So Many Business Ideas, Not Enough Time? Co-founder of SkyMall Inc. and Worthworm Alan Lobock provides insight into narrowing down business ideas and execution.
By Alan Lobock
Q: I am at Penn State and have a lot of different business ideas but don't know how to choose one. How would advise I narrow down my selection? Also, can you provide me with guidance on the first step I need to take in order to get things off and running?
- Mason Marion
University Park, Pa.
A: While business ideas come and go -- or in your case, just keep coming -- the hardest part is often narrowing them down. Here's how I suggest refining your options:
- Consider your objectives. What do you want from your startup? Are you looking to disrupt an industry or build off an existing idea? Select an idea that matches well with what you want for your life now and in the near future, because you are going to be devoting a great deal of your time to its development.
- Identify your path. If you are on the disruption path, your concept will likely need to attract angel investment and venture capital. Lean toward those ideas that address large and growing markets that are supported by outside investors.
- Focus on your strongest idea. Decide which of your ideas are the most innovative and would provide your company with sustainable competitive advantages. Give a higher priority to ideas that scale easily and for which you can attract a strong management team with relevant, startup experience. Then, pick the idea that you can get to market most quickly and efficiently.
The above business selection strategy is mostly used for concepts on a high-speed trajectory that can gain investment and exit quickly. If, on the other hand, you are looking to build upon a good idea where funding isn't a necessity to get your business off the ground, your approach may be slightly different. Here's what I mean:
Related: The Creator of Funny or Die's "Drunk History' on Wacky Business Ideas That Work
- Can you fund it? Give high priority to the ideas for which you can muster up the funds. You'll need to be confident that you can sufficiently capitalize on using investment only from friends and family. Also, ensure it offers target consumers a compelling value proposition that distinguishes your product or service from its competition.
- Can you gain from it? Prioritize concepts that will provide a reasonable financial reward but don't require you to obtain an unlikely level of market share. In other words, look for an idea where you won't need to corner the market to put food on the table. Given the limited amount of outside funding you'll have, fast growth may not happen. So being able to subsist from the outset -- without huge capital outlays -- is key.
The factors aren't all that different between the two scenarios. The greatest distinction is the former, you will be answering to a group of outside investors. These people aim to make a large return as quickly as possible, and with that comes pressure.
In the second scenario friends and family are generally more forgiving as to the amount of time it takes to get to market, scale and generate profits and cash flow than angel investors or VCs.
Related: 3 Ways to Find Your Next Brilliant Product Idea
After you have selected your idea, it's time to assemble a qualified group of co-founders and/or employees. Once formed, develop your business plan and begin its implementation.
Keep in mind, ideas are a dime a dozen -- it's in the execution that successful companies are born and entrepreneurs are made. Control aspects of your business that are within your control, influence in your favor the elements that aren't in your control but are subject to your clout. And don't fret on a daily basis about issues that are beyond both your control and influence. Also, enjoy the challenges that will come your way. They are, in some measure, what will define you as an entrepreneur.
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