Have a crazy idea for a business venture? To avoid a shark attack, start by evaluating whether or not you can explain your services clearly.
Just about everyone at one time or another thinks they’ve got an idea for a new business. But maybe we hesitate because, well, it sounds kind of stupid.
Of course, that didn’t stop Gary Dahl. He thought up “pet rocks.”
Dahl bought some stones from a builder’s supply store, put them in in boxes with holes (so the rocks could “breathe”) and added straw bedding and an instruction manual on how to care for your pet rock.
Production costs were less than a dollar for each rock, which then sold at retail for $3.95. According to The New York Times, 1.5 million units were sold; Dahl used the profits to purchase a saloon.
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Of course, not every stupid idea is going to turn into the next pet rock. (Be warned, pet rocks spawned several imitations for which the original creator was not compensated, the market was oversaturated and the pet rock, like any fad, eventually went the way of the dodo.)
Lorni Li of Entrepreneurs for a Change estimates that maybe one out of a hundred stupid ideas ever becomes a serious business venture. So how do you know if your stupid idea is that one in a hundred that is going to defy logic and be the next big thing, or if it really is stupid?
Well, you could try to get on Shark Tank where people try to pitch everything from edible cups to a sock of the month club to knit hats with faceplates that make you look like a Viking or Santa Claus. If these sound stupid to you, well, they all made their way to television. But that’s not the same thing as having a good business idea.
Avoid the Elephant in the Room
Consider the case of the marriage counseling aid Elephant Chat—so-called because of the proverbial “elephant in the room” issue that no one wants to tackle—you bring out as a signal to your partner that you need to discuss something. If you’re wondering why a $59 stuffed animal can help you more effectively communicate with your partner, so did the Shark Tank panel. Because it was a really stupid idea that the wannabe entrepreneurs hadn’t thought out.
As Jon Bois of SB Nation points out, these hapless folk were used as a “ringer—the person a show's producers find time for even though that person has absolutely no shot in Hell [and is] not in on the joke [despite having invested massive amounts of time and money into ventures they genuinely believe in]…The show runners, without a doubt, knew they were sending this couple to their certain doom.”
So how do you avoid being the rube in the room in presenting a business idea that’s doomed from the start?
Avoid a Shark Attack
Here are some general guidelines based in part on Jeff Steinman’s suggestions in the Huffington Post on “How to Know if Your Business Idea is Stupid.”
- Make your business idea into an infomercial. You don’t have to make an actual infomercial, but if you were making one, how would you sell your product to someone sitting up late at night with nothing else to do but watch an infomercial? How would you convince your audience this is something that they need, that they can afford, that they won’t regret buying when they finally go to bed and wake up the next morning? Put yourself into “the head” of that person watching your infomercial and ask yourself why anyone would be interested in what you’re trying to pitch.
- Ask your friends what they think. By “friends” we mean people who will make the effort to listen to your idea, think about it and then tell you honestly what they think. We mean the type of friend who won’t mind hurting your feelings if something is truly stupid, because isn’t that what friends are for?
- If someone thinks your idea is stupid, ask them why. Maybe you just need to rethink your idea. Maybe you’re targeting the wrong audience or there’s some feature that your product lacks. Maybe instead of selling a stuffed elephant, the couple on Shark Tank could have written a book on better communication skills between partners or produced a video with examples of better listening skills.
- Figure out who your customers are and what they want that they don’t already have. You want to provide a product or service people actually want. Maybe they don’t know that they want it, but you have compelling reasons to convince them that they do. But what you’re not doing is starting a business just because of an idea ITALICSyou think is pretty cool. The couple on Shark Tank probably thought that it was cute to use a stuffed animal to signify they wanted to talk about something. And they are probably correct that there are potential customers who are willing to pay money for something that may improve their marriage. The problem was that a stuffed animal isn’t going to do that. The couple identified a market, but what they didn’t provide was a product that satisfied the needs of the market. If a couple wants something to signify they need to have a discussion about something, there are plenty of places to buy a stuffed toy or some other symbol if they actually need to do that instead of saying, “Hey, I’ve got something I want to talk about.” What a couple needs is some techniques to get the conversation going and ensure both parties can achieve a successful resolution. A stuffed toy that you could get cheaper elsewhere doesn’t satisfy that need.
Finally and perhaps most importantly, let’s assume your idea isn’t stupid. Here are two more key questions.
- How much is it actually going to cost to make this thing?
- Can I price it at a point where people might actually want to buy it, and can I actually make a profit?
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There’s one more thing. As Larah Litchie points out, it’s stupid to run a business if you don’t think you have the time and commitment to do so or if it’s not something you want to spend a lot of time doing.