Q: How do I know if my million-dollar idea is worth pursuing?
A: The success of a fantastic business idea does not simply come from its creative genius, but also how the idea is put into action. You can’t know if it’s worth pursuing until you start to pursue it.
First, if you have an idea that you want on the market, you start talking to potential customers. Explore it and look at the alternatives out there. You never get it right the first time.
Go talk, get things out in front of customers, get feedback, adapt, rinse, repeat. Ease into these things. You begin doing it on weekends or maybe if it’s an artistic sort of thing, you do art fairs and see if you gain traction. You find dedicated hobby-oriented groups you can go to. Look at the craft-beer folks, for instance. A lot of those who have their craft brewery started out doing competitions for home brewers. Refine, learn, learn cheap, learn on other people’s money long before you start investing significant amounts of your own.
Second, figure out what the margins are going to be. When you are small and you are new, you would better have big margins. If you are doing something as a hobby that you want to take and roll out into business, you better have big margins because suddenly that hobby gets a lot more expensive. You are adding a few more people, you’re delegating, and you need to pull money out of it, so you need some good margins to cover things.
Third, passion is bigger than people think.
There’s some great research about this by a professor named Melissa Carden. Investors react positively to passion, and passion keeps you going. You get a lot of rejection when you’re starting a business and you’re trying to build it.
Passion matters. It really is important to be doing something you love. Look at the successful businesses. They are not started to make a buck; they are started because they are trying to do something that will be cool, make the world a better place, solve a problem or make people healthier. Good research absolutely backs the idea that having passion motivates your team, motivates investors and motivates future employees.
David Deeds is a professor in the Department of Entrepreneurship, the Schulze Endowed Chair in Entrepreneurship and research director of the Schulze School of Entrepreneurship at the University of St. Thomas Opus College of Business.