Question: How to check if the idea is good enough to start the business?

This is the question I was asked during a talk I gave to Seed the Future Program organized by Shinhan Future’s Lab Vietnam.

Question: Yes, thank you, Mr. Hung. I saw we still have a lot of questions. Because of the limited time, so I think this will be the last question for you. This is from Mr. Linh Hoang Xuan. Can you please suggest some questions that we can ask ourselves to check if the ideas is good enough to start the business?

Watch the full talk here: 8 + 1 ENTREPRENEUR THINGS TALK.

Answer: Okay, that’s the hard one. I think that of all the people I know, then one of the persons that I know that he can answer the question, that’s my CEO. Because he is the business strategist of the company, the innovation guys. And he’s also behind all the software products that we are doing at KMS. But within my knowledge, then I can suggest something. I hope that it works for you.

The first thing is that you need to really validate, early validation, do early validation of your product or your service idea. So, for example, if it is a software company, I mean, software service, then you can put up a dummy page on the web saying that you are doing this with this feature. And leave a email box, ask people to subscribe, if you want to get to the top first 100 clients for free. And you can test that. If people, if that have attraction, then meaning that people want to buy your service. So what I mean is that finding a way to validate if the service can sell, right?

The next thing is that how big is that of the market, right? If the market is very small and there are players already, then no matter what you do, then you can earn a very little small piece of the cake. So you need to understand about the market. So where you position it and then from that market, how big is the market? So the market size of $1 billion is much different than only $1 million. So and it also impact to your investments as well.

The next thing is that understand about a business model you need to really see, build the financial model for the service and product. And see if you do this, you do that, a lot of assumptions, different context and scenarios, than to see how can you gain, how can you win, how can you, how much of the money that you need to invest as well as you can earn and how long can you bear? So those are the the things that you really need to do at the very early time.

And also, if possible, then recruit for yourself advisor in the field. So you can talk to them. I mean you just schedule one hour session with them and then present your idea and hear what they say. Hear what they say of those experienced people. And the same, same with your potential clients as well. You can really get in touch with them as early as you can and see what their reaction on the idea and the service that you want to build. And then based on that, you will decide, if this is feasible, this is sellable or this is profitable. And to have enough money and enough finance for you to go on. Because that if you, I mean, as I share, cashflow model, if you run into the issue of negative cashflow, you’re dead. And it’s not that you’re dead. Those people with you also got a lot of bad impact from that. So you don’t want to be in that situation. I’m sorry, but then that’s something that’s really living and dying for entrepreneur and then you need to really understand that.

Viet Hung | A Happiness pursuer | Author of The Happiness Journal, Tản mạn về Hạnh phúc and NGẪM CAFÉ 
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