From my experience, and in my opinion, many entrepreneurs are creative thinkers – always coming up with a new, great idea, always jotting down notes in their notebook. I keep an “ideas” journal, and have pages and pages of notes – ideas that I’ll probably never look at again, to ideas with pages of detail and revisions. One of the things I think many struggle with is how to determine if their idea is viable as a business. In our minds, we just know it would work. But what we really need to do is analyze it from one hundred feet. If we can learn to determine what will work and what won’t, we can begin optimizing out time for only those ideas which are worth pursuing, instead of wasting our precious and valuable time on ideas which won’t succeed.
A case in point – Some time ago I had come up with an idea for a niche video website. I began to get into that mode, you know which one I’m talking about – where I just know this original idea will be the next big thing, it’s going to produce this amount of revenue, and it’s going to capture this niche by storm! But, this is where I had to tell myself that this idea needs to be analyzed with an unbiased eye, and I need to do some proper research.
At this point I began looking at the big dog – Youtube. Of course, their internal metrics are not available for public viewing, so I had to take a SWAG (scientific wild ass guess). I knew that, from Youtube’s own admission that “hundreds of thousands” of videos where uploaded daily. Let’s call that number 200,000. I was also able to find out that Youtube gets roughly 91.5 million unique visitors per month. Using some math, we know that there are roughly 3,050,000 unique visitors each day visit Youtube. That means that for every 15 unique visitors, 1 new video is uploaded. Now, of course we don’t have exact numbers here, but it’s good enough to get a ball park figure. I also knew that video sites suck up major bandwidth. From more research, I found out that their bandwidth bill was an astounding $360 million every year! If we do some more math, that’s $30 million per month, divide that by 91.5 million visitors per month, and that’s $0.33 per user. Ouch!
With this information in mind, I knew that if I wanted a run a video site, my number would be similar (in actuality, it would be many more users per new video). If you want to run a content driven website, it can’t appear to be stale, or else why would anyone come back? You need to remember to always think from the bottom up, not top down. What do I mean by that? Top down thinking is – “If I could just get 1% of China’s population to buy my widget, I’d be a millionaire!” – Bottom up thinking is – “How do I get one sale? Ten sales? One hundred sales?”
To summarize this article, I want to stress how important it is to put your ideas under a microscope and look at them from a distance. Do the proper research and think from the bottom up. One quote that I like, and that I think can help you here is, “Genius, in truth, means little more than the faculty of perceiving in an unhabitual way”(William James) – Think about things in ways that are unconventional, ask questions about your research, then question those answers – keep diving deeper.
This will be a series that will continue over the next few weeks. Upcoming articles will talk about creating your value proposition, finding your core competency, finding your potential client, figuring out what your product or service is, distribution and sales, and whether your idea is solving an existing problem, or creating one. All of these things can and should be used as a checklist to determine not only the viability of your new idea, but also, create a solid foundation and plan that gives you clarity as to what you want to do.