Friday, July 01, 2011

Develop An Idea Into Fundable Business

Every business starts with an idea. Not every idea turns into a business.

The purpose is to filter, refine and develop ideas into a fundable business. Apparently, many people have spent time thinking about this. Evan Williams article "Will it Fly" is a useful one to start. The following is the methodology I will embark for that purpose.

1. Passion

It's going to be a tough journey. You may as well do something that you care deeply about. I believe that education enables and enriches people; thus education changes lives. People change the world; thus education changes the world. I am going to stick to that.

2. Market

The biggest market, or rather the biggest potential impact in education is where the most people are. That is clearly China. Just English language training itself is projected to reach $13.6 Billion dollars in 2014.

3. Making money

Sustained impact comes from sustainable growth. Sustainable growth requires valid, proven business model, where added value per users is larger than average acquisition cost per user. Unless incoming traffic is astronomically high, advertising is not going to be the solution. It needs to be one of transaction, subscription, or lead generation.

4. Validation

The idea needs to be validated, i.e. there is some dude, who you can name and locate, actually willing to reach the wallet to get some version of your product offering. Find the dude and offer him "a solution". A great example, which was used 10 years ago for Zappos was, to just take pictures of shoes from other people's stores and offer them online.

5. Secret sause

Is it possible to build one aspect of the solution exceptionally well so that nobody can compete with. It must be a dimension that real customers actually care about.

6. Scalability

How difficult to scale the operation, hardware cost, salesforce build up, customer support team?

The ideas will be going through this methodology, filtered, refined, and developed. The eventual results will be published in a later post.