How do you know your business idea is feasible?
The following post is from Fifi Shi ’18, a Butler Venture Accelerator team member.
“How do you know your business idea is feasible?”
Professor Andrew Corbett, faculty director of the Butler Venture Accelerator program, asked this opening question in the feasibility workshop he hosted on October 6.
Everyone has interesting business ideas nowadays. However, those fantastic ideas have high probabilities of not turning to be successful businesses as they were expecting at the beginning of innovation. During the workshop, Professor Corbett gave entrepreneurs few tips of how to examine the feasibility of their ventures, especially on market and product development segment.
According to Professor Corbett, in order to developing a successful business venture, entrepreneurs need to have a clear version of the benefits of that they can articulate from product or service for their customers. The first step is to identify the “all benefits” someone can get from your offerings, such as main reasons, big reasons, minor reasons etc. This will answer the question of “why should customers purchase your offering?” After this, you need to find out what are the “differentiated benefits” you can offer, which means that you need to know why customers should buy your offerings instead of your competitors. Lastly, you need to decide what is the most compelling and worthwhile “focus benefit” you want your customers to take away and why. Walking through these three steps, you will then acknowledge the superior value of your offering you want to deliver to your customers, compared with the next best alternative.
In order to figure out the focus benefit, entrepreneurs need to do some customer value research. Traditional marketing research approaches, such as searching online or getting secondary external resources, are no longer helpful. What entrepreneurs should do is to “talk to the people you don’t know”. When talking to others, you will then know what your target customers really want, and you may find out new markets that you do not plan to reach out originally.
“You need to know who is your target customer, what is your core value and how you are going to generate revenue”, said Professor Corbett, “when you get to the point of the intersection of these three segment, your venture can be defined as feasible.”
Next time when you think of an entrepreneurial idea idea that you want to turn into a real business, try to answer the questions around benefits and talk to people. This will help you figure out if your idea is feasible and worth pursuing.