When I think through a new business idea, I think about three things: the value proposition, the market size, and the competition. I want to have a clear understanding of the product offerings and why customers would find those desirable. I want to know that the market for those offerings is large enough to offer an opportunity for a meaningful business. And, I want to know who else is already trying to capture those same dollars.
Over the past few weeks, I’ve worked through several ideas. In each case, the pattern of progress has been the same. First, I think I’ve got an idea that is at least mildly innovative. (I’m excited!) Next, I convince myself that the market is large enough to be interesting. (Now I’m very excited!) And, then, I realize that there is already well-established, credible competition offering similar products and services. (Oh no! I’ve ended up depressed.)