"I have too many business ideas. How do I pick the most promising one?"
Updated: Nov 28, 2021
This is a recurring question in my coaching practice, so I decided to share my view on it.
Few things can jeopardise more your trajectory as an entrepreneur than distractions. Focus is absolutely key when walking down your build-measure-learn journey, which is highly distracting in itself. Entrepreneurs scoring higher on creativity may have more ideas than they can handle, and an overwhelming number of ideas can be the source of killing distractions. Try tackling many at the same time, and you’ll be destined to fail all of them.
The question then becomes how to prioritise the ideas that are more likely to be successful. In other words, how am I sure I’m spending my time, as an entrepreneur, on the ideas that are more likely to become a success? Time is a scarce resource, impossible to be recovered, and you want to use it as efficiently and effectively as possible.
Working with entrepreneurs for so many years, I can assure you: you’ll never be sure. Being sure, by the way, doesn’t belong to the entrepreneur’s vocabulary. But there’s a way to increase your time expenditure effectiveness and increase your chances of success with your list of ideas. It’s made of three steps:
1. Focus on the journey, not on the outcome
But what does it mean, in practice? It means that what most people see as success (another investment round, going public, exiting with a [insert the figure here] multiple) is actually the collection of endless smaller successes that, put together, allowed the achievement of the huge, glowing, powerful milestone people talk about. Talk to successful founders and ask them what they most focused on, and I’m sure they will mention about learning, testing, making decisions of pivot x persevere x kill, etc, everything that happens throughout time, not at once. It’s about the journey, not the destination.
Keep in mind that your major goal as an early stage start-up is to learn about your customer pains and how you can help them overcome such pains. And learning comes from testing assumptions you make in the very beginning. To perform effective tests, you need to tap on several resources: data sets, literature, target audience individuals, competitors, you name it. Your access to these resources is a powerful indicator to which ideas you’ll try out first.
2. Check where can you learn best
Your most promising ideas are not necessarily the ones with bigger markets, weaker competitors, or less stablished business models. Your most promising ideas are the ones you can learn more, better, and faster about. And, as I mentioned before, you learn by testing your assumptions. The ideas which you can test more effectively (collecting valuable feedback about) will be the ones worth giving a try first. The variables I usually work with are:
a) Your knowledge about your target market: you need to have a substantial knowledge about your target market to avoid the trap of reinventing the wheel. Keep an open mind about it, though, as your extensive experience with this market may inflict a tunnelled vision on you. Being open about seeing things differently will help you overcome this risk.
b) The knowledge of your first- and second-degree network: your initial validations usually come from close connections (1st degree)— colleagues, friends, family — the the connections of these connections (2nd degree). You will build up on their knowledge to give the first validation steps.
c) Easily available data: there’s a lot of data available today which you could tap on and a lot of them are free. Search entry stats, trending topics, data pools, and certainly anything you search for “+ data” on search engines will give you an edge on validation through existing data.
d) Ease of prototyping: early on the validation journey you will need to prototype your idea. How easily and cheaply you can prototype will influence on the decision on which idea to prototype first. Usually software trumps hardware. Mock up as much as possible to keep costs low but be sure to keep the features you would like your audience to test.
With these variables and your list of ideas you can build a simple idea ranking matrix. It’s important that you have clear measure units for each variable: years of work with such market/technology; intensity of network connections (intensity here is a proxy for the likelihood of someone actually sharing feedback and insights with you. Quantity is not the only variable. You’re way better served if you have a network of 20 people willing to share their thoughts with you than 1.000 unwilling), etc. Something like this:
The ranks, measure units, and the scores are upon your discretion. The important feature here is to objectively measure which ideas are worth trying first.
After ranking the ideas, you have a clear picture of which one of them you would tackle first. Go out and test them. Build your test plan, apply the test, collect and analyse data, reflect, and pivot or persevere. Build a consistent test log and journal your experience from the very beginning. If an idea reaches the kill point (a dead end in either the desirability, the feasibility or viability requirements), jump to the next one and restart the cycle.
Successful entrepreneurship is much like sports. The more you practice, the better you get at it. So start with the most promising ideas, train your entrepreneurial muscle, and keep on building-measuring-learning cycles until you can reach major milestones in the start-up development life.
PS: Pro tip: if you need guidance on building, executing, and logging tests, this book is the tool you will want with you.