I gave a keynote talk at Georgia Tech a couple of weeks ago for a intense startup weekend event called, “Catapult”. They wanted me to share from my experiences consulting with businesses (established and startups), what made for a good business idea.

How do you know you have one that will withstand the test of time - that will soar?

You might be interested to know that about 5 years ago I added this question (Why are we in business?) to my strategy development process. What I had begun to see in different strategy engagements was that owners had lost sight for specifically why they were in business. They had forgotten the passion, the flame that compelled them to endure the unique hell that comes with being a business owner. So now I spend time with owners early in the strategy process trying to sort through the clutter that has become their company and dig for the true answer to, “Why are we in business?”.

I started my talk at Georgia Tech with this profound insight, a business that will withstand the test of time is a business that will,

“Sell what people want to buy.”

You can bet they were all writing down that deep thought. Ha ha. But the sad fact is few startups really think about this. That it is “people” who make buying decisions not companies and these “people” have choices. And it is incumbent on us to know what those choices are and offer a compelling reason for people to open their wallet and buy our product or service over all alternatives.  So how do we know if we have something people want to buy? I have four questions that will help you determine this.

Question 1: What is the fundamental human problem you are solving?

Want to know why billions of investor dollars continue to flood Uber? Look at how thoroughly they understood and solved the multitude of human problems associated with the old cab experience and you will find your answer.  

The business ideas that withstands the test of time are those that thoroughly grasp the human element - addresses what a person feels or struggles with in some aspect of their life (work, home, vacation, school, etc….).

But it is not enough to know the problem, the next series of questions focus on the solution you bring to that problem.
I don't care if you were selling chewing gum, you are solving a fundamental human problem. In this case it can be the problem associated with having a bad taste in your mouth. Or it could be you are paranoid of having bad breath for an upcoming date. Taste and paranoia are uniquely human problems. Chewing gum can solve this problem.

Question 2:  Is your solution game changing or disgustingly disruptive?

Want to know why billions of investor dollars continue to flood Uber? Look at how thoroughly they understood and solved the multitude of human problems associated with the old cab experience and you will find your answer.  

The business ideas that withstands the test of time are those that thoroughly grasp the human element - addresses what a person feels or struggles with in some aspect of their life (work, home, vacation, school, etc….).

But it is not enough to know the problem, the next series of questions focus on the solution you bring to that problem.
I don't care if you were selling chewing gum, you are solving a fundamental human problem. In this case it can be the problem associated with having a bad taste in your mouth. Or it could be you are paranoid of having bad breath for an upcoming date. Taste and paranoia are uniquely human problems. Chewing gum can solve this problem.

The more transformative your solution is the more impact it will have in the marketplace. People tend to take notice of game changers. And entrenched players in the space get caught off guard by these grand solutions and find it a difficult challenge to innovate and compete against them because the old rule book was thrown out. But your solution doesn’t have to be disruptive.

Question 3: Do you appeal to people in a manner no one has or can without significant time or money?

A solution built on research, discovery, or a new process falls into this category. This is especially true if it is patentable.  

But you can still have a viable business idea without a patent.

Question 4: Is your solution unique, with a distinct point of difference - a difference your customer cares about?

If you can’t say yes to one or more of these three questions, and be able to defend that yes with robust proof, then something is wrong. If that is the case it is time then to pause and reexamine things.

If you can give a definitive yes to all three then you have a real winner.  

Let’s look at Uber again.

Were they disruptive to the stodgy immovable cab industry? Absolutely.

Did they appeal to people in a way no one else has or can without sizeable investment or time? Yes - most cab companies are still trying to cope with the changes Uber introduced. In fact most chose to use a strategy of “keep them out” rather than compete with technology and investment. And though Lyft is now playing in their sandbox Uber had a decided first to market advantage.

And finally was Uber’s solution unique with a distinct point of difference? Yes. You bet it was. It was so unique that folks who would never try a cab before now are regular customers of Uber because it is such an efficient solution.

Whether you are an established business, an early stage startup, or a person with a startup idea, take a moment and answer the above questions. Then take your answers to someone who will really scrutinize them. Afterall, leading a business is hard enough on its own. Knowing for certain you are solving a real human problem though will make all the challenges you overcome fulfilling and rewarding.

Struggling with your new business plan or strategic plan. Let Allegro help you. Call or email now.