How to Choose The Perfect Business Idea For You

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This is a re-post of Steve Faktor’s original article on Linkedin Today

Lately, several executives and aspiring entrepreneurs have asked me the same terrifying question: “What should I do next?” I’m not sure how I became Dr. Phil for anxious professionals, but suddenly I’m fighting the urge to grow a bushy, un-ironic mustache. Maybe writing a book about the future of US innovation makes people assume you have all kinds of answers… But everyone seeks a slightly different answer. Some aspire to build the next Facebook. Others are deciding what product to launch. A few just want to break free from their desks – and possibly, set them on fire. Today, I’d like to share the advice I gave them – minus the smudged napkin drawings and fire safety lecture.

How to choose

Whether you’re thinking of starting a mobile app company, a massage parlor or a restaurant, three factors will determine if your venture will have a happy ending: your abilities, your connections, and market demand. These apply to individuals and corporations. Let’s start with people first.

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1. YOur Abilities

Ability includes everything from raw talent to industry knowledge to functional skills. It also requires a sober assessment of your strengths, weaknesses and delusions. For every person who looks in the mirror and sees a Kryptonian conqueror of commerce, there might be a dozen who should be seeing a six-foot bunny rabbit.

Not everyone is that self-aware. I’ve had a few surreal conversations with people with a long trail of half-baked projects, disgruntled clients, and ultra-safe decisions who think it’s time to raise VC capital. A force field of insecurities can prevent people from seeing themselves as the world sees them. I noticed this when I wrote my 9 Corporate Personality Types article on Forbes. Everyone who read it seemed to think they were a ‘Natural’ (a pragmatist with innate leadership skills). A few friends even wrote me to confirm that they were, in fact, Naturals. My response to them was, “A Natural would never ask.”

There’s no substitute for brutally honest feedback from smart, trusted people who know you. Do you have the tenacity to compete in this market? Does the opportunity play to your strengths? Can you get the resources and capital required? Do you have the will to ride out the hard times? Are you terrible with people, but considering a high-touch service business? Harsh truth and a good cry beat a delinquent SBA loan any day.

Passion is the last tricky piece of the puzzle. Everyone wants to hug and high-five after a good ‘follow your passion’ pep talk. But like hairlines and bust lines, passions shift with time. Most work isn’t Oz, where singing dwarves and benevolent wizards make your dreams come true. Fun already has a name, it’s called vacation. Tenacity, personal excellence, and fear of failure have produced as many great achievements as passion.

2. Your connections

Few ventures succeed without the right relationships. When it comes to starting your own business or selling a new product or service, who you know is a big deal. That doesn’t mean everyone needs to know rich investors or send adoption requests to Warren Buffet. You do need access to people, communities and channels that can make your efforts successful. Some might be investors, customers, or tastemakers who influence others to buy. Others can introduce you to the right people or provide emotional support.

The most amazing thing about pursuing something entrepreneurial is that a world of possibilities opens up. Everyone from family to friends to government will work harder than you think to help you succeed. You’ll also find plenty of other doers forming communities to help each other along the way. Even those who continue working for large corporations or government are now waking up to their deeper purpose—to buy from and invest in the next generation of risk-takers.

3. Market opportunity

I mention opportunities last because this is where most people start. There are lots of great ideas, but some of the best might not be right for you – regardless of how big the market is. As the “innovation guy”, I’m risking years of therapy and Deepak Chopra videos to admit one simple truth: not every opportunity needs to be that unique or original. It just needs to be viable and defensible. A friend of mine bought one, then two, Subway franchises. Both were already successful businesses in great locations with existing customers. He wasn’t looking to change the world, just to execute on a proven model. Now he’s using profits from those stores to fund future ones. Another friend did the same with tax preparation franchises. Now he’s under 40 and semi-retired – without ever having to reinvent the wheel.

There are lots of ways to evaluate opportunities that are outside the scope of this article. Suffice it to say that at a venture level, there are few truly impenetrable markets. Here are a few ways to tell if something you’re considering is a good opportunity:

  • Someone is already paying you for it
  • Someone is paying others like you for it
  • When you share your idea, people offer to help you or to invest in it

A corporate flavor

Inspired by Mitt Romney’s observation that, “corporations are people,” I think much of this thinking also applies to companies deciding which products or services to launch. Think of “abilities” as capabilities or competencies – what your company is good at delivering and what it isn’t. “Connections” are another way of saying relationships with the kinds of customers that would buy a given product or service. The third is self-explanatory.

Final thoughts

Talk to lots of smart people about your aspirations. The more they know, the more constructive feedback and introductions they can offer. You’ll also plant a seed. They will think of you when a relevant opportunity comes up.

Partner with others who are in the same space or offering related services to the same customers you’re targeting. Work with people who complement your skills. If you’re a creative visionary prone to wasting time on Pinterest, find a doer who knows how to execute. Ying needs yang.

OK, nothing is really guaranteed… Fulfillment and success are not entitlements. Anything new will require you to work your ass off. So, here’s to your new venture…and slimmer backside!

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Provocative predictions & prescriptions on where innovation, economics & culture will take us. Fearless. Funny.