Assessing the Feasibility of Your Venture
Everybody has interesting business ideas. However, the cool idea which was seemingly successful as a concept often does not thrive as expected. In order for a concept to turn into a business, entrepreneurs must assess whether idea is feasible or not. Faculty director of the Butler Venture Accelerator program Andrew Corbett hosted a feasibility workshop on March 10 to help entrepreneurs who are assessing the feasibility of their venture.
According to Corbett, creating and developing a new business venture is process of mitigating product/technology risk, market risk, and execution risk. An idea is feasible and worthy of pursuing if an entrepreneur has mitigated the three risks.
Product/technology risk asks an entrepreneur one of simplest questions: does your product/technology work? If it does, what it can do for customers? Many entrepreneurs argue that creating a blueprint has proved that their idea can mitigate the risk. However, this step is not sufficient to analyze product/technology risk. Product development goes through the phases of prototype, product, alpha, beta, release, and scale for manufacturing. Questions that you can ask yourself to mitigate product/technology risk are what are the key activities that need to be happen, what key resources are needed, and who are the key partners.
Once an entrepreneur confirms that he or she mitigated product/technology risk, market risk should be considered next. Market risk assesses whether there is customer who would buy your product and if there is, is the market big enough to sustain a venture. Criteria to help mitigating market risk include customer value propositions, customer relationships, channel, and customer segments. If market risk is not handled, the product/technology will remain not sell because there is no demand.
The last risk that has to be alleviated is execution risk. Now that you have your product/technology ready and know there are enough people who will make the purchase, you have to make sure you and your management team has experience and capability to execute. It is critical to assess ability of actually making it happen.
“While going through feasibility, make sure you know who your customer is and find value for them,” says Professor Corbett. The process of business planning and developing a new venture is an iterative learning progression achieved only by taking action. You assess feasibility of your venture by confirming from assumptions to facts. The next time you have a mind-blowing idea that you want to make into a business, answer the simple questions around risk to figure out if your concept is feasible and worth pursuing.