Google's new wireless service venture, Project Fi, may or may not ultimately be successful. At the moment it works only with a Nexus 6 phone and isn't price competitive for individuals (or families with shared data) who make heavy use of over-the-air data services. But one thing that is relatively different from the rest of the crowd is the payment model.

Users pay $20 a month for unlimited talk and then $10 per gigabyte of data consumed. Don't use all the data and you get a monetary rebate at the end of the month (which presumably gets applied to the next month's bill). Carriers have tried variations on data credits, with T-Mobile allowing you to keep extra data for upwards of a year, but giving back money for unused data is not the common approach.

It's a departure from the practices of Verizon, AT&T, Sprint, and T-Mobile. Being different from competitors isn't enough to guarantee success. You can come up with the most interesting-sounding concept in years and it doesn't necessarily matter. Here are three tests to apply to see if your new concept might, in theory, have legs.

1. Do you solve a new need?

Not every new business idea solves a new fundamental need. But many good ones do. The modern smartphone is an example. So is solar energy panels mounted on homes or businesses. Drought-resistant crops, Teflon, and a host of other things you can think of. Not all products designed for an unmet need will work. What you think is necessary might make consumers turn up their noses, whether it be because you misunderstood the urgency of the need or somehow failed to communicate it, or because aspects of your product or service were perceived as bad enough that they undermined the advantage you hoped to gain. But solving a new need is always a good indicator that you might be onto something.

2. Do you offer a different channel?

Distribution of products can be just as important as the products themselves. Catalog sales made Sears in the 19th century because suddenly people outside of major metropolitan areas had access to necessary products otherwise unavailable. Offering Wi-Fi on a plane may have met a new need, but it also created a new channel for delivery of internet service. The proliferation of food trucks is an example of the growth of an alternate channel. Remember, customers not only want products and services, they want them accessible and even convenient.

3. Have you removed barriers?

Sometimes eliminating problems so people can do what they already wanted to do is the most important service a company can offer. A great example could be Men's Wearhouse. More than a discount retailer selling suits at relatively low prices, it provides a consulting feel, helping someone find the accessories and clothing combinations that work well (while at the same time using higher-margin accessories to help bring in the profit that the discounted suits may not). The stores can often finish alterations quickly if someone is in a hurry. The model lets the ordinary guy get some of the service that typically would be associated with a better clothing shop.

When you're considering a new business, ask yourself which of these three functions it might perform for customers. It you can find at least one, chances are that you've got a better shot of creating a new type of business rather than doing what all your potential competitors do.

Published on: Apr 24, 2015