How To Change Your Idea Into A Business
5 Questions For Aspiring Entrepreneurs
Ideas are cheap. Most don’t turn into companies. The key is to build a team, build a product, and find a sustainable business model.
There are five questions every startup founder should ask themselves:
- Who is your customer? (Example: Facebook’s customers were its users)
- What value are you providing? (Example: Facebook was connecting people)
- How will you reach your customers? (Example: Facebook used social networks)
- How will you make money? (Example: Facebook made money by selling ads)
- Can you get enough customers at that price point? (Example: Facebook would never have been able to sell enough ads to survive.)
Ideas come and go. The teams and companies that execute well last.
In this article, we’ll look at the five questions every startup founder should ask themselves.
1. Who is your customer?
Who is your customer? This is the most basic of all questions. If you don’t know who your customer is, how could you know what value you are providing?
Most startups make this mistake. They do market research and find out that their target customer is ‘everyone’, but that’s not specific enough. Everyone can be subdivided into many groups like young professionals, mothers, etc.
You need to be specific about who your customers are, so it becomes easier to figure out what value you are providing to them.
2. What value are you providing?
Once you’ve identified your target customers, it’s time to figure out what value you’re going to provide for them.
This will help you create a better product and business model later on because it will tell you what exactly people want from your product or service.
The best products/services solve the problems that customers have and don’t waste time on things that no one really cares about — at least not enough to pay for it or use it all the time.
3. How will you reach your customers?
Next, you need to figure out how you’ll reach your customers. This is especially important if you’re targeting a niche market because it will tell you what kind of distribution channels or methods you should use to reach them.
It’s possible that the best way to reach them isn’t through online advertising or selling on e-commerce websites.
You might need to have a retail outlet, or meet them at conferences and other offline events, etc.
4. How will you make money?
How will you make money? This is where most startups fail because they don’t pay attention to this question until much later on in their journey.
They just assume that there is some way they’ll make money at the end of the day because they are building a business after all, but it doesn’t really work that way.
Successful startups know their customer, understand their problem and value proposition, and find out the best ways to reach those customers before figuring out how they’ll make money from those customers — not after figuring out everything else first!
Once again, it’s crucial that you figure out your business model early on.
5. Can you get enough customers at that price point?
Finally, you need to figure out whether you can get enough customers at a price point that will allow you to make money.
This is where things get tricky because it’s not really possible to predict how many customers you’ll get or at what price unless you’ve already proven your value proposition in the market.
That’s why we always recommend startups not to focus too much on this question initially. Instead, focus on making sure your product/service works and solving customer problems before worrying about how you’re going to make money from those customers.
Aim for something small and affordable, and grow from there as you learn more about your customers’ needs and how they’d pay for it!
As you can see, the questions are easy to ask, but not so easy to answer. It takes time and effort to figure them out. But the earlier you start asking these questions, the better. It’s better to have a good idea than a best-selling product or service that no one wants or uses!
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces, and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.