Do you have a good business or product idea?
I discuss business models and ideas all of the time. Its one of my favorite things. However, about 9 out of 10 ideas that someone (or even myself) brings to my attention is obviously flawed. Starting a new business or launching a new product is like playing poker: You got to know when to put your chips in and when to fold.
Here is my 10 point rating system for most business ideas. Give your idea 0 points if its an absolute negative, 1 point if you are unsure either way and 2 points if its a absolute positive.
- Is your business or product in a under-served niche (ie not a sexy industry that everyone is trying to get a piece of)?
- Do you have deep understanding of the industry or do you have a close relationship to someone that does?
- Is the idea easy to execute on (ie can you see clearly how to serve the market and all existing technology exists and is proven)?
- Is the market big enough so that you think you can easily sell 1000 units per month at $10 per unit, 10 units per month at $1000 or equivalent in billed hours of service?
- Can the business be revenue positive in 6-months?
- Can the business be automated or are profits recurring (ie could the business be successful with minimal human resourced or still be successful with minimal oversight by the founders)?
- Are there any barriers to entry for your market or possible intellectual property opportunities?
- Can you start the business without substantial upfront capital outlays (ie no inventory, etc)?
- Can the business stand on its own (ie doesn't need a huge existing customer base, mailing list, big advertising outlays, or additional features to make it an full product)?
- Do you have any other secret sauce not covered in the above?
There you have it. Getting a perfect 20 on this would be an ideal business in my opinion (something automated, good / quick revenue production with some cheeky barriers to entry). For reference, our four brands I'd rank as:
- Hobocans/HoboHookah: 12
- Constitution: 14
- Mementum: 13
- SlangDang: 12
If we were starting out at square one again, Constitution would definitely be the obvious business to start. Its a good revenue producer, but does require a lot of human time and cant really be automated. Hobocans requires lots of capital upfront, but could be a nearly fully automated revenue stream or a pretty good business to sell down the line. Mementum is all about producing little revenue streams, but its a slow starter. SlangDang is all about the secret sauce, and is definitely the most risky out of the bunch in terms of revenue prospects, but hasn't required much capital so far.
posted by Trent Krupp at
2:06 PM
0
0 Comments:
Post a Comment
<< Home