Discovering a Business Idea
Discovering a business idea is the first step towards creating a business model hypothesis. Specifically, a business idea worth investigating further is a “proto-business model” – the embryo of a viable business model. The business idea is essentially your best guess that describes your Value Proposition (the thing you want to sell) and your Customer Segment(s) (the target customers you want to sell to). This is your initial pass at creating a viable Value Proposition – Customer Segment “fit”.
At a minimum, a business idea worth investigating further should have one or more Customer Segments and a corresponding Value Proposition to match each Customer Segment. Completing the following steps will validate that your business idea is worth investigating further.
- Identify Value Proposition – Customer Segment pairings. This step involves pinpointing the type and number of Customer Segment(s) your business is going to serve and what your business’s Value Proposition will be for each of those Customer Segments. This will create one or more Value Proposition – Customer Segment pairings.
- Create a Value Proposition – Customer Segment hypothesis for each pairing. Identify, from a 30,000 foot level, the following:
- What your Customer Segment is trying to do (i.e. eat dinner, find a date, get in shape…). What are your Customer Segment’s problems (they are hungry and don’t want to cook, they can’t find a suitable boyfriend/girlfriend, they are out of shape…). What does your Customer Segment expect to gain from accomplishing whatever they want to do (eat a tasty meal, find a pleasant date, loose a few pounds and feel better)?
- What your company can offer your Customer Segment (i.e. a good quick meal, a matchmaking service, a place to work out…). How will your offer solve your Customer Segment’s problems? What benefits will your offer create for your Customer Segment?