There's a persistent concept that unique business or app ideas hold enormous value. In reality, the idea is just about 1% of a business's worth. The remaining 99% lies in strategic planning and execution. Given that, I've curated a list of questions, each demanding thoughtful answers - which will hopefully suss out whether or not you are able to execute an idea effectively.
Understanding Your Users
- Do you fully grasp who your intended user is?
- Are you certain this user group exists?
- Is your user the same as your customer? Are you sure they exist?
- Are they actually willing to part with money for your product/service?
An in-depth understanding of your users is more than just demographics; it's about their psychographics, needs, behaviors, and pain points as well.
Product Development and MVP
- What's your product development roadmap?
- Which features are essential for the MVP?
- How will you measure its success?
Creating an MVP allows you to validate your business hypothesis with minimal risk. They're extremely easy to over-engineer. It's your first real interface with the customer, serving as a crucial test for your overall concept. Consider an SLC instead.
Marketing and Customer Acquisition
- What's your marketing plan?
- Will network effects come into play?
- How much will marketing cost?
- Is that budget readily available?
Knowing the Customer Acquisition Cost (CAC) to Customer Lifetime Value (LTV) ratio is crucial for long-term growth.
Customer Support and Retention
- What are your plans for customer support?
- How will you retain customers over time?
- What strategies will be in place for upselling or cross-selling?
The journey doesn't end with customer acquisition - it extends into customer support and retention. A robust support strategy can turn dissatisfied customers into advocates, and retention efforts can maximize your LTV.
- Is the idea financially sound?
- What's the startup cost?
- What's the timeline for building the product?
- At what scales can you maintain profitability?
- Is there alignment between the Total Addressable Market (TAM) and your business?
- How will you outperform and penetrate existing markets?
A competitive market signals an opportunity - if you can outdo existing businesses in at least some areas. Sometimes the market is even big enough for two.
- Some ways to outdo another business:
- Differentiation: Offer something unique.
- Cost Leadership: A scale-based price competition can be risky but rewarding.
- Focus: Target a niche neglected by competitors.
Networking and Team Dynamics
- Who can help you spread the word about your business?
- Who can fill in your knowledge gaps?
- Who will be your emotional support?
The right combination of skills, personalities, and drive can create a powerful feedback loop that can succeed where many others fail. Even if it is a solo experience, you will likely need support and motivation from friends or family to continue pushing forward in the face of adversity.
Adaptability and Resilience
- Can you pivot based on new information?
- Do you have backup plans for challenges?
- Can you continue when prospects look grim? Or know when to quit?
- How do you resolve the tension between persistence and knowing when to fold?
And finally, are you able to find the answer to all these questions and implement an MVP before you hit a wall - be it time, energy, discipline, or money?