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How do you rate your ideas?
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17-04-2014 10:13pm#1
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lucky john wrote: »I think few people would have an offical way to evaluate ideas. I suppose it's different with digital as, assuming you're capable, all you need is the idea and a computer to get a minimum viable product off the ground. Its relatively low cost.
If it's a product you come up with then the evaluation process has many more boxes to tick. In most cases it a matter of crossing each bridge as you come to them. If you were to try to tick all at the beginning no idea would ever get past that stage.
Just as a matter of interest. If you x the 3rd check do you move on or try to fix what's wrong. I think your process may be flawed if you do just move on and I think you may never find what you're looking for. There's not many unique ideas left but there's so many niche ideas that can be exploited. Eg. So dog photo sharing sites are not new. Creat a hook. Maybe a dog dating web sit. Owners/breaders find a local, but acceptable mate to produce quality pups, nice cross pups, ect. So I would suggest at least one more box. Can I fix it.
Yes it is probably a very simplified version of what I actually do
Totally agree, generally I would try to take it a step further and see what kind of angles there might be. As you say, there are few unique ideas left but there is always room for a niche idea if it is the right kind of idea at the right time, etc.
I have been thinking lately that there other elements that are crucial to the selection process too. For example, with online ideas it is always difficult to get people to contribute content if the idea is centred around user-generated content (UGC). You have the chicken and egg scenario, and then you have to monitor and moderate content as the service hopefully grows. I guess that's a nice problem to have though.0 -
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I agree with you there El Rifle. What I said is very over simplified and coming from a particular perspective. Perhaps "Your idea implemented correctly might be worth a fortune" would be more accurate, but then that's not poetic enough for me
Speaking from the development angle, it is all too frequent that "ideas" people approach "technical" people with a proposition something along the lines of "I have a great idea, you do all the work and I'll give you a fractional percentage of the business". That's what my previous post is most influenced by.
As a technical entrepreneur/software/web developer, and more recently as a business mentor, I get to see a lot of business ideas. Many, even most of them have merit if approached from the right angle (i.e. be prepared to pivot). Only some ideas will ever be potential industry- or world-changers, but I've come across one or two of them: one recent idea I saw had the potential to make in the €100Ms or more if deployed worldwide, and would cause the death of an entire class of job in a particular industry. Most won't make much of a ripple, even if implemented effectively.
Regarding judging ideas, one of the most useful things I ever did from a business perspective was take part in a mastermind group - a small group of like-minded business owners, we all had signed NDAs and non-competes* with each other, and did warts-and-all analysis of our businesses, discussing problems, goals, sales figures, everything. Incredibly valuable and I highly recommend something like that to anyone who has the opportunity (or desire to set one up). Solo business owners will find it most useful if you don't have a trusted advisor to bounce ideas off. * we had some interesting clauses in the non-compete so as to make joint ventures possible and mutually beneficial.0 -
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I would add the following criteria:-Easy to explain
-Easy to use
-Have a clear benefit or 'hook' for the user
-Has a solid revenue model
Without it, you might have a cool app or Web site or whatever, but you're going to run out of money faster than you think.
I was employed as CTO of a Web-based company a few idea that had a good idea - and it really was a good idea.
Problem is that they didn't have a revenue model, at least not a real one. They had projected subscriptions for their service in their business plan so that they could get investment, but it turned out that the research they did on this was complete BS - they pulled all their data out of their arse, basically.
The idea was very good though; easy to explain, useful and had a clear benefit or 'hook'. But it made no money - in reality, there was no clear, let alone solid, revenue model. So they burned through their investor's money and eventually the plug was pulled.
Yup, I'd rather a well-implemented mediocre idea than a poorly-implemented brilliant idea, any day.I agree with you there El Rifle. What I said is very over simplified and coming from a particular perspective. Perhaps "Your idea implemented correctly might be worth a fortune" would be more accurate, but then that's not poetic enough for me
After all, Google was not the first search engine out there. Neither was Facebook the first social network. Or the iPhone the first platform that sought to allow third party applications to run on a phone.
In all cases, the first to market or to have the idea could not translate it to success; despite it being easy to explain, useful and had a clear benefit or 'hook'.0 -
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The Corinthian wrote: »Simplistic would be seeing a buy out as your end game, especially at that stage. Actually idiotic more than simplistic.
That would indeed be idiotic, but it's not what I said. I said that there can be more than one outcome, even if a business has no revenue model starting out, or even at a later stage. It would be stupid to start something with being bought out or taken over as your end goal, but it is something that happens to a lot of companies. Of course, many, many multiples more just fail outright.The Corinthian wrote: »Buy outs are a lot more difficult that you might imagine. You actually have to have real IP present before anyone is going to consider spending a penny on you and even if you do make yourself look attractive, it can take a very long time before anyone looks at you, let alone makes you an offer (Instagram - two years before buyout. Tumblr - six years.). So unless your investors are happy to fund a bottomless pit for, say, five years, you're going to be out of luck.
True, and I think Tumblr was an extremely rare case. They probably just came along at the right time (blogging was 'hot'), and investors couldn't ignore the sheer number of users.The Corinthian wrote: »I personally know of one struggling person that won the lotto.
When you start basing your business plan on the same sort of logic, and a white knight coming in and buying you out, turning you into a millionaire, is that kind of logic, then you might as well just play the Lotto, TBH.
Fifteen years ago. Doesn't work as well nowadays. Have you checked how many of these actually survive, even beyond their first year, as opposed to those who who have an actual business model?
I don't think you understand; I've never said 100% fail, because at the end of the day someone does will the Lotto. But to base your business plan on winning the Lotto, rather than an actual business, will see you fail 99.9% of the time. And if you're all fur and no knickers where it comes to your revenue model, most investors will see through you. Even those who won't see you at the start, will realize by the time you come round cap in hand for the next round of funding - which is what happened in that example I witnessed earlier.
If you're serious about an enterprise, treat it as one, not some sort of get-ritch-quick scheme.
I wouldn't base my business plan on 'hey people are going to love this, and once we have the user base the sky's the limit', and I can see how lots of companies have grown without a business model and then run out of runway in spite of impressive growth (again, Daily Booth is the epitome of this scenario).
There is a big difference between saying 'this could happen' (a fortuitous outcome in spite of a weak / non-existent business model), and actually basing your go-to market plan around that great outcome taking place.
I am coming around to your way of thinking a lot more and I can see how in this day and age, investors likely take an even dimmer view of concepts with no clear revenue model (or a solid plan to get to one).
What do you think of models where the starting point is building a community or user base around a particular topic / sector, with the intention of monetising later? To take a hypothetical example, a golfing site / community where the goal is to offer users membership options later on, paid job listings to relevant businesses, etc.
So, building a community first, and then monetising once that user base reaches a 'meaningful' level.
You're going to say 'good luck with that', aren't you?
I guess it's about finding that sweet spot where something is genuinely a good idea, and where there is a clear way to make money. You may never get there (e.g. concept doesn't take off, community doesn't happen), but at least if you start with a clear idea around monetisation, you are in a stronger position.
The way I see it, at this point there is just so much of everything out there now, more than ever you really need something a bit different that will capture people's imagination and break through all the noise.0 -
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Actually, it is what you said. I recommended adding "has a solid revenue model" to the list of idea criteria, which you objected to. For you, the measure of a good idea was "approaches from established companies in the area" and for some reason, the ability for the idea to make its own revenue irrelevant or even cause to consider it not a good idea.That would indeed be idiotic, but it's not what I said.
And without it's own revenue model, how does it become commercially successful? Don't suggest B2B streams such as selling data or services to other companies, because that is a revenue model.
You missed the point; Tumblr too six years to realize a successful buyout. Without any real revenue stream, it is very, very difficult to get someone to bankroll you for even half that time on the hope that you'll win the Lotto and get bought out by one of the big boys.True, and I think Tumblr was an extremely rare case. They probably just came along at the right time (blogging was 'hot'), and investors couldn't ignore the sheer number of users.
Choosing to defer monetization is not the same thing as not bothering to have a means to monetize in the first place.What do you think of models where the starting point is building a community or user base around a particular topic / sector, with the intention of monetising later?
No, because that 'idea' does have a solid revenue model, if properly researched, from the onset.To take a hypothetical example, a golfing site / community where the goal is to offer users membership options later on, paid job listings to relevant businesses, etc.
So, building a community first, and then monetising once that user base reaches a 'meaningful' level.
You're going to say 'good luck with that', aren't you?
What I criticized was where the revenue model is not a factor in the 'good idea' from the onset - the fly-by-night, "let's get a big userbase and then figure out what to do with it" approach.
Bare in mind I've added the caveat of proper research. I've reviewed plenty of business plans over the years, for investors, and one thing that I've found is this is probably the single most common point of failure in any of them.
When seeking investment, they all too often stop being real plans and simply become brochures - sales devices to bring in the money. As a result, while revenue streams are always present, it's easy to spot the bullshìt ones that are just there to keep a potential investor happy; voodoo analysis and dubious research or data being the most obvious recurring means to hide any true substance.
The revenue model in such plans is not properly researched, nor solid.
I agree, which is why I wonder why you didn't include something as important as 'a clear way to make money' in your criteria for a 'good' idea. And then seeming object to being included, when I suggested it.I guess it's about finding that sweet spot where something is genuinely a good idea, and where there is a clear way to make money.
That's somewhat true; there's also no shortage of clones out there who just happen to have better marketing than the guy who had the original idea.The way I see it, at this point there is just so much of everything out there now, more than ever you really need something a bit different that will capture people's imagination and break through all the noise.
However, I've never argued against this. All I did was point out that if your idea does not have a solid revenue model as well, you will be lucky to get very far. You'll need investors with deep pockets to survive until you hopefully stumble on a means to monetize whatever you have, or get bought out, and most investors saw this cowboy approach fifteen years ago - so I wouldn't hold my breath on them all ploughing money into it.0 -
The Corinthian wrote: »Actually, it is what you said. I recommended adding "has a solid revenue model" to the list of idea criteria, which you objected to. For you, the measure of a good idea was "approaches from established companies in the area" and for some reason, the ability for the idea to make its own revenue irrelevant or even cause to consider it not a good idea.
Actually, it isn't what I said but it probably suits your argument to twist it that way! What I actually said was that one of the reasons that a company would purchase or see value in another company - even if that company did not have a revenue model - is where said company would still have something of value to the potential purchaser.
I didn't actually say anything about that being a revenue model in itself, or that a company should see that as their end game.The Corinthian wrote: »And without it's own revenue model, how does it become commercially successful? Don't suggest B2B streams such as selling data or services to other companies, because that is a revenue model.
You missed the point; Tumblr too six years to realize a successful buyout. Without any real revenue stream, it is very, very difficult to get someone to bankroll you for even half that time on the hope that you'll win the Lotto and get bought out by one of the big boys.
Choosing to defer monetization is not the same thing as not bothering to have a means to monetize in the first place.
No, because that 'idea' does have a solid revenue model, if properly researched, from the onset.
What I criticized was where the revenue model is not a factor in the 'good idea' from the onset - the fly-by-night, "let's get a big userbase and then figure out what to do with it" approach.
Bare in mind I've added the caveat of proper research. I've reviewed plenty of business plans over the years, for investors, and one thing that I've found is this is probably the single most common point of failure in any of them.
When seeking investment, they all too often stop being real plans and simply become brochures - sales devices to bring in the money. As a result, while revenue streams are always present, it's easy to spot the bullshìt ones that are just there to keep a potential investor happy; voodoo analysis and dubious research or data being the most obvious recurring means to hide any true substance.
The revenue model in such plans is not properly researched, nor solid.
I agree, which is why I wonder why you didn't include something as important as 'a clear way to make money' in your criteria for a 'good' idea. And then seeming object to being included, when I suggested it.
That's somewhat true; there's also no shortage of clones out there who just happen to have better marketing than the guy who had the original idea.
However, I've never argued against this. All I did was point out that if your idea does not have a solid revenue model as well, you will be lucky to get very far. You'll need investors with deep pockets to survive until you hopefully stumble on a means to monetize whatever you have, or get bought out, and most investors saw this cowboy approach fifteen years ago - so I wouldn't hold my breath on them all ploughing money into it.
The rest I agree with I only saw a Business Insider article at the weekend which basically said that Tumblr still have no real way of making any money. 0 -
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