How to Know Which Business Idea Will Work

  This guy has the right idea for his business, right?

If you are considering starting up a business, how do you know which of your business ideas will be best?  Within an existing business, how do you know which new idea will work?

So…. the bad news is, you don't know.  You won't know.  In fact, even some of the best run companies in the world get it wrong.  They have fails and flops.  Anyone out there old enough to remember New Coke?  Enough said.

 In the investing world, the flop mutual funds might just be shut down or merged with another fund with a better track record, but if you try to start up a business without experiencing any failure… it ain't gonna work.

Sara Blakely, Atlanta-resident and Spanx founder, talks frequently about how her father used to encourage the kids to try, to fail, and to talk about the failures.  By de-stigmatizing failure, he freed her to experiment without feeling like everything would be destroyed if things didn't go her way.

The good news for those of you in IT is that you are uniquely prepared for how to figure out which business idea is best – you test.  That's right.  You tell everyone about what you are doing and see who goes for it.  You run two ad campaigns on the same site, each to half of the audience, and see which one sells more.  The way you decide the winner between competing ideas is that you test.

And how else could you do it?  Think of a great new product?  Ask your clients if they will buy it.  Think of a great new service?  See if anyone you know wants it.  Throw it out there and see what people think.

And let me be clear, perfectionists – I'm NOT saying that you work on your idea in sneaky private and then launch it fully baked into the world. I'm saying offer something, and build the course once people say they want it.  Call it a pilot or a beta and build it as you go.  Why bother perfecting something people don't want?  Figure out what people want and then go build it.

In the IT world we have something called a proof of concept, where you just get the thing working and see if it's good.   In business we have a similar concept – the minimum viable product.  Get your course outline together so you can sell it and see what the market thinks.  Polish and perfect as you go.

I've been doing this with my investing course.  I had a guy I worked with for six months teaching financial education during his gap year.  My plan was to teach him financial basics, but I realized two weeks in he'd actually learned a lot from his parents and a class he'd taken in high school.  So I set that plan aside and spent several weeks teaching him investing.  I outlined the whole class and researched each topic in depth the week before I taught it.  I had the basic understanding from my personal experience and prior studies, but I really soaked in it for the week before I taught a topic.

After that, I realized I enjoyed teaching investor education (a topic that is often made to sound very complicated and difficult in order to make room in the field for well-paid professionals who also may not know much other than how to gather assets).  So I took that outline am teaching the class one on one again.

This time through I'm reordering the topics so the content flows more smoothly and makes more sense.  I'm fleshing out the content so instead of an outline, it's an actual book with chapters.  By the time I finish teaching it a second time, I'll have a deliverable – a handbook to investing I can give to clients.  I can then record that material as classes and have a stand alone course.

Don't be afraid to launch, flop, and launch again.  Eventually you'll land on the offering that resonates with your audience.  And you'll learn a lot along the way.