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WHAT’S THE BIG IDEA? ! You absolutely must have a great idea before you can start a

company. Of course, you say. Got that.

But wait a minute. How do you know it’s really superior? And does

anyone other than you think it’s the greatest gift to humankind?

You have to validate the idea.

GAUGING AN IDEA How do entrepreneurs know their idea is a big-time winner? First,

it’s important to remember that you won’t always know in advance.

You just have to get out there and try things. That said, there are

some things that are worth trying more than others. Let’s talk about

how to tell a good idea from a dud.

Knowing whether you’ve got a good idea is an iterative process, and

can sometimes take time. There’s a bit of a chicken-and-egg

problem. To really know whether you have a winning idea you’ve

got to invest time and resources, do your homework, and get some

early customer engagement.

But how do you know whether your idea is good enough to warrant

investing those resources? In many cases, you’ll never know. You’ll

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have to dive in, assemble a great team, and be responsive to changes

in the marketplace.

Even so, you should move forward with a solid sense that you’ve

got enough of a big idea. Let’s start with a few simple questions to

help you know when you’ve got something big on your hands. These

form the basis of much of the work we’ll do in later lectures, when

we explore these topics in more depth.

Before you know whether it’s worth the effort to do all that

exploration, however, start with these four strategies:

1. Know your history;

2. Know your customer;

3. Know your competitors; and

4. Know the state of the art.

Know your history. You’re proposing a new product or service

because you believe the world can be better, and that customers will

be happier or more productive with your offering. How did the

world get to this point? As an example, maybe you’re thinking of

building a new travel-search website that helps people find low

airline fares. How did the airline industry get to the point it is at

today? How do companies sell tickets and consumers get

information about flights now?

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A sequence of events has unfolded over time, numerous

stakeholders have played a role in the value chain, organizations

have become stuck in their ways, customers have come to expect a

certain type of behavior, and so on. How have all of these pieces

come together and pointed toward a new way of doing business that

people will value? Once you understand how the world got where it

is today, you’ll be in a much better position to tell whether your “big

idea” is consistent with the arc of where the industry or market is

going.

Know your customer. We discuss this topic in depth in the next

lecture about market analysis. But as a simple exercise: Tell a story

about a day in the life of one human being who is going to be

happier as a result of your new big idea. Learn all about this person

and how she makes decisions.

Don’t just say a product will be popular. Tell people exactly how

someone’s life will change as a result of your product. If it’s a truly

compelling big idea, you’ll be able to answer this question in a

simple way.

Know your competitors. If you’ve got a big idea, how come nobody

else is doing it? Surely there are other smart people out there who

have thought of this idea or something similar before. Lock onto a

unique angle, or new resources you’ll bring to bear on the solution.

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It may even be a matter of timing. Maybe the market wasn’t ready

when others tried to introduce the product previously. That’s OK.

Plenty of start-ups have succeeded with a later launch, but be

prepared to explain why you’re the one who is now in a position to

win.

Know the state of the art. If you’re proposing a new way to build

or do something, understand the ingredients necessary for your

innovation. It might be a big idea to produce an electric car that

goes 500 miles without a charge. But is this something you can

feasibly build? What elements will you rely on to build your vision,

and are they within reach?

Another important guiding principle for a young company is to

focus and keep it simple. Don’t try to design a product that does

everything for everybody. Find the minimal amount of special value

you can deliver, focus first on nailing that, and then go from there.

WHO CARES? Once you’ve tested an idea, a useful follow-up question is, “Who

cares, and why?”

This seemingly flip question actually has two insight-packed

meanings. On the customer side of your venture: Who might care

about what you’re developing? On the business side of your

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venture: Who is fundamentally committed to working with you to

keep your idea moving forward?

There will be lots of twists and turns along the way, and you will

frequently have more than one grand idea. Develop a collection of

stakeholders who will guide you through the adaptations and

adjustments you’ll doubtless make to fine-tune a rough idea.

As the leader of a new business venture, you must possess the

ability to sense when changes are needed, and to gradually keep

taking new steps forward.

Charles Darwin said that it is not the strongest of the species that

survives, nor the most intelligent. It is the one that is the most

adaptable to change.

To launch a new business right, know how to read your customers’

responses, and how to quickly alter your vision to match the

feedback you’re getting. Sense and respond should become your new

mantra in a world of constant change.

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