important things needed to help make this journey worthwhile is a great team, get your NABC proposition pat down, be passionate and proactive and then……enjoy the ride!


p.s Stage 2 requires a lot of time and dedication to so make sure you do this step properly. Don’t be in a rush now because it will cost you dearly in the future.

Ideas

Does anyone care?

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“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so. “
Mahatma Gandhi

You think you have got it. That one idea which is going to create a whole new space in the market or cater to an unmet one. Careful now, this is the first step in the process. Passion, enthusiasm and belief in your idea are prerequisites to move forward. The next step is when you take your idea a revolutionary concept of renting books. This idea stemmed from a need to continuously refer a lot of books as I am a research scientist. Due to the unavailability of enough libraries in the city I live in, I am forced to buy a lot of books. Thats when the Eureka point takes place, when I wonder if it is possible to setup a business model where we can essentially rent books for stipulated periods of time.

This may seem like an idea with potential at first. However, the most value it has right now is because it addresses a current need of my own. So now is the time that to do a lot of research into the particular segment that we are talking about.

I would first talk about the idea with just about anyone who would want to listen. I would structure surveys, if resources are available focus groups can be conducted and research into buying patterns of customers currently buying a lot of books, a few books , or no books. If at this stage I get a positive response I would then focus my research efforts on the current suppliers of the product. I would begin the process by identification of libraries in my city or region. Would be looking to see numbers on, how many members does the library have, how many books are borrowed each year, what were the popular subjects, what is the process of borrowing, are there any cost involved, how many books are never returned?

Once we are done with this segment , then begin the explore the book stores. How many of those are there in the city, what is the average size of the bookstore, what sort of varieties do they hold, how many books were sold in the past year, what were the popular subjects, what are the average margins on book sales, how do they promote new books. This is just the tip of the iceberg. I hope I have got the point across that current industry numbers and facts are important to gauge just how big your market is currently and what sort of percentage we will be looking at to achieve our end.

We should then have a rough idea of what the figures currently look like, whether there is an upward trend in the market for book sales or a decline. Whether the idea can feasibly be implemented on a national scale if the correct resources are available. This would be the number crunching aspect of the entire exercise, which is when simple feasibility studies are conducted and we get a good gauge on the major questions that we want to be asking at this stage:

1. Is there an important customer and market need?

2. Do we have a unique and feasible approach on fulfilling that need?

We are now at the stage where if we are happy with our initial feedback and response about the idea we can begin on developing it further. Only move to stage 2 once you have clearly identified a substantial need in the market. I have come across countless individuals who when I ask this question, “Would anyone really care if they use or don’t use your product?”. Usually its silence or they reiterate their products list of features again. Don’t make that mistake make sure your idea is backed with a customer and market need which has the inherent capability of making a difference and scaling to a global platform.

 

Ideas

Eureka!

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“If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.” George Bernard Shaw

A lot of people usually ask the question “How did you ever think of this concept?” or sometimes you are the one wondering “I wonder what the guys who created YOUtube were thinking about?”. These are very good questions to be asking, in fact if you are  part of a group of people asking questions like this you are already well ahead of most of the population. The reason being, that you are beginning to question the world around you. I feel this was a major breakthrough for me, when I started questioning things and not just accepting them for what they were.

All ideas usually address a certain customer need or add value to a certain process to make it better. This is how I remember starting up my first business in university. I had a friend who was part of the student union and talking about a tender which he needed to get quotes for. It was for the basic printing of name cards. My partner and I decided that if we could get the basic machinery necessary we could provide a much greater value added service. This led to the launch of our first design and print company. In the years to come we helped them with a range of projects and being physically on campus we started to get orders from a lot of other student-based organizations. If you have identified a customer which has a current need you can fill and add extra value to it, you are well on your way to developing something which has great potential.

Open your eyes to the world around and be on the constant look out as to where there is a need and value can be created. Once you have got a vague idea that is the part which separates the doers from the talkers. This week I am going to take your through my thought process of how you can take a simple concept and rigorously test it to see if it can be made into reality. The process which I use is a mix of experience and lots of helpful tips I have got from books such as Innovation – Curtis Carlson, Purpose – Nikos Mourkagiannis and Execution – Bossidy Charan and Burk.

However the most important part of the process is the one discussed in this post. Identification of the idea and a deep commitment with enthusiasm about it is a defining part of this process. Without it I feel the spark is not there, so if you have come up with an idea then you should seek to discuss with as many people as possible. Talking with individuals with experience in that industry gets you insight which is priceless. Enthusiasm, passion & a constant interaction with others about this idea is vital to its success.If you are asked to join a team and be part of developing a concept then do as much research into the idea as possible. Think about different angles and permutations that it could work in. You have to be excited enough and  get your blood flowing, then  get your team together and………………now you are ready!