Pitching Your Business Idea #1 — 5 Things You Need to Define
Hi. I heard you have an idea.
Good. Welcome to the starting point of a pursuit that will drive you to be chained to it for a long time, one that will force you to sacrifice a lot in your life, and only has minimal chances of success.
Also, welcome to the happiness of pursuit, the joy of learning, and a feeling that this might just be worth spending time and effort on.
Great, now that I’ve gotten my psuedo-philosophical rant over with, let us begin.
Here’s the 5-step process:
- Define Problem you are solving
- Size the Potential Market you are planning to solve this problem for
- Outline your Solution for the problem
- Outline Competitive Landscape
- Outline Business Model (how do you make $$)?
Now, your turn to answer these questions.
Problem: Define it
Output: 1 sentence detailing exact problem you are solving
Dropbox : There is no easy way to share my documents across devices
Yelp: There is no easy way to find places around me that I know I will like
Uber/Lyft: There is no easy way to hail a ride when I need it
Amazon: There is no easy way to find and get the books I want
Market: Size it
Output: Number of people in your market who could buy your solution + who you should target first
Who has the problem I want to solve?
- Total Addressable Market: How many people do I wish to reach with my product?
- Serviceable Addressable Market: How many people fall into my target market?
- Beachhead Market: Who should I target first?
Example: Coffee Bean Delivery Service in Austin
Total Addressable Market = How many people drink coffee?
Serviceable Addressable Market = How many brew coffee at home?
Beachhead = How many, those between 27–60 years of age and who brew coffee at home, are in Austin?
Solution: Outline it
Output: Key elements of your product or service.
How does it solve the problem of my Serviceable Addressable Market? Why does it work? Why would customers want to buy from me and not others?
Competitive Landscape: Outline it
Output: List of existing alternative products/services
How are customers trying to solve this problem at the moment? Which companies are trying to solve the same problem as me? Are they direct competitors or alternatives?
How is my solution better than their’s? Is my solution cheaper? Is my solution faster? Is it more convenient?
Business Model: Outline it
Output: List of income sources
Is it ad sales? Subscription fees? Do your buyers pay for expanding product features?
Who pays for this — is there a distinction between buyer and user? (If you’re selling kids diapers, my buyers are parents, and my users are… well, you get it)
Congratulations, you made it! You just started A BUSIN — no, you didn’t.
But hey, it’s a good start.