3 Ways to Demystify Business Ideas

Jay Abrams Business Ideas Quote

(This post is the third in a series covering the eight stages of solopreneurship.)  

Note: This turned into a very long post!  I will separate recognizing a business idea and searching for one into two separate posts. 

In my last post, I talked about the challenges of finding a source of long-term motivation and the needed know-how to get off the fence and start searching for a business idea.  The next challenge is understanding what a business idea represents and how to search for one.  

The Idea Stage

The idea stage begins with the search for or discovery of a business idea and ends when the solopreneur screens (evaluates) the business idea.  The idea search and identification processes for solopreneurs are much simpler than for entrepreneurs. Solopreneurs typically do not have formal educations in business and do not use many business concepts to guide their activities.  As a result, their activities are simpler and the decision to start a business faster than for MBA trained entrepreneurs. 

Stage Objective

The objective of this step is to discover a valuable business idea. 

Stage Entry and Exit Points

The idea stage begins when an aspiring solopreneur searches for a business idea and ends when he or she identifies a potentially viable business idea that merits further exploration. 

Challenges Encountered In The Idea Stage

 Business ideas are a mystery to solopreneurs.  Often, a business idea is an idea for a product or service that they possess the skills to produce.  The notion of a customer is vague of non-existent. 

 Focusing preparations on the creation of a new product or service without much consideration for the customer is a sure recipe for business failure.  On the other hand, focusing on finding a product or service that fits the customer and solopreneur increases the odds of business success significantly.    

In my experience  working with solopreneurs in the idea stage, three challenges are frequently encountered: 

  1. Making business ideas visible
  2. Understanding the customers perspective
  3. Finding and using a method to search for business ideas. 

 Overcoming each of these difficulties can help demystify the fit between solopreneur and customer, building a solid foundation for a business. 

Making Business Ideas Visible

 Do you recall how Winnie-the-Pooh was always hunting the mysterious Heffalump?  No one saw the Heffalump in the Hundred Acre Wood and those that said they did never described the same thing. The inconsistent descriptions made Pooh’s search for the Heffalump nearly impossible for he never had a good idea of what he was looking for (that rarely stopped him, though). 

 Searching for business ideas is a similar challenge. Part of the problem finding business ideas is that we are not entirely sure what one looks like. 

 Try this experiment: take a minute and Google the term “business idea”.  Look through your search results and see if you can find a search a single search result that explains what a business idea represents.  Did you find one? Most likely you did not. 

 How can someone looking for a business idea expect to find one if they have no concept of what they are seeking? 

  Thus, the first step in demystifying business ideas is to find a way to represent business ideas so that we can recognize them

Business Ideas as Exchanges of Value

 One method I use to address this challenge is to help a solopreneurs understand the foundation of a business: a transaction between a buyer and a seller.  This trade is based on the value of what is produced by the business and consumed by the customer.  This transaction is called a value exchange

For our purposes here, a business idea is a mental representation, held by an aspiring solopreneur, of a potential exchange of value between a potential business and a customer. 

An example can shed some light on how the potential for an exchange of value might be discovered  Take a moment and read the history of Strapworks, a local custom strap manufacturing company located here in Eugene, Oregon. Pay close attention to the second paragraph. 

 Did you read it? 

  Assuming you did, there are several takeaways from this story:

  1. Everyone was throwing their black straps into a pile on the dock, making it hard to find any particular strap. 
  2. Finding the strap was frustrating, people argued over which strap was theirs. 
  3. The aspiring entrepreneur made a new strap that added color and allowed him to identify his straps. 
  4. Other boaters found the colorful straps more useful than their black straps and wanted to buy them. 

 The colored strap led to a new way of using them that was better than the old way.  After the events had unfolded, the owner of Strapworks perceived that his colored straps represented a potential business idea. 

 Understanding Value Exchanges

 The Strapworks example gives us several of the essential elements needed for a business idea. To better understand a value exchange, a solopreneur needs to know how they can add value to the customer and receive value back.  When the entrepreneur in our example created the colored straps, he figured out how he could personally add value to his fellow boaters.  

To discover an exchange of value, we need to know the following:

  1. The entrepreneur knows how to make the product.
  2. The entrepreneur is passionate enough to build a business based on the product. 
  3. The entrepreneur knows how the customer will use the product. 
  4. The entrepreneur knows how the customer thinks and feels about using the product.
  5. The entrepreneur knows that value can be received from the transaction. 

To help train clients to build mental models of business ideas, I created a simple worksheet that helps them to explore these relationships. The tool has four basic elements, two focused on the solopreneur and two on the potential customer. I tackle the question of receiving value back (#5) in the evaluation of the business idea. The four essential things a solopreneur must understand are: 

  1. They have a method to make the product/service.
  2. They are passionate about the product/service. 
  3. They understand how the customer uses it. 
  4. They know how the customer thinks and feels about it. 

  In this way, the aspiring solopreneur can begin to represent how the value exchange works and why.  The understanding becomes the basis for further evaluation of the business idea. 

Understanding The Customers Perspective

 When solopreneurs begin to explore a potential value exchange, they have no problem describing how to make something or their passion for it.  Trying to explain how a potential customer might use a product or service and how they think and feel about it is way more challenging.  These answers come from understanding the customer’s point of view. This requires solopreneurs to step temporarily outside their mindset and into the customers. 

 One of the best ways to understand a customer’s perspective is to become one for awhile. Walking in the customer’s shoes for a period fo time gives a solopreneur a chance to experience the using the product or service first hand. 

 I often give my clients several exercises to help them to do this.  The goal of the exercises is to see patterns in customer behaviors and be able to describe them.  I’ll begin by asking them to take several household items that they have purchased and write down how they use it and what they think and feel about it. They are consumers of these products and have the necessary knowledge to answer these questions.  

 Here is an example.  Just to the left of my keyboard is a bottle I purchased a year or so ago.  It is dark gray in color and somewhat transparent. It has the company’s logo on one side and graphic stating it is “BPA free”.  None of these features are why I bought this particular water bottle, however. 

 On the other side of the bottle are measurements in liters and ounces. Near the top of the bottle is the last hash mark which reads 1000 mL.  I was looking to increase my energy and read somewhere that the average man needs 3000 mL of water per day.  That sounded like an enormous amount of water at the time, but I decided to experiment with my water intake to see if I noticed a difference. 

 I started filling the water bottle daily striving for 3000 mL of water per day.  It was tough at first, none of the drinking glasses I owned made it easy to measure how much water I was consuming.  I finally bought this bottle to help me with this task.  After about 2000 mL of water each day, I started to notice that my mind was clear, and I had energy throughout the day. I was convinced!

 Now I strive to drink 3000 mL of water each day, and this water bottle makes this task easy.  I fill it up once in the morning, once in the afternoon and once in the evening. It doesn’t require a lot of time or thought on my part to do this task. 

 Measuring my water intake every day is how I use the bottle.  My mind being clear and feeling energetic through the day are the benefits I receive from it. Think about the products and services you use every day. How do you use them?  Why do you use them?  Gaining insights into your purchasing behaviors can help you to demystify the customer’s point of view.

The Fit Between Solopreneur, Product and Market

 These exercises can help solopreneurs to identify the producer and customer side of the value exchange so they can recognize them. The primary goal of the worksheet is to define a potential business idea that they best understand both the producer and customer points of view. If the solopreneur clearly understands the value exchange from both perspectives, they have an idea that is worthy of exploring further

Searching For Business Ideas

 As solopreneurs explore their potential business ideas, they often discover that they do not work as expected and abandon the idea.  In my view, this is a good outcome.  A solopreneur that does not know why they are in business or why the customer buys from them will not be in business for long. They now know what a business idea might look like and will often begin searching for another. 

 When a solopreneur abandons one idea and wants to find another, they will start to search for new ideas. This brings us to our next challenge which I will cover in the next post. 

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