The light bulb moment.
There are several things to look at when considering how to evaluate an innovative idea. My focus today is more on how well the idea and the idea owner fit with the entrepreneur’s motivations and expectations.
Get it
Is it a business concept that you “get”? Are you familiar with the pain point it’s trying to solve? Does it resonate with you? You’re going to be living with this idea a long time, spending countless hours making sure others “get it.” Be sure it’s one you’re fully behind.
Assess it
Is the market big enough for your goal? Is it a market that you can access – do you have connections there? What are the barriers to entry that you have to overcome?
These questions are important to determine if you’ll eventually have a paycheck. That threshold alone can make for a very nice lifestyle business. If it’s a venturable idea, you’ll need to show that your investors will see their own pay day.
Share the idea.
Share it
Don’t worry about the idea being stolen. Most people are too busy with their own ideas to steal one, and the idea is only a small percentage of business success when compared to execution.
You need to share the idea, especially with people that are potential buyers so you’re getting some degree of validation. You’ll also need to share with fellow CEOs and entrepreneurs to get started on the right path. There’s far more to be gained by sharing as compared to the risk of losing the idea.
Validate it
Look for ways to validate the concept. Nothing shows validation like a sale. Figure out how to sell your first unit, either through a consulting engagement or prototype. If that’s not possible, then poll prospects & experts in the industry. They can tell you if your earlier analysis is correct but there will be a greater margin of error. What people say they will do often differs from actual behavior.
Evaluate innovative idea people
At least as important as the idea is the person with the idea. Who came up with the idea? If you’re not the idea person, how does that person or institution align with your interests? Are their motivations similar to yours? Similar to “getting it”, you’ll most likely end up in a long-term relationship with the idea person or institution so you want to make sure motivations are aligned.
Some idea owners are so close to the vest with their idea that they will never see it commercialized. In these cases, the idea person can burn a lot of your time and others who will help execute, before all parties realize the idea will never become a business. There are others that are more open so you can properly evaluate the idea.
Consider how much capability does the idea person bring to the execution side of the venture? If none, it’s not a show stopper, but you will need to account for this as part of your business planning.
Keep in mind, there are a lot of ideas and idea people out there. Not all ideas are equal, not all idea people are entrepreneurs and the idea is only the beginning.