I’m asked frequently how I come up with business concepts. Currently, I’m the sole owner of three businesses. I’m also a partner in five others. These are the ones that meet my criteria for investment.
Investment in a new company can come by means of advising, financial investment, time investment, or a combination of all of the above. Great business concepts are all around us. But just as a watched pot never boils, for the starving entrepreneur, legitimate business concepts seem unthinkable.
This is how I come up with business concepts. Trust me. I’ve come up with thousands. Not all are keepers. In fact, most aren’t keepers. But just as Babe Ruth swung more than any other player, a few of those swings turned out to be home runs.
Finding good business concepts is fairly simple once you trigger your reticular activation system. The first time my dad rolled down the driveway in his new jeep, I was in awe. I’d never seen anything like it. Then, after that week, I saw hundreds. It’s just the way we’re wired. You won’t see good business concepts unless you know what you’re looking for.
These are the questions I asked to determine if an idea is a good business concepts:
Do I Need This? – The first thing I ask myself is “Do I need this service/product/idea?”. If the answer is yes, I keep developing the idea. If not, it is very likely that other people won’t need it either. Most good business concepts come from someone looking for something they can’t find. If they can’t find it and they need it, they just create it. I keep these ideas in my Evernote while they marinate.
Does this exist? – If the business concepts already exist, can you do it better than all the rest? If it doesn’t exist, ask why not? These can give you clues to help you better develop your idea.
Am I passionate about this? – You’ve heard the saying that you should do what you love and you’ll never work a day in your life. Well that’s not entirely true. You’ll always have to do tasks you don’t enjoy but if you are passionate about your business concepts, you’ll gladly sacrifice the time and effort to make it a reality.
What’s The Return Period? – What you should really ask yourself is “Are you ready to wait for the return period?” I’m impatient. I want results or at least to see that we’re on the right track. I don’t invest in businesses that require years of financial investment and thousands of hours of work before they show any signs of a return on investment. I want to know right away if there is any chance of this thing floating or not.
Who Do I Know? – The Winklevoss brothers may very well have come up with the idea of Facebook, I don’t know. What I do know is ConnectU and Facebook were very bad business concepts. That is, until Mark Zuckerberg got involved. It is true what they say, “It’s not what you know, but who you know.” I say this is true because in my experience, a business is dependent on who knows what. A good leader brings the right people together to execute a vision.
There are literally millions of business concepts created every day. The ability to decipher between the bad concepts and the good business concepts is where the successful entrepreneur is made. Follow these few questions to know if your idea is a good business concept or a looming disaster.
Share your good business concepts with us in the comments below.