Entrepreneurs are natural dreamers. They see a problem and they dream up a solution. But sometimes those dreams pop when adversity hits and reality takes hold.
Barriers crop up and funding doesn’t come through. That kickstarter campaign you worked so diligently on failed. You realize the dream was just that, a dream.
How then do you suss out the feasible dreams from the pipedreams? Each idea is rooted in some problem you’ve already observed. You believe each is a solution. Yet some fail and some succeed.
That’s ok. We’ve got your back. Here are a few ways to weed out the duds.
1. Is The Industry Heavily Regulated?
Maybe you want to get into growing cannabis. This is a great business idea if you’re prepared to jump through a billion hoops.
Regulation helps consumers know they’re getting a standard product that’s safe for them. It also helps employees know they’re safe or they’re getting a fair wage through their employer’s payroll service. But there is such a thing as over-regulation.
If you’re business idea is in an over-regulated sector like the healthcare sector, you might want to find something else. That is, unless you have a load of funding for legal and governmental matters.
2. Anyone Else Have the Same Idea?
Your business idea doesn’t have to be entirely unique. In fact, if it’s something someone else did, you can easily gauge whether it will be successful.
You want to operate somewhere in between chock-full of competitors and sparse as a desert. This way you have someone to compare your business idea against, but you won’t have to struggle against the billions of other sperm in the semen swimming toward the one egg.
Really, if nobody else is doing it, you’ve got a long road ahead of you. Why? Because it’s your product that’s convincing everyone a new niche is necessary. If nobody’s done it before, it’s because nobody thought it necessary until you. And that includes your potential customers and clients.
This is likely why the Pebble failed as a consumer product and yet eventually gained partnerships in other products. They were the announcement product. Pebble paved the way for smartwatches and uber-efficient sports watches. But nobody is wearing an actual Pebble watch today.
3. What Are the Costs?
You might have a revolutionary idea. Maybe it’s the quantum computer of the digital age.
The quantum computer required Google’s funding and risk-tolerance to become a reality. It’s not something a young Steve Jobs could create in his garage. It’s way more complicated and expensive than coding an operating system.
Unless you are Elon Musk sitting on billions, you want to avoid those expensive ideas that require moon-rockets to realize.
But I’m not looking at taking on the moon, you say. Great! That was hyperbole. I’m talking even medium-sized ideas with large capital funding problems and high risk. These are the business ideas you should avoid.
Even if they’re expensive, make sure the risk is low. That’s how you’re going to find investors. You CAN find funding for expensive and elaborate business ideas if the investors see a high likelihood of success.