Evaluating Your Idea
Who's gonna buy this?
In the business world, good ideas must pass one test: can they generate a profit? No idea is good, ultimately, if it can't pass this test. This means that someone, somewhere has to pay you more money for your product or service than it costs to produce it. Really, it's that simple-and that challenging. Perhaps the most important part of any business plan is an articulation of the customer. Why will they buy it? When? Where? For how much?
Of course other characteristics are important too: does the idea have a social good or at least do no harm? How challenging is it to make? Is it within the capabilities of the team? Sometimes student teams have great ideas but no way in the world of executing them. You may want to save your great idea until you've had a little more experience with something that's more manageable. Can you raise enough money to finance your idea? Often great ideas fail this test: simply put, they require too much capital to prove themselves.
You're not the only genius out there
So you've got a great, and maybe realistic, idea. You know what? Somebody else is probably working on a solution to the same problem. That's not necessarily a bad thing. A problem is only worth solving if it's a real problem that affects a real population. And you're probably not the only one who's noticed this problem. If you are, your product might be ahead of its time and have a hard time gaining acceptance in the marketplace. The best ideas don't happen in isolation; they're the result of a shared need. The need is what creates the market for your idea. The fact that others may have worked on addressing the same need heightens the importance of finding your own unique slant on the idea.
Talk about it
Talk about your idea with a lot of people, especially people with varied perspectives. But talk with people you trust. (And if you have any concerns about protecting your idea, talk to an intellectual property attorney-see the section "Your Intellectual Property.") It's good to surround yourself with positive people who will give you a lot of encouragement, but don't limit your conversations to people already on your side: talk with people who will challenge your ideas and give you creative suggestions. Talk with people with very different backgrounds from yours. Investigate companies that are doing work similar to yours, and visit some who are doing things that are totally different, and doing them well. See what you can learn from them. Listen to everyone responding to your idea. You may not agree with them, and you definitely don't have to take their advice, but there may be a gem hidden in even the most mundane or unpleasant piece of feedback.
Try it out
Experiment with your ideas while they're still in the raw stage. Don't wait until you've come up with a perfect plan. Depending on the nature of your enterprise, your experimentation can take the form of actually making the product over and over until it comes out the way you want it, or running your ideas by a test audience to gauge its reaction.
Take advantage of all the tools and resources available to you. Spend time in your school's library or entrepreneurial research center. Read books and magazines, watch videos (visit eclips.cornell.edu for a wealth of entrepreneurship-related video clips), and find out what experienced entrepreneurs have to say. Subscribe to an entrepreneurship magazine (Entrepreneur, Fast Company, Inc.), and spend time reading online articles. Find out what other resources they recommend, and if your school library doesn't have them, try inter-library loan. Join an entrepreneurship club or a similar community-based organization. Most importantly, get to know experienced entrepreneurs face-to-face, and listen to their stories.
Check in with yourself
Now why are you doing this again? Review your purpose in this project-what you hope to achieve, and what problem you hope to solve. It's okay if your purpose has changed since the project's outset. It will probably change many more times before you're through.
The validation phase
Once you've tested your idea with constituents, colleagues and mentors, and adjusted the idea to the point where you feel ready to take it to the public, seek external validation to get the funding and other support necessary to move ahead. Validation is the main purpose of a business plan. A business plan lays out your idea in a holistic manner so that prospective funders can enter into a partnership with confidence. See section 4, The Plan, for much more information on business plans.
Trial and error
From "Hidden Asset," by Bill Breen, Fast Company, March 2004 http://www.fastcompany.com/magazine/80/davenport.html
They moved their flight testing from Kitty Hawk to their home town of Dayton, Ohio, and flew their new aircraft at Huffman's Field on the edge of town. With new, more powerful aircraft, they were able to stay aloft for up to a half hour, fly figure eights, and even take passengers up for a ride. The age of the airplane had arrived.