Turning your brainstorms into business requires fact-based analysis across five key areas.
Whether you're starting a new company or building a new business within an existing organization, the hardest step is getting out of the starting blocks. Ideas come easy. The challenge is turning your big idea into a business.
We are working with one company has grown over the past decade from a successful startup to a large company with more than $1 billion in revenue. Leveraging an advantaged customer offering in the healthcare space, the management team focused all its efforts on the core business to grow into a large company. Ten years later, they're looking for a return to that entrepreneurial mentality to capture significant opportunities outside of their core in adjacent products and markets.
The company's board is hungry for a resurgence and sees a number of new markets and businesses that they could sink their teeth into. For the next board meeting, our goal is to lay out three to five of these "big ideas" they might pursue, validate those ideas, and then decide the path forward for each.
This approach requires a fact base that justifies why each idea is worth exploring further. For each big idea, we are aiming to answer questions across five key areas:
1) Customers: Who are the customers we might target? What are their unmet needs?
2) Market: How big is the market? How quickly is it growing? In what ways is it evolving?
3) Competitors: Who are the key competitors? For each, what do they offer and how do they deliver it? What are the competitive dynamics in the market?
4) Strengths: Where is the space we can operate? How can we profitably differentiate ourselves?
5) Opportunity: What is the "size of the prize"? What portion of the market can be captured with this new opportunity?
The most important thing about this exercise is to provide options for the management team to pursue. They will need to weigh these opportunities against one another, but also against the needs to grow their existing core business.
The takeaway for entrepreneurs and other business builders: Instead of focusing on one "big idea," consider a number of ideas and assess the opportunity for each across these five key areas.
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