Hey look, I’ve been there.
An amazing idea pops into your head, and all you want to do is hit the ground and run. It’s fun and productive with low-risk pursuits.
But in business it gets awfully dangerous awfully fast.
I think of this whenever I watch shows like Shark Tank or Dragons’ Den.
Wide-eyed people pitching their ideas – and they’ve got it all happening: the fancy logos…professional materials…all the branding bits and bobs…their product prototype manufactured at the ready.
With cavalier disregard for vulgarity, the Dragons’ sit stroking huge piles of cash; as if to say, “Justify yourself to me, pathetic entrepreneurial mortal.”
“How much have you invested in this?” they always ask.
“Millions,” the entrepreneur replies. “I’ve sold my house, my children. I have six different shylocks pounding on my front door threatening to break my legs. I got here by escaping through the bathroom window.”
“How many units have you sold?”
…And that’s when their pitch gets burned
It’s probably happened, but I can’t remember ever seeing a successful pitch without strong sales figures included.
Even then, failure happens.
The Dragons/Sharks are made to look like swashbuckling, intrepid, devil-may-care investors. But watch enough of these pitches and you spot a pattern: they rarely invest unless it’s a virtual no-brainer.
I saw one man pitch an idea which already had customers lining up to buy.
“I just need the money to switch this thing on,” he said.
I felt bad for him. He got his money. But it cost him 40% of his business.
So if you’re starting a new idea, you must give yourself the same hard time. Make sure it’s a virtual no-brainer before you double down.
Perry Marshall has a good solution to this problem
Rather than jump head-first into your big, flashing-light production, you should come up with a cheaper way to address the same problem.
His example was something like this:
Suppose you have an idea for a mobile app that can make car engines more efficient.
DON’T dive straight into getting developers, graphic designers, marketing agencies etc…
…Instead, create a short PDF which shows people DIY ways to make their engine more efficient.
Sell this for a buck.
The amazing thing about getting people to pay is the price matters less than you think. If you can sell your cheap DIY solution, you know you’ve hit a problem people are willing to put money behind.
You’ve taken a big step in validating your idea.
However, if you can’t sell it’s a sign you could be heading in the wrong direction.
Maybe there aren’t enough people who care. Or maybe it’s your marketing. Keep tweaking it until they buy. Or screw it up and try something else.
At least you won’t have lost everything on another amazing “idea.”
The big problem with ideas is they’re a dime a dozen.
That’s what makes them so deadly.