By Henrik Torstensson, CEO of Lifesum
If you dream of starting your own company after waking up one morning with that ‘Eureka’ idea, it’s well worth remembering the precautionary words of Thomas Edison — “Vision without execution is hallucination.”
What I’m saying is, your idea might be great, but you need to take the time to really figure out what you’re going to do to get things moving. If you’re keen on turning your idea for an app, product or business into reality, a good place to start is by considering the five questions below — they have certainly helped me over the years.
1. Who is my customer and what problems am I really solving for them?2. How much might they be willing to pay?3. How do I even begin to build the product or service?4. How do I find my customers, so I can sell my product to them?5. Where on earth do I find the money to get this properly off the ground?
Okay — I know this might seem like a lot to deal with, but when we break down each point, it’s a lot less complex than at first glance.
1. Once you’ve worked out which problems your idea or product will truly solve, it pretty much answers the question of who the customer will be. But you need to remember the marketing maxim: “Customers don’t want a quarter inch drill, they want a quarter inch hole.” So you need to be honest to yourself and make sure your product is actually solving the problems customers want solved. You can then build up the idea and begin to figure out how it will make money, and where the money will come from.
2. Once you know the problems you’re solving, you can try to put a value on it. How do customers currently cope with the issue? Is your solution something ground-breaking and new? If there are already effective solutions and the market is competitive, you might find that people don’t want to pay a lot. And that’s not the sign of a great business idea.
3. For digital services, great engineers and product developers are worth their weight in gold. You will have to invest in genuinely talented people for anything to take off. Since they’ll be crucial to your success, they will not be cheap, so you need to have a product that can cover salaries or attract external investment. You need to make sure your people are well-rewarded, or they will chase the gold elsewhere!
4. Even with a great team and a great product, you will need to reach your customers through marketing and distribution. Very few things manage to ‘go viral' and stand out among more than 1 million apps and counting, so reaching your customers will require as much thought and work as building the product itself. Once you’ve got enough momentum, you should then focus on accelerating that momentum.
5. If you can get a few of the first points right and see yourself building a £100+ million business, it might make sense raise money from venture capital firms. The best investors — the ones that will truly help you succeed — want to back companies that show the desire to become huge, and can illustrate how they plan to get there. You need to make sure your plan is both crazily ambitious, and also demonstrates clear, short-term next steps.
Of course, each budding entrepreneur is different, and a lot of the steps you take will be affected by the nature of the product itself.