We get ideas when we’re inspired, when we see things functioning around us. The most primitive, yet most effective business ideas involve improving an existing competitor’s product or service. Because then you don’t need to worry if it’ll work. It’s already working. In such cases you only rely on your ability to create a better, more advanced product or service and then perhaps the finance and expertise to market and distribute it, not chance.
But when you’re struck by that one innovative, out of the world yet simple, never tried before idea, you need to answer a few questions to find out whether it’s really sustainable, executable and profitable.
1. Is there a need in the market or is there a void? There being a demand in the market is one thing, but there being a complete void in the market is another. The greatest businesses are based on voids. A void that your product will fill. Something people always wanted, whether consciously or sub-consciously but it never existed. Good ideas make use of market demand, but best ideas make use of market voids. This means your customers might not always know that they need your service until they know about it. This obviously has higher marketing costs because your audience needs to be educated about your unique product and the demand has to be created from nothing.
a. PeopleForever.org – We’ve conceptualised this website to fill a similar void. An emotional outlet that’s so desperately required. People pay their condolences on someone’s demise on newspapers’ comments sections. The rest who feel the need to express, don’t let it out at all. Where should they? PeopleForever.org aims to fill the void here. When you feel like letting your heart out, letting the world know how you felt about Ishmeet Singh (deceased Indian singer), where do you go? You come to PeopleForever, write about Ishmeet, pay condolences to his family, get encyclopedic information about his life and get in touch with people like you who loved him.
2. Do you have the finance to develop your product or service to marketable standards? Without a great product/service and a good budget to develop and market it, you’ll only expose your great idea, probably to be picked up by your competitors, who might be able to develop and market it better than you. Wait till you get the finance, leave no stones unturned to develop it to the highest standards and once that is done, make sure your clientèle knows where to find your product or service.
3. Does your idea have the ability to generate cash? A lot of it? What is your revenue model? You might have a great idea for people interested in “squid recipes”. It might be something that most people interested in squid recipes will want to buy. But will that ever make you enough money to sustain the production costs, salaries etc? Maybe not. However, an innovative idea that applies to millions of Italian food lovers, might be financially more viable.
When talking about online businesses, it’s very important that the revenue model is decided and very carefully gauged. If you have a web site, you’ll either sell a product or advertising space on it, or a service via it. Your revenue generation will depend on your product/service’s price competitiveness, profit margin, ability to convert onlookers into customers, your web site’s easy navigation and design.
If your revenue model is advertising only, then you will need to generate a lot of traffic to break even. Will your site ever be able to generate enough traffic to pay back the development costs, marketing and ongoing salaries? It should be calculated before-hand how many visitors will the site attract in the best case scenario; what’ll make them come back? what does it mean financially. Is it all worth investing so much time, money and effort?
Note: An online business idea with advertising as the only revenue model requires much greater conviction and innovation compared to e-commerce based sites. In the latter’s case, if you have a good margin to be made off your sales, then you can afford expensive pay per click advertising campaigns and work to improve your conversion rates, whereas an advertising revenue dependent site has to cover that in terms of bringing out a compelling innovative idea and generating user stickiness.
Make sure you’ve done your market research and again, have the money to market the idea to generate the quantity of sales you’re looking for to make profit. There’s nothing worse than investing months in developing a website based on “what you think is” a innovative idea and finding out that a top-class web site exists, doing exactly what you want to. Market research is imperative.
Once you know you’ve discovered a treasure chest (great idea), make sure you don’t let it pass lightly. Make the most of it, explore every venue and give it your 100%.
Have I missed something? Feel free to comment.