At the root of most new businesses is a single idea that promises to either change an industry or make life better for a target demographic (sometimes both). But the strength of that idea can make or break the feasibility of the business. A seemingly good idea with flaws can cause the entire foundation to collapse, while a questionable idea with more merits than faults might be abandoned despite having a real shot at success.
The first line of defense in verifying the feasibility of an entrepreneurial idea is research. During the business-plan phase, you’ll exhaustively research similar businesses already on the market and closely examine your target demographics to see if your solution is truly a good fit. But there are some variables that data can’t account for, and some situations that can’t be objectively measured.
How do you test your entrepreneurial idea in the absence of practical, real-life applications? Thought experiments allow you to imagine your business from different critical angles, probing it for any weaknesses well in advance of its official launch. These five thought experiments are perfect for evaluating the strength of your idea:
1. Rip it to pieces.
Give yourself permission, no matter how much you love your idea or how perfect it might seem on the surface, to destroy it. Instead of looking for ways to justify why your idea is strong, this experiment is all about looking for ways to identify why it’s weak.
Begin the experiment with a new preconceived notion: your idea is terrible, and full of flaws. Imagine yourself in the role of a dissatisfied customer, and that there’s a cash prize for the number of flaws you can find. List them. This will help you identify weaknesses you may not have otherwise imagined existing.
2. A competitor emerges.
Currently, there may be only a handful of indirect competitors for your idea on the market, or there may be a wide-open landscape. In this thought experiment, your goal is to design a competing brand.
What would this brand do to differentiate itself from yours? How would it improve upon your original model? These questions will help you fortify your own brand against the emergence of an inevitable competitor, and may even help you take your brand in a new direction.
Competitors are going to emerge no matter what, so the further ahead you can think about the possibilities, the better.
3. The decade test.
The “decade test” thought experiment is an especially important one for the longevity of your business idea. The concept is to imagine life a decade from now, and evaluate your business’s place in it.
For example, let’s imagine it’s 2025 and today’s trends have all but died away. Internet access is universal, self-driving cars rule the streets, drones are delivering everything and virtual reality is the new communication mode of choice.
These are speculative developments, but they help you imagine a very different world from ours today. How will your idea stand up? Is your idea timeless, or does it depend on a current trend or paradigm that might expire within the next 10 years?
4. The growth chart.
The growth chart is less of an experiment and more of a giant brainstorming initiative. Here, you’ll imagine all the different ways your business will be able to grow over the first few years of its development.
For example, could you branch out geographically, or would it be better to branch out demographically? Can you apply the product to a new medium, or simply make improvements to your original model?
Branch out as many of these possible development lines as possible, and determine how agile your idea really is. The more flexible you can be, the better your idea will hold up to changing environments.
5. The relationship test.
Finally, you’ll test the possible customer relationships your brand will be able to support. Imagine a customer who’s thrilled with your product or service. What’s the best-case scenario? Will he/she come back to purchase more? Will he/she pay more for a subscription? Will he/she tell his/her friends about the service?
This experiment will help you evaluate how much recurring revenue you’ll be able to generate by keeping your customers happy. Essentially, it’s a measure of how much your revenue can grow.
If you’ve got what you feel is a strong business idea, use these thought experiments to put it to the test. Don’t go easy. The harder and more critical you are at the earliest stages of business development, the better you’ll stand against the real hardships of business ownership when they come.
For more insights on how to start a business, grab my ebook, The Modern Entrepreneur: How to Build a Successful Startup, from Beginning to End.