You can't launch a successful business on just an idea. Discovering your strategic asset is the key.
When you start a business from scratch, you have no competitive advantage initially--which makes it hard to build the business. That's why every business needs an initial spark to get it going.
The idea itself is never enough. After all, you can't start a roaring fire by just imagining how great it would be to have one. You need some tools, or strategic assets, like wood, matches and oxygen to get the fire going.
A long line of business success stories have been built off of a strong initial spark. IBM built the services business they have today from a dominant position in mainframe computing. FedEx and UPS built billion-dollar logistics businesses based on their core assets--FedEx had a robust next-day air business and UPS had a leading ground operation. USAA and GEICO built leading financial services companies out of serving a core customer segment, respectively the military and government employees.
If you have a business concept you are thinking of pursuing, we suggest answering the following questions to determine the sparks you have--and the ones you still need.
What are your biggest strengths as an organization? What do you do better than anyone else?
What are your key strategic assets? These could be physical assets, like locations, equipment or an existing sales team, or strengths, such as key customer relationships, reputation and culture.
In which customers or customer segments do you have strengths and experience? What do you know about the needs of these customers? What needs are you uniquely able to meet?
Given the concept you are considering, who would be the ideal person or organization to bring it to market? How do you compare with them relative to your ability to execute it?
If you are successful at executing your concept, who is likely to copy your business model or enter your market? What will be the likely result?
Within the business model that you are aiming to create, which elements of that business model are you uniquely positioned to handle? Where are you best-in-class? Which elements would be best executed by others? Is there a way to focus your efforts on the elements of the business model where you are uniquely suited?
So often we find that entrepreneurial leaders are focused on the quality of the idea rather than the quality of their own strategic assets. That's akin to focusing on the idea of a roaring fire rather than creating the spark to get it going.
KARL STARK AND BILL STEWART are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark