A lightbulb moment has inspired you with a brilliant business idea. The big question is: now what?
Innovators wanting to develop their ideas into flourishing businesses face a crossroads of decisions. Down one path lies finding funding, down another is protecting intellectual property while another points to marketing.
Choosing which avenue to take first could lay the foundations for a successful business for years to come.
But there’s only one direction entrepreneurs should be tackling as their first priority, according to one startup guru.
Co-founder and director of startup incubator Pollenizer, Mick Liubinskas, says testing a product or service on the market is the very first step every innovator should take.
“Getting the funding for a business is a well known issue, but the hardest part by far is turning an idea into a product that people actually really want,” he says.
“When I speak to entrepreneurs and they talk about ideas, I always say, ‘How many customers have you actually spoken to?’”
Before a cent is spent on your future business, it pays to test your product in the market. Validating should be done as soon and as quickly as possible, says Liubinskas.
“You can’t do that by thinking about it too much or running spreadsheets or whiteboarding it – you have to go as fast as you possibly can and talk to customers,” he says.
There are two ways to talk to customers – research and testing. Research your target market by understanding their situation and getting to grips with their behaviour and psychology.
Test a different group of customers by asking them if they would buy the product and how much they would pay for it.
“You can never validate a business by research alone,” says Liubinskas.
“You can only do it by putting a proposition in front of the customers and asking them to commit.”
An effective way of testing the market is using a crowdfunding platform. It allows you to set a funding goal and ask investors to contribute to that goal. At the end of your crowdfunding campaign, you will have a good measure of whether it’s worth going ahead and what changes need to be made.
Avoid spending too much time or money on marketing or setting up a website before validating your ideas, Liubinskas advises. Testing and researching will enable you to start building the intellectual property of your business.
Kate Jones writes for the business and money sections of The Age and Sydney Morning Herald. She also writes for The New Daily, TAC, RMIT and is a news writing tutor at Monash University.