5 Ways to Know if Your Idea Could Become a Business
By Jenna Schnuer, entrepreneur.com
Brockway has launched major brands that address chronic
problems in the travel sector. But it was the pain of moving house that
led the co-founder of Hotwire and TripIt to tackle his latest venture.
“We moved several times,” Brockway says. “Each time we moved, we would
have furniture that just didn’t fit in our new house, and it was driving
me crazy.
My wife had spent a lot of time finding those [pieces],
picking out the colors, the fabrics, and then we’d basically give it
away or sell that thing on Craigslist or to a consignment shop.”
So
Brockway launched Chairish, an online consigment shop for quality
vintage furniture and home décor, along with his wife, Anna; former
Hotwire partner Eric Grosse; and former TripIt partner Andy Denmark. “It
was an idea that we had from personal experience [and] the pain around
it,” Brockway says.
The idea paid off quickly. “On the very first
day, we actually sold some of that stuff without any marketing … and
the smallest amount of traffic you can imagine,” he says. “We were just,
‘Wow. We’re on to something.’”
The initial interest led the trio
to believe that their curated marketplace could fly, even though they’d
done little in the way of market research. “There are ways of looking at
a business and seeing it’s working,” Brockway says. “Typically, it’s
further along in a business. Most investors, they want to come onboard
when you can show them that you make more money from your customers than
it costs you to find them. When your business gets to that point, it is
super easy. You’re off to the races. The hard part is, how do you tell
if you’re on to something before the numbers start rolling in?”
We
asked some experienced entrepreneurs to give us their criteria for
moving ahead with a new business. Does your idea fit the bill?
1. Your idea solves a problem.
Truly
disruptive ideas provide a balm for some kind of pain, solving a
problem or making life more convenient, efficient or affordable. “At the
very earliest stage, maybe you, the founder, are your only user,” says
Jessica Livingston, partner in Mountain View, Calif.-based early-stage
accelerator Y Combinator, which has funded more than 700 startups.
“Maybe you’re building something to solve your own problem.”
But
chances are that if you’ve noticed a particular problem that needs
solving, others have, too. In 2013, Y Combinator funded a single-founder
company called Medisas. Gautam Sivakumar, a physician, wanted to
address a significant problem plaguing hospitals: the handoff of
patients and their critical medical information to new doctors during
shift changes, which can create confusion that leads to about 60,000
deaths annually.
“He started a startup to basically create
software to facilitate this process so that there weren’t any mistakes
in handwriting, and nothing got lost on a sticky note,” Livingston
says.
Sometimes it takes tweaking to determine the real problem.
When Lisa Falzone and her business partner launched San Francisco-based
Revel Systems, the original plan was to sell an ordering app for
restaurants. “We were in a meeting with our first client trying to sell
him the ordering app,” Falzone says. “He was like, ‘That’s a great idea …
but what I really need is a [point-of-sale] system.’ And he went on and
on about how much he hated dealing with POS companies, and no one would
call him back even for a sales call. I actually told him in the meeting
that we would build it for him. That’s how we started it. We realized
that the point of sale was a huge pain point. Therefore, we saw a great
opportunity to resolve it and make people’s lives better.”
Revel
Systems now sells iPad POS systems for movie theaters, stadiums,
retailers, groceries and restaurants, including Baja Fresh Mexican Grill
and Popeyes Louisiana Kitchen.
2. You’re in it for the long haul.
If
you don’t think you can put in the time and energy to bring your idea
to fruition, don’t bother. Livingston sees this situation often at Y
Combinator. When a business isn’t growing fast enough for the founder’s
liking, she says, “they come to us and they say, ‘I’m just not
passionate about the idea of working in local coupons. It’s just not
that interesting to me.’ I put my head in my hands and think, Then why did you start this? >>>
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