Not all good ideas translate into good businesses. Many doomed entrepreneurs start their businesses on a whim – they see an opportunity for a one-off product that would make their lives better. Without carefully considering the business, they immediately set out to make the product, and try to build a business around it. There’s more to building a thriving business than the idea alone. Just because you can build something – or make a few sales – doesn’t mean that it’s a feasible business. Think about everything that goes into creating a successful business – sales, distribution, marketing, product development, manufacturing, and much more. As important as the idea is, a myriad of those factors all contribute to a business’s success. Before Groupon became Groupon, the website helped people mobilize and take action. Great idea, bad business.
Beyond the business dynamics, the idea itself can translate into a bad business. Most ideas aren’t defensible. If you get any traction, you can expect a lot of competition, so if you can’t fend off the competitors then you’ll have trouble becoming profitable.
When exploring your idea for a new venture, evaluate it as a holistic, defensible business opportunity, not just a great idea.
