The four facets of a good business idea

I was reading an article in the Harvard Business Review* this morning about established companies that create entrepreneurial start-ups to try out new business ideas. They typically generate a huge number of potential ideas and need to whittle them down to the one idea that has the best chance of success.

They do this by asking four questions. These are questions that I’ve used before when working with my clients. And they’re well worth remembering.

First, is the idea desirable? Does it create something that your organisation needs (or that your clients need), target a problem that you are experiencing or seek to address a challenge that you are facing? If it does, that’s great. If it doesn’t, find something that does.

Second, is the idea feasible? Is there a realistic chance that it will work? Will it actually create what it sets out to create, solve the problem that it is targeting or address the challenge that you are facing? It doesn’t have to be a sure thing, but we’re looking for a reasonable chance of success.

Third, is the idea viable? Can we make it happen in practice? Do we have the skills, resources and expertise required to implement it? Or can we bring in these skills, resources and expertise when we need them? And if we have competitors, can we do it quicker or better than they can?

Fourth, is the idea scalable? If it works as well as we’d like it to, can we roll it out to other parts of the organisation or to more of our clients? Can we reduce the unit cost through increased volume of activity? Can we use it as a platform on which to build further ideas?

As the HBR authors point out, desirability is the fundamental issue here. It’s not just about solving problems or creating benefits. It’s about solving big problems that cause people and organisations major headaches. Or about creating huge and sustainable benefits that people value greatly.

It’s not enough to simply have an idea. You need the right idea. And these four questions will help you to find it.

* The Hybrid Start-Up, by Nathan Furr and Kate O’Keeffe, Harvard Business Review, March-April 2023, pp. 86-95.

Simon Perks is the founder and director of Sockmonkey Consulting. He helps organisations with a social purpose to make better decisions, to improve their performance and to drive positive change. Sign up for his free monthly newsletter here.

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