Time allocation and risk management

When exploring opportunities for our ventures how often do we evaluate risks?

Often times when we come up with a new idea, we focus on validating it. As we talk to people, research and estimate the potential market, and brainstorm product/service functionality, we zoom in on how viable the idea may seem. If we are lucky enough to get funding upfront, we then focus on defending our idea. Yet, many of us may not question the key assumptions our business is dependent on.

Rather than focusing on delivering a superior product, we should ask ourselves “what are the biggest risks our venture faces?” Before even beginning to work on your prototype and waisting our time and money, we should be addressing these “deal-killer” risks up front in the cheapest way possible. That is not to say we can eliminate risk, but we can reduce it.

At the same time, your company may face other risks, which you need to understand how to prioritize. If we spend all our time worrying about the risks that may arise, we may not get to the product/service development phase. Sometimes it is better to understand the risks and how we may respond without investing the time and money. In essence, this could help us be more agile and responsive if the risks arise.

Last, I hinted above that risk management is more important than quality. Do not get me wrong, I am not saying quality is not important. Rather I believe building a superior product is a step-by-step process which requires the engagement of your audience. One way to minimize risk and to ensure you are delivering a product/service that is in demand, it to build a prototype and allow your customers to play with it. A prototype does not mean a full-version of your product. Forget perfection; build the absolute minimum you need to test on your audience. You then take feedback, refine the product, then test again and again. Through this process you focus on the needs of your customer, on reducing risks and on asking the right questions. In addition, you need to be open to pivoting and changing direction when need be. You cannot allow sunk costs or emotional attachments to a project prevent you from redirecting your strategy. Adapt quickly, use your limited resources (time & capital) wisely and move on while you still can.

 

 

Creating Value vs Adding Value?

When brainstorming new ventures I always ask myself: “does my idea create value or add value?”

To “add value” means to add on to an already existing product or service. You are not creating a new technology, but rather are redesigning the look and capabilities of a product. For example, when Dell or Mac releases a new laptop, they generally are building on an old model.

To “create value” means to create something new that consumers have not seen before. For instance, the launch of the ipad was new to consumers.

Some entrepreneurs prefer to build on already existing products, since they tend to already be proven (less risky) and to have a following. Others, however, looks for a gap in a market and imagine designing new product offerings that are unlike those currently on the market. The danger with the latter is that the demand is not proven and the ventures carry more risk. There may also be structural or psychological barriers meanings new ventures may not be backwards compatible with old technologies/infrastructures/systems or they may challenge norms, standards or cultural stereotypes.

Another thing to keep in mind is economic benefits. Adding value tends to be associated with lower risks thus lower returns. Creating value, on the other hand, can be riskier and can take a longer period of time to get your product from the hands of innovators to early adopters to early majority (Diffusion of Innovations), but the returns can be much greater.

To read more about this topic, check out The Imagination Challenge by Alexander Manu or Diffusion of Innovations by Everett Rogers.

 

 

Here are a few other ideas…

2) An app that picks up your location and can tell you the nearest walkin clinics with expected wait times.

3) A pick-up nanny. Running late and can’t pick up your child from daycare or school. Call pick-up Nanny like you would calling a taxi.

4) Online tutors. Struggling with math, physics, english, etc? Pick a tutor online that specialized in a specific topic. You can chose to to a one-on-one tutorial or group tutorial.

5) Wish list App. Have a shopping list of things you would like to buy? Put it in your wish list app. Companies connected to the software will be able to send you promotions at locations near you.

IDEA Generation

If you do not already have an idea of your own, or perhaps, several then this is the first step to becoming an entrepreneur. Before going into business you have to understand what area of business you want to be in and what service or product you want to provide.

One way is to get ideas from your surrounding; think of cool products customers would like to have. Another way is to use foresight. Rather than looking at the wants of customers NOW, we use foresight to think of the desires of customers. We want to know what their actions are telling us about their needs of tomorrow.

So this blog is dedicated to idea generation. Here I will post random ideas for businesses that I thought of while going through my day to day. Fell free to critique, comment or to build on some of these ideas. Discretionary note: I have not researched these ideas so far, thus some of these ideas may have already been put into practice or are in the process of being implemented.

Ideas:

1) Digital doctor notes -image going to the doctor, who provides you with a digital subscription, which you can redeem via an online website. Having your online subscriptions connected to your insurance and online pharmacy means you could place your order before you even leave the doctors office.