Temper and test your enthusiasm with these questions.
I recently met with a successful business owner who told me about a new service he was developing. “Here it is,” he said, proudly displaying its website on his phone. “That’s the new company.”
“How far along are you?” I asked.
He smiled a little sheepishly. “I’ve launched, and I think it’s a great service, despite the fact that my target audience isn’t convinced they need it, and I have no financing, no revenue model and no business plan.”
He’s not the first experienced business owner to admit to optimism without a plan. A new business idea sparks an enthusiasm that transports even seasoned businesspeople back to a rookie’s mind-set.
Whether you’re launching your first company or your 50th product, keep your enthusiasm focused with these five rookie questions.
What business are you in?
Describe the products, services or software that your business will offer. Focus on making it easy for potential customers to understand the value. One of the most effective answers to this question that I’ve ever heard came from an owner who described his company as “where farm equipment meets Big Data.”
How are you different?
Whether you acknowledge them or not, there are probably competitors to your new product or service. Potential buyers will compare your offerings to those other products and services. Identify one or two points of difference that add value for your target customer.
Can you describe a use case?
Clarify how your product, service or software works, and how a user or customer interacts with it. Focus on creating a simple and enjoyable customer experience, and then test your assumptions with target customers. If you have to convince potential customers that your product or service is simple to use, it probably isn’t – at least not yet.
How are you going to make money?
A product or service that doesn’t generate revenue isn’t a business. It’s an idea. Spend quality thought time on revenue generation – who will pay, how much they will pay and why they would pay.
How will you generate customers, site traffic or content?
This is a companion question to how will you make money. Develop a clear vision of your target users, customers or advertisers. What are their characteristics, demographics, behaviors and values? How will your product, service or software meet a need or solve an issue for them? Why will they change their current behaviors to buy from you? There’s only one way to find out: Ask them. Test your product or service with target customers. Listen to their feedback, and make adjustments.
Asking yourself these five rookie questions not only keeps your enthusiasm focused. The answers can also lead you in productive directions you might never have considered. Remember, Bubble Wrap revolutionized the packaging industry, but only after its initial, unsuccessful launch as wallpaper