It’s the Holy Grail of business…
Rainmaker, what if you could predict — ahead of time — whether or not your new venture would succeed or fail?
Since many entrepreneurs try 5, 10, 15, even 20 businesses that fail before hitting on their first big success, it would significantly shorten the success curve…
People who might otherwise give up as entrepreneurs would win fast enough that they’d stick with it, and make a big contribution to the world…
There would be less heartache, less agony, and more joy…
Investors would have a heyday. Because for the average private equity investor in early-stage businesses, they’re hoping for 1 in 10 to hit it big enough to make up for breaking even or losing it all on the other 9. Eliminating failures would make investing far more profitable.
There would be more productive use of capital and resources — including talented human resources — and less waste.
Well, what I’m going to tell you might not be a 100% accurate predictor of business success, but it’s a good way to eliminate a lot of inevitable failures…
If you’ve ever hung out in “Startup” communities… Or watched an episode of Shark Tank… Or spent any time with anybody who’s done either…
You probably know that a lot of people have a lot of “business ideas.”
Some give you a pretty good gut feeling. “I’d buy that,” you think.
But there’s a lot of harebrained ideas that could be total losers, or total winners — you just can’t figure out which.
What if I told you there’s a single criteria you could use… A question you could ask… That would give you a reasonable prediction as to whether that idea would succeed or fail when put to the ultimate test of the market?
WARNING: This question WILL screen out businesses that succeed “against the odds…”
For example, I don’t think Twitter would really pass muster here.
Then again, they’re not a great example of a business that’s highly profitable.
They’re just well-funded, and have a lot of users.
They may eventually eke out a profit, but they’re not gushing cash.
There are a lot of businesses like Twitter out there. Media and investor darlings that raise a ton of cash, create something that gets widespread attention or even adoption, but don’t have a strong business model for churning out revenue and especially profits year-in and year-out.
There’s a big difference between selling a dream to investors, and selling real products or services that consumers are willing to pay for at a level that makes your business profitable.
For most of us who live in the real world, we need to focus on the latter, not the former.
Okay, so enough buildup — what’s this secret screen to eliminate failure products and businesses before they start?
It’s actually a remarkably simple question…
“What problem does this solve?”
Nearly every product or service or business that enjoys real, lasting success exists to solve a problem in the market.
Let’s go with some obvious ones…
How about almost anything in health care? You’re sick. You want to be healthy again. So any product or service that can do that for you is something you want to buy.
Finance? We all want to make more money, and save more money. Maybe have access to someone else’s money we can use temporarily when we don’t have enough cash on hand to pay for a purchase. There are products and services and businesses of all stripes that cater to these very basic problems.
How about food? On one level, there’s food to sustain us, and businesses that serve that. From farms to grocery stores, there are a lot of commodity-level food businesses, products, and services. Then there’s food as enjoyment and entertainment. Here we get premium-level food offerings that solve a different problem of wanting more from your food.
Now some less obvious ones…
How about the iPod? We had portable music for a long time. We even had mp3 players. What problem did the iPod solve? Well, at the time there wasn’t yet a stylish, easy-to-use portable music player that let us carry our entire song collection with us wherever we went. There wasn’t necessarily a hue and cry from the market telling of this problem, but it was subconsciously recognized as soon as the solution was made available.
What about Facebook? Well, when “The Facebook” was created, it was a digital alternative to the print “facebook” directories common at many universities. It provided a live way to maintain an always-up-to-date version of your directory profile. And even to connect with friends in a way that the print version never allowed. After initial success at Harvard then other universities, the folks at Facebook realized that everybody had this desire to stay connected with friends and this platform was the perfect solution.
The list could go on, but I hope you’re getting the point…
If you want to create a successful business or new product, your best opportunity is to find a problem and solve it…
You can create a new solution to a problem that’s never been solved before. (This is rare, but can be a huge opportunity.)
You can create a unique and incrementally-better solution than what’s currently out there.
Either way, if you’re providing a solution that people want or need, you’re 90% of the way to success. Your final step is putting it in front of the market and figuring out what price it will bear.
If you’re presented with a product to sell or a business opportunity that doesn’t clearly solve an existing problem in the marketplace, you should certainly think twice about how much time, energy, or resources you’re going to invest in it.
If, on the other hand, you’re presented with a solution to a problem that makes you think, “why didn’t I think of that?!” you should probably get behind it as fast as you can.
It’s not fool-proof and there are a lot of ways people can screw up creating a business out of a good solution to a common problem… But this screen by itself will eliminate white a few dead-on-arrival business ideas that might otherwise be exciting or interesting.
And in doing so, it could help you avoid more losers and get to the winners faster!
Yours for bigger breakthroughs,
Editor, Breakthrough Marketing Secrets