Before starting a new company or venture, the first step requires a solid business idea. However, simply having an idea is not enough to make a viable, successful business. In fact, not all good business ideas would actually make a good business. Here are four qualities of a good business startup idea.
Long is the list of startups that offered a product the public simply wasn’t ready for. In fact, some startups succeed where others fail simply because they wait longer for the market to be ready. In 1985, the Coca-Cola company introduced one of the most spectacular flops in history. Dubbed “New Coke,” this version of its patented formula was introduced to the disgust of their most avid fans. Today, when every soda brand on the planet has multiple lines and formulas, New Coke might have been a big hit, but in 1985, the market simply wasn’t ready.
Creating a new product is costly, but people might be willing to invest a small amount in trying something new. What they are less likely to do is invest a large amount in trying a new product that may or may not be superior to an existing product. If you can offer a new product at an attractive price or a product that competes with current offerings at a lower price, then you stand a much better chance of success.
Solves a current pain point
Consumers are unlikely to try something new if it doesn’t offer them a benefit for trying it. If your product promises to solve a problem for them, they are far more likely to give it a shot. In addition, however, the new product also needs to solve a pain point without creating several others. If your product delivers on your promises, they are likely to rave about it to others, thereby promoting additional sales.
Again, you can have the best product on the planet, but if people are satisfied with what they have now, they are much less likely to get excited about something new. Conversely, it also can’t be so new and unfamiliar that potential buyers don’t see its value. Great new product ideas are just new enough to spark excitement and just familiar enough to make people feel comfortable with it.
Destry Witt writes independently of his business, RELiANCE Investing, Inc., which is a Registered Investment Advisor only. This information is not intended to be personalized. This content is for informational purposes only. Nothing presented here should be construed by anyone as an invitation or solicitation to buy or sell any investment.