Where it all begins

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Where it all begins

 

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Imagination is a beautiful thing. It has the capacity to help you think outside the box and go beyond what others could not. Especially in business and entrepreneurship, imagination can lead you to unconceived ideas in your market: drone logistics, which can provide visual feedback of every point a company truck traverses during its supply-chain route or a space travel company based in Nepal that can take people to Mars or Jupiter. Or imagination can lead you to ideas that might have been thought up but have not been implemented. For example, you might want to cultivate marijuana in Nepal and export it to countries where marijuana is now legal, or start underwater safaris in Pokhara’s lakes.

 

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But everyone knows that these ideas cannot be executed in today’s Nepal. Even though you’ve imagined the most innovative ideas, you will often have to reject them before even thinking of moving on from the idea phase to the execution phase. These are ideas that sink because they are too far-fetched.

If that is the case, what makes for a good startup idea?

 

Genuine problem, genuine innovation

 

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Every entrepreneurial journey starts with a real-world problem, which can be either one you have faced yourself or one you have seen others face. Your startup idea needs to solve the problems that are yet to be solved or solve them in a new way. Sometimes, an entrepreneur is so focused on the solution that they forget about the core of the problem, a term called “marketing myopia” by Theodore Levitt in 1960. It seems quite obvious that a problem is something that cannot be separated from its solution, and yet “the most common mistake startups make is to solve problems no one has,” writes Paul Graham, co-founder of Y-Combinator, in his article Want to Start a Startup?

Innovation and problem-solving go hand in hand. “A good startup idea is one that solves a real world problem innovatively,” says Rupesh Krishna Shrestha, co-founder of Idea Studio Nepal and Asst Professor of Entrepreneurship and Marketing at Kathmandu University School of Management. Others might have already come up with a solution to the problem, which is why “innovative solution to a problem is very essential, and similarly, the solution has to be better than the available solutions in the market,” says Rupesh Krishna Shrestha. To come up with an innovative solution, adds Shrestha, an entrepreneur must have a problem-solving attitude to start with.

 

Value

 

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But even though you’ve come up with an innovative solution, there is a catch. “The solution needs to add value to people’s lives,” says Rupesh Krishna Shrestha. “If people don’t find value in what you do, your innovation is probably not needed.” Ideas have value when you are able to fulfill a need, such as supplying water to homes in Kathmandu Valley through tankers. Or you should be able to create the demand, such as has happened with the ostrich meat purveyors in Nepal. Unless the demand is strong, the value of your solution won’t be all that much.

There is also another catch. There must be an adequate number of people who find value in your startup. “If, say, not more than 10 people want to use your product, and they are not buying your product for a million dollars each, then it isn’t worth it,” says Anish Shrestha, co-founder of FawesomeApps. While 10 is still a small number, the general idea is that either there should be at least some value to people in large numbers, or there must be large value to an enough number of people.

Without sustainable business model, it’s a wasted effort from the start. It has to be a business. If it cannot monetise, don't move on further with the idea.

 

The problem is yours

 

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The startup idea can only be good if you are passionate about the problem, and, thus, you should ask yourself: “Do I care about the problem?” If the answer is no, then you won’t be able to delve deep enough to clearly understand the problem, and “unless you know the heart of the problem, or if you are not passionate about it, the honeymoon period of your startup will be over before you know it,” says Anish Shrestha.

When you are able to internalise people’s problems, you will be able to understand the reasons behind their problems. “Once you understand your customers’ pain-points, then you are in a better position to solve the problem, which in turn provides you a better opportunity to come up with an innovative solution, which can lead to a good startup idea,” says Rupesh Krishna Shrestha.

 

Generate money

 

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A startup is a business, and the ultimate goal of a startup is to generate revenue. There are great startups that have filled the gaps in the market but still find it difficult to sustain themselves or to scale up. One of the reasons is that there might not exist revenue streams in the initial phase. While revenue models can be planned while executing the idea, not having plans to get inflows in the beginning will make it difficult to sustain the startup in most cases. Twitter’s story makes for one such example. Many experts claim that Twitter is finding it difficult to grow even though it has more than 300 million monthly active users because their revenue model was already broken when they started. Anish Shrestha says that a startup idea should have at least a single revenue-generation option. “Without sustainable business model, it’s a wasted effort from the start. It has to be a business. If it cannot monetise, don’t move on further with the idea,” adds Anish Shrestha.

“Once you understand your customers’ painpoints, then you are in a better position to solve the problem, which in turn provides you a better opportunity to come up with an innovative solution. This can lead to a good startup idea”

 

Feasibility

A good startup idea must also incorporate resources that are available. From raw-materials and finance to manpower, startup creators must think up ways to procure resources and the idea must be testable for feasibility. Einstein famously said, “Logic can take you from A to B, but imagination will take you everywhere.” But in the business world, you must be able to wed imagination to logic. That said, your feasible, innovative idea still might not succeed in its first iteration. Be prepared for a continuous process of experimentation and evaluation of your idea to make your good idea even better. And for that, the next step is to test and validate your idea.

  *First published in M&S VMAG

 

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Guest Monday, 04 July 2022