How do I know if my business idea makes sense?

Testing the Desirability, Feasibility & Viability of your Business Model

Photo by İrfan Simsar on Unsplash

“Your objective is to find a big enough Market, that you can Reach, with customers who Need your product, that will pay a Price you can build a business around”

Here are 4 key elements of your business model to analyze:

1. Customer Pain Level

   Pick customer segments that need your product the most. The goal is to

   have one or more of your top three problems as must-haves for them.

2. Ease of Reach

   Building a path to customers is one of the harder aspects of building a

   successful product. If you have an easier path to one segment of customers

   over others, take that into consideration. It doesn’t guarantee you’ll find a

   problem worth solving or a viable business model, but it will get you out of

   building faster and speed up your learning.

3. Price

   What you can charge for your product is largely driven by the customer

   segment. Pick a customer segment that allows you to maximize on price.

   The more you can charge, the fewer customers you need to reach breakeven

   (assuming your gross margins don’t change).

4. Market Size

   Lastly, you need to pick customers that represent a big enough market, or

   are a stepping stone to a big enough market, that you can build a business

   around.

The content in this article was inspired by Ash Maurya’s book, Running Lean.

---