Turning ideas into great businesses – inspiring learnings shared by those who’ve done it (Part 3)

The final instalment in this 3-part blog series continues my conversations with some of my favourite entrepreneurs and business experts. I asked them 5 questions.

Part 1, focusing on the 1st question,  was all about where they find their inspiration. Part 2 looked at how they came up with the ideas that transformed into their latest business ventures.

Here, we’ll zoom in on my remaining 3 questions:

  1. how do you decide if your idea will make a great business?
  2. what kills a great idea and stops it being realised?
  3. how hard is it to turn a good idea into a great business?

Here we go…

Q3: How do you decide what makes a good business idea?

Test it

One action word featured in every contribution from my friends: TEST.

Test. Test. Test. And then do it again.

‘Talk to lots of people’, Shaun advises. ‘See if it resonates with them, makes sense and is believable. Talk to clients and see how they react and would they be interested in buying it.’

And don’t fall into the trap of just speaking with ‘friendly’ customers or contacts, who will be gentle with their feedback. They may be doing you no favours. You don’t need to please everyone of course, but do seek out the cynics and the sceptics and really listen to what they say as well. You may not always like what you hear, but what they say may well strengthen your idea, not weaken it.

Tools to help test it

If your idea doesn’t resonate strongly during your testing exercises, then besides his own excellent ‘Crew to Captain’ publications, David advises that you promptly ‘adapt or abandon’ it.

David also suggests taking a look at John Mullin’s book, ‘The New Business Road Test: what entrepreneurs and executives should do before launching a lean startup’. You can download chapter 1 for free here.

Charlie recommends using Lean Canvas every time, a tool designed to help you very simply to create an actionable and entrepreneur-focused business plan. ‘Then talk to as many people as possible and listen hard to what they say in response.’ Really listen.

Tom and Hannah both agree and advocate building a minimum viable product.

‘The lean startup model is a great way to test an idea,’ says Hannah. ‘Create a minimum viable product – the smallest and cheapest way you can get a version of your idea to market. And then test and refine it with your target audience.’

(For more recommendations on great business planning and testing tools recommended by the successful businesses in my network, take a look at my earlier blog: Resources for spring-cleaning your business: what the experts use and recommend.)

Ask the hard questions

Ash strongly emphasises the ‘buy in’ element. ‘You’re looking for the simple answer to this too frequently overlooked question: will people pay for it? Nowadays, there seems to be so much focus on questions like: could I raise investment for it? People forget the fundamental part of business: selling something! If people are willing to pay for your product or service, then the rest can be built around that.’

Not getting side-tracked or ‘romanced’ by the investor/fund-raising approach is really important. Don’t build a business for investment. Build it because you believe in it and your target customers want to pay for it.

According to Harvard Business School’s Shikar Ghosh, as many as 75% of venture capital backed companies fail to deliver on the investments that they receive. Even worse, 30-40% of them end up failing. And why? A very significant contributory factor is not being able to sell what’s been created, because it was never properly road-tested and the hard questions were never fully or objectively asked.

‘The fundamental part of business is selling. If people are willing to pay, the rest can be built around that.’

Ash Phillips, Founder, YENA

Paul also feels that asking the hard questions is critical. Experience has taught him to always ask up-front and at the start: ‘who is going to pay money for this? Do I have the necessary skills to make it happen? How is it really going to play out in practice?’

And don’t forget to examine your worst case scenarios. Looking at what is the worst that can happen often helps to focus the mind on whether the outcomes may be worth the effort.

Laura essentially tries to pull her idea apart, to ensure that her eyes are wide open to what she may getting into.

‘I get online and research to see if my idea already exists and if it doesn’t, I ask myself why not? It’s a good way to check whether there’s actually any recognised demand for it, or if, for example, regulation or legalities are overly onerous. But,’ she adds quickly, ‘sometimes you have to follow your instinct based on what you already know and have learned.

‘I know that competition in my sector is fierce and it’s not the easiest business model to manage – lots of moving parts and relationships. But testing everything sensibly and finding a unique angle, as we have, that makes a really valued difference to our students and entrepreneurs, means it should – and does – work.’

Q4: What kills a great idea and stops it being realised?

Failure to road-test it

David points out the very obvious, and he’s right. If you haven’t road-tested your idea, you could be launching a dud. There’s no excuse for that these days.

Paul agrees. If your primary research results don’t look so good, you need to think long and hard before carrying on.

Fear

‘Fear is a big one, Sian says upfront. ‘So often you hear that ‘it’s not the right time yet’, etc. It’s easy to find reasons not to start, it takes real grit to just get on with it, make it happen and see where that takes you.’

‘Oh yes,’ Shaun agrees. ‘Self-doubt, fear, being afraid that it’s not perfect before you push it out into the world, (I’m talking from experience!).’

What we’ve all realised, however, is that everyone for whom this journey really matters feels fear. And it’s very normal and probably quite healthy. Fear means it matters to you. It means you’re alive to the worst case scenarios and hopefully have a plan for them. If you didn’t feel fear, you could well be in danger of missing something fundamental.

‘You have to be a doer not a thinker. It’s easy to find reasons not to start a business. It takes real grit to just get on with it, make it happen and see where it takes you.’

Sian Wingfield, Founder, PA&Go

Overcomplicating it

Leah considers this a lethal mistake: ‘in my team, we always ask the question: what would this look like if it was easy?’

Develop the ideas that keep things simple for your customers.

Stripping out unnecessary distractions, interruptions and points of friction or customer disappointment, makes a big difference to how far and how fast your target audience buys in to what you’re offering them. (It also opens up avenues to other potential applications that you might not have considered.) You essentially want to make it a nonsense for your customers to say anything other than ‘yes, I want it!’ when they encounter what you offer.

Don’t overcomplicate it.

‘In my team, we always ask the question: what would it look like if it was easy?’

Leah Hutcheon, Founder, Appointedd

Technical flaws

Paul blames these for killing a number of ideas before they can be realised.

It doesn’t need to be perfect when you launch, but it does need to work the way it’s supposed to. It doesn’t take much for customers to lose confidence in you or your product. Technical flaws risk interpretation as sloppiness, incompetence and/or corner-cutting – all of which can make customers anxious and/or disinterested.

People and money

Tom gives a very thoughtful and well-experienced view about what kills great ideas, borne of launching 3 successful businesses already:

‘There are a whole host of things that come to mind’, he says. ‘The obvious ones are a lack of funding and poor team management. If you haven’t got the resources to build it, or you aren’t able to sell the vision, you’re going to have a hard time making others believe in it.

‘Perhaps where lots of early-stage entrepreneurs and first-time founders fall down is their protection over their idea. If you hide away building something that you believe is great and don’t tell people about what you’re doing, you’ll never know if it’s something that people actually want. It’s really important to share your idea with as many people as possible; it doesn’t just help you acquire customers, it helps with sanity testing and making sure that there are others who believe in what you do.’

I am always struck by how valuable word-of-mouth recommendations are in opening doors to new possibilities – maybe even that killer break that you’ve been waiting for. Your early ‘sounding boards’ and ‘testers’ with whom you share your ideas are likely to be your very first brand advocates and adopters. If they’re already invested ‘believers’, get them on board and harness their goodwill and insights.

Returning to Tom’s point about funding, Paul takes a slightly different angle and cautions about putting too much in too soon – another risk factor that can stop you in your tracks.

Don’t sink all your money into building a business around your idea before you’ve tested it well and you are confident about the results; otherwise you may discover that if your first idea doesn’t work so well, you’ll have run out of funds and will be unable to adapt to your research results and keep the idea alive, albeit in a slightly altered format.

Not being able to sell it

This is Ash’s pet theme, it seems – and he’s right to keep raising it.

‘Lack of sales will kill something every time,’ he counsels. It’s why doing your homework and making sure that there’s demand for what you’re offering, before you go too far, is so important to your prospects of success.

It’s only a great idea if it sells.

Just do it!

‘Something else that stops a lot of ideas being realised is people somehow feeling they need to seek permission rather than just doing it’, says Ash. ‘Starting needs just that: to start! People will often talk themselves out of it before even doing anything. Just get started. That’s my advice.’

If you know you can sell it and you’ve tested it well, then to echo Hannah’s advice as well, don’t agonise over it being perfect at the outset; create your first version and get it out there.

‘Oh perfectionism, yes!’ laughs Hannah. ‘Thinking your idea needs to be completely fully formed and you need all your ducks in a row before you start. Or that you need to be an experienced entrepreneur (or ‘ready’) before launching. You don’t. Start before you’re ready and you and your business idea will grow together.’

“Start before you’re ready and you and your business will grow together”

Hannah Martin, Founder, The Talented Ladies Club

Other things, including you

Chris has a ‘bucket’ list. ‘So many things can stop a good idea’, he says, frowning. ‘Your own psychology, negativity around you, lack of support network, financial worries, unwillingness to take the risks…’

And yet, finding the mental strength to overcome these things, when in spite of them, we feel there’s still a great idea promising great opportunity, is something that we should actually celebrate a lot more.

It takes terrific strength of character and resilience to found a business. Just reaching the point where you launch your business into the world is a major achievement. For many of us, it’s the hardest thing we’ve ever done. Supporting each other is one of the most empowering and game-changing things we can do.

Entrepreneurship can make us selfish – and in many ways, you do need to be very single-minded and driven. But for me, one of the most wonderful revelations has been just how much of a difference you can make to others who are also starting out and forging  ahead. Give back and give generously wherever you can. That way, we can create a rising tide that lifts us all, and not just a few.

Charlie continues on the theme of you, as the idea-killer too. ‘What kills a good idea? Lack of passion and momentum’, he states without hesitation. ‘Your idea needs to keep being the most important thing on your ever-growing list of priorities.’

Another fatal error that I’ve personally seen pull a great early business apart (and even damage some much more established ones), is resting on your laurels. Just because your idea starts selling and all the buzz is about you today, doesn’t mean that it will endure without you continuing to keep that demand alive. Don’t start believing your own hype.  Keep listening and improving, keep looking for what will keep you front of mind and continue customer loyalty.

Being a great business for your customers is a cyclical and continuous commitment, not a linear and finite one.

‘Your idea needs to keep being the most important thing on your ever-growing list of priorities.’

Charlie Cadbury, Co-founder, Dazzle Technology

Q5: How hard is it to make a good idea into a business?

At times, it’s going to be really hard – and that’s normal!

‘SO hard!’ Leah exclaims immediately in response to this question. ‘Ideas are easy by comparison, execution is hard!’

Charlie shared Leah’s reaction: ‘It’s really very hard. Be prepared for the fact that it probably will not work the way you think it will. Be happy to change radically – no battle plan survives contact with the enemy. My personal advice would be to spend less time planning and more time doing.’

‘I’m still learning this!’ laughs Shaun. ‘My experience so far is that it’s very hard!’

‘Yes, it’s hard’, says Hannah, ‘and it can be easy too’, she adds. ‘If you have a great idea and follow good practice, you can turn it into a business quite easily. However, nurturing that business over time, and weathering the inevitable ups and downs of entrepreneurship can be tough. You need bags of agility and resilience.’

Make it easier on yourself by road-testing your business constantly, at all stages of its fruition. According to David, that means road-testing your idea even before you go anywhere near writing your first business plan. That’s good practice.

A plan is only as good as the quality of the data you put into it.

It’s easier with the right people around you. Don’t be afraid to reach out to them

‘As a novice, there are times when I find it extremely hard’, Paul confesses. ‘I’ve gone through a lot of my savings to get even as far as I am.  I’ve made mistakes about what tasks are essential and what are not and I’ve had to learn very quickly how to set priorities.’

What’s helped Paul overcome the hard times and moments of self-doubt?

‘Involving other people with the right skill set as quickly as possible helps immensely’, he told me. ‘I received a lot of support from MENTA and met my business coach, Gary Parker there.’

Chris made a similar recommendation about the power of those within your network to make a real difference to how hard you find the journey to success.

‘Everyone will have good ideas for businesses in their lifetime, but so many factors can get in the way’, he observed. ‘Primarily, you have to have a desire and a passion to do what you want to do. You also need a support network.’

You have to be a doer not a thinker

How hard you find it is ‘all down to the person running the ship and their mindset, ultimately’, Sian asserts, with her usual pragmatism and thoughtfulness. ‘You have to be a doer not a thinker.’

Laura believes it’s all in the mindset of the founder too.

‘As long as the person moving an idea into business is aware of the challenges ahead and he/she has the resilience to continue and the willingness to learn from setbacks, success will come’, she says.  ‘Any idea backed by the right founder, who’s using the right business model, can become a success. But it’s essential to study how the competition is generating their income and ensuring that you can add innovation to any idea that comes close to what they’re already doing.’

You don’t need to be a technical expert, but you must know your market

Leah made a comment while I was pulling this together that really resonated with me. She reminded me that when she started Appointedd, she had no qualifications or experience whatsoever in running a software company. But she found out how to do it, in order to bring that idea to life.

It’s hard, but it’s not at all impossible to build a business where as a founder, you don’t possess all the skills necessary to bring that concept to fruition. This is something that I can also relate to well. (My husband still finds it hilarious that I am launching a tech business and still have to be rescued when it comes to working out the upload of more data on my roving Wi-Fi equipment!)

What you do need to know is your market, your customer and the demand for what you’re proposing. As long as you have those straight, you can always find good people to help create the bits that you can’t do for yourself.

Don’t expect overnight success with your idea, or with revenue-generation

Many of my contributors echoed Hannah’s experience that ideas will evolve over time and that’s a good thing. It can take time to create a really great one.

But you don’t have to wait for evolution – in fact, it probably won’t happen naturally – before you first launch. Start with a minimum viable proposition, just as all the great lean startup advice recommends, and then get refining in response to what you learn from your customers. They’re often the best product consultants you can hope to have.

Ash picked up on this theme as well.

‘Make sure there is something about your idea that you can sell’, he advises, from experience.  ‘YENA was always a great idea, but it took a long time to become a great business. Hindsight is a wonderful thing and YENA could have been a business 3 years earlier. Happily, the learnings from those early years and the time we took to build up a loyal network who wanted to buy things from us, stood us in good stead. First we sold memberships, then event tickets, then sponsorships, then consulting, co-working spaces, and now a lot more. Now we’re a sustainable, revenue-generating business with a brand, not just a brand and a ‘chunky hobby’, as I used to call it!’

‘There’s a huge amount of work along the way’, Tom points out. ‘There are good days, bad days and days in-between. There’s no point being fickle about things, you really need to commit and to keep working on the vision.

‘If things really aren’t going to plan, there is always the option to pivot, but you should never pivot for the sake of pivoting. Perhaps most importantly, you’ve just got to take the risk and jump headfirst into it. If you don’t believe in your idea enough to do that, then there’s almost no chance anyone else will.’

You have to be prepared to take the risk

Taking the risk was something that resonated with Chris as well. It’s the final determining factor after all.

‘You have to take the risk’, he agrees.

So…

…what should you do if you have a good idea?

Well, definitely protect it, test it, start building out what it looks like and how it would work – you’re essentially trying it on for size.

And if it really looks good after that, then build it: make it happen.

Don’t stop brainstorming and having conversations, never build in isolation, you’re only limiting your potential.

Keep your eyes and ears wide open, listen more, speak less and make the time to be undistracted.

Look for the friction points, the gaps in service, and the experiences that just aren’t as great as they could be – you come across them every day as a consumer.

Take inspiration from others in different industries and sectors. Consider how their new approaches, technology and ideas might be applied to your ideas and/or business practices.

Never limit yourself by benchmarking yourself only against your competition (or the nearest thing to it) when it comes to finding new ideas. That’s a path that too often leads to indistinctive imitation, limitation and wasted potential. That’s not to say you should ignore your competition. Quite the opposite. But do aspire to be something differentiated, that is above and beyond them.

Don’t be afraid to ask for help. Support each other. Together, we can often reach places that alone we might never have gained.

And finally, celebrate every step of the journey, however small. Bringing a great idea to fruition is generally harder than it sounds, but as my network of starter-uppers and successful business founders tell me – and as I am discovering for myself – ‘the juice is definitely worth the squeeze’!

‘Find the mental strength to overcome what scares you.

And reach out when you need help. Supporting each other is one of the most empowering and game-changing things we can do.’

Merlie Calvert, Founder, Farillio

More great sources of inspiration

If you want to test your own ideas or hear more great stories, this is one of my favourite TedTalk playlists. It’s a truly inspiring, curated mix of views from 9 highly compelling experts, all discussing a variation on the theme of where ideas come from and how you weave the magic of making them real.

There’s a link here as well to a well-curated goodreads.com grouping of some of the especially memorable quotes from Steve Johnson, author of the very enjoyable read: ‘Where good ideas come from: the natural history of innovation’. With summer approaching, it’s a great one to order for the holidays.

Enjoy.

And believe in yourself and your ideas. Everything great first started out as someone’s idea…

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2 thoughts on “Turning ideas into great businesses – inspiring learnings shared by those who’ve done it (Part 3)

  1. Very informative article Merlie. Just one thing – I would have liked to have known who exactly you had interviewed at the beginning. I noticed that there were occasional references to them throughout the piece but I had to keep scrolling through to try and find out. Otherwise, a very valuable post.
    Best wishes
    Anita Dow

    Like

    1. Thanks, Anita. Great to hear that you enjoyed the post. It’s a good point you raise. I started out with intros at the start and then I found that by the time I had written intros on everyone up-front, the doc felt even longer and quite clunky, so I took them out. I guess it’s the challenge when you interview more than one or two folks for a piece!
      Have a great day and again, thanks for the feedback.
      Warmest wishes.
      Merlie

      Like

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