Peter: “I’ve got a billion dollar idea. Let’s build an app.”
Me: “What sort of app?”
Peter: “That’s where you come in.”
This conversation with a friend took place about three years ago. Unfortunately, it’s not the only approach we’ve had like this. A lot of people are in the boat of “I have this great idea, I’ll get someone else to do the legwork, and I’ll make all the money. I’ll just stand back and crack the whip.”
Either they don’t know how to execute, or they secretly don’t want to. Because they’re subconsciously scared it’s not going to work, or they can’t do it, or they just don’t want to put the work in.
Another company we spoke to wanted to make an app around machine learning. We asked them how they were going to build the actual algorithm to determine how it worked. Their response? “The techies will figure it out.”
Founders frequently show a serious lack of appreciation for what it takes to execute. They don’t know how to solve the problem themselves, and they’re dismissive of the complexities. They are the wannabes, the “wantrepreneurs”.
So are you a wannabe who just pretends, or are you going to do something about it?
Do you have an idea?
Many founders don’t even have an actual idea when they start out, but want to create a startup because they want to run a business. This is still a valid aim, but if you don’t have an idea, you need to get one. A nebulous idea to “disrupt an industry” with your app isn’t enough – you need to have identified opportunity or a product gap, and have an idea to fill it.
Does an idea need to be original? No. It needs to have some unique aspect: to do something differently, or better, or in a more appealing or cool way. This could even be brilliant marketing or branding. Just consider the “Pepsi paradox”: people prefer Pepsi in blind taste tests, but they buy more Coke because branding made it culturally iconic.
On Shark Tank they’ll always ask about a unique idea, but they’ll often invest even if it isn’t. Food delivery, for example, is a very saturated market, but there are still new businesses being created. It can actually be harder to break through with a brand new idea, because there’s no market for it. That means you face the task of having to educate the market, which is a barrier to entry.
Validating your idea is a whole other issue. Friends and family will probably be an echo chamber of encouragement (or discouragement), which won’t have much value. You could try interviews and surveys, but in my opinion most people don’t know how to conduct them by knowing how to formulate good questions.
For example, I met some people who were building an app to get better interest rates. They did a survey on people who liked to save money. 100 percent of respondents said they liked to save money, and the founders used this as justification for their app. The conclusions people draw are often too far-fetched. True validation is only going to come when your idea has been tested in the market.
Documenting your requirements
For those who aren’t wannabes, and have a potentially valid idea, a logical next step is for them to actually document their requirements, and get some insight into expertise around building the product. Development lifecycles commonly cost twice as much and last three times as long as anticipated: and nearly every time this is because they weren’t clear about the requirements.
Requirements should cover use cases on how someone will use your system (here is a sample of typical requirements). Essentially, you’re documenting who your users are, and what they’ll do on your system.
If you feel overwhelmed by it, don’t! There’s plenty of help out there. If you do requirements with someone in the startup industry, not only will they do the document, but they can offer valuable feedback based on other startups they’ve seen, give you insights into the types of technology available, and suggest improvements.
Then it’s time for some tough questions:
- Can you execute your idea? Every idea is potentially viable, but what’s your execution strategy? How are you actually going to build and test your product or service?
- Can you find developers? If you’re not a developer yourself, you’ll have to hire someone who is. Do you know what skills you need? It can be challenging to even know what kind of developers you’re looking for. You may need to get expert help with this, or attend a hackathon.
- Can you fund your idea? If you can’t find anyone with money or prepared to give you money – from friends/family to angel investors, and your lottery numbers failed to come up again, then frankly, you need to re-evaluate if anyone actually believes in the vision enough to support it. Perhaps you need to do something else. Getting a job in another startup is a great idea, even a vital one. You’ll learn how things work, and maybe get an idea of whether running a startup is for you.
An industry colleague recently remarked that many Australian founders were motivated by the idea of “not working for a big corporate”. The reality is that that it’s not necessarily an easier ride to run a startup. It might be more exciting but it’s much more stressful. You don’t suddenly get handed endless freedom, instead you face much longer hours, with no overtime pay.
But if you’ve managed to answer Yes to all of the above, congratulations. You’re probably ready to build your MVP.
Simran Gambhir is the founder of technology and software solutions provider Ganemo Group. He was previously CTO for Flybuys and News Corp’s digital arm.