Converting an Idea to Moneymaker
By Marty Nemko
You've got an idea for a new business. Alas, ideas are a dime a dozen. Here's how to turn your concept into a moneymaker.
Let's say your idea is an online service that matches mentors with protégés. You figure that most people wish they had a mentor, but rarely find one. And other people enjoy being mentors, but nobody's asking. So why not create an online mentor/protégé matching service? After all, if match.com and eharmony.com make millions of dollars matching romantic partners, why not a service to match those seeking a mentor with those wanting to be one?
The first step in developing any new business is to research the competition. Start easy: Google. In this case, I googled phrases such as "mentoring organizations" and "mentoring services." And then "adult-to-adult mentoring" and "mentoring between adults" Not one led me to the kind of mentor/protégé matching service I had in mind.
Using my web browser, I typed in "mentormatch.com, "mentormatcher.com, and mentorfinder.com. None of them turned up anything similar to my idea.
That made me nervous. If my idea is so good, why is no one doing it? So, if I were seriously pursuing MentorMatch, my next step would be to phone the directors of some mentoring programs and ask why they hadn't developed an online matching program.
I probably wouldn't bother trying to get them to sign a non-disclosure agreement. Often, they won't sign, or doing so makes them more suspicious of me and therefore withholding of information. I believe the risk of their stealing an idea is small. Over the years, I've found that rarely will someone go through much effort to implement an idea that wasn't theirs. And worst case, if they steal it, I will have, with no effort, gotten one of my ideas for improving the world implemented without my having to do any work. There's no shortage of good ideas. I'll come up with others.
If my research uncovered other mentor/protégé matching services, my next step would be to incorporate their best features into MentorMatch. To that end, I’d dig around each competitor’s site and at the most impressive ones, I’d enroll as a mentor or protégé so I can experience it first-hand. I’d ask fellow mentors and protégés on the site what they like and don’t like about the service and for suggestions on how to improve it. I’d incorporate the best ideas into MentorMatch.
Assuming my inquiries didn't yield a fatal flaw in MentorMatch, I'd develop a low-risk prototype -nothing fancy, just enough to assess the concept's promise. I'd find a programmer who had worked on creating a dating website. I'd opt for the programmer of a simple site rather than one who worked on match.com, which probably was created by a team of high-priced programmers.
I'd try the prototype on two dozen friends and colleagues, perhaps using Zoomerang.com, a site that allows you to conduct online surveys. I'd beg my guinea pigs, "Tell me the truth. Do you really like MentorMatch? How would you improve it? How much would you really pay to use it? Better I should know now that you think it's worthless than after I've sunk a lot more money into it." If my friends were genuinely excited about the prototype, I'd develop an improved version and then, rather than try to drive traffic to the site, try to sell it to sites that already had career-related traffic, for example, monster.com, careerbuilder.com, or USNews/career.
But what if I wanted to start a business selling a product, for example, hand-made pottery? I wouldn’t just sell my own pottery because that would probably require me to be producing pots nonstop leaving no time for the all-important sales and marketing. Besides, I wouldn’t be able to offer a wide enough selection.
So, my first step would be to find a few other potters that produced good quantities of commercial work who would be willing to let me sell their pottery on consignment, and on which they’d get 50 percent of the sales price and I’d get 50 percent. Most artisans hate sales and marketing, so it shouldn’t be too difficult to find willing potters.
With my stable of fine and compliant potters in tow, I’d pilot-test different vehicles for selling: Ebay, a website I’d create, and wholesaling to pottery stores and websites. I wouldn’t invest much in any approach until I had empirical evidence they work.
To prepare to sell on EBay, I’d read Lissa McGrath’s 20 Questions to Ask before Selling on EBay. To create and host my site, I’d use Yahoo Store (www.store.yahoo.com.) or an EBay Store (www.ebaystores.com.) For tips on how to get a site to appear high on Google and Yahoo! searches, see http://searchenginewatch.com/webmasters. To drive additional traffic to my site, I’d buy pay-per-click ads from Google but be alert for click fraud (competitors constantly clicking on your ad so you owe Google a fortune and therefore go out of business.)
To identify bricks-and-mortar stores to sell to, I’d look up “pottery” in my local Yellow Pages. (Delivery costs are lower if I stay local. If I’m successful locally, I’ll later expand to more distant stores. ) To identify websites that sell pottery, I’d google “pottery.” In making deals with those pottery sites, I’d agree to drop ship; that is, the site would forward orders to me and I’d fulfill them.
I’d carefully monitor which sales channels and products were profitable, and starting two or three months later, drop the unproductive ones and increase my investment in the moneymakers.
1. Start by researching the competition. Googling, a few phone calls, and perhaps in-person visits, can yield plenty information fast and free.
2. Don't worry too much about others stealing your idea. Usually, the benefit of getting their reactions to your idea is worth the risk.
3. Don’t be deterred just because you find similar businesses. Adopt the best features of your competitors, perhaps adding your own. That will make your business concept best-in-class. If you implement and market it well, you’ll do fine.
4. Test your idea inexpensively.
5. You’ll probably end up making more money by not opening a bricks-and-mortar store, and instead, selling on EBay and on your own search-engine-optimized site, and wholesale to other sites and brick-and-mortar stores.
6. In two to three months, start culling your least successful products, and sales and marketing approaches, and increase your investment in the winners.
© Marty Nemko 2004-2017. Usage Rights