When you have multiple business ideas that you believe in, how do you choose which one to focus on?

It is common for many aspiring entrepreneurs to be excited with a number of ideas or concepts, and they may genuinely believe in the potential for each one of these ideas to be successful.

However, eventually you will have to make a choice and decide to focus on only one of these ideas to build your startup around. Here are a few thoughts on how to make this rather tough decision. Of course, your decision will be a combination of various factors, and often will require revisiting the parameters that you used for your decision making.

 

1) Personal passion is critical

Every startup will go through challenging times. If the startup is not in an area of your personal passion, you are less likely to fight your way through these tough times and are more likely to give up.

On the other hand, if the venture is in your area of personal passion and interest, even if the commercial success seems a distant away than you had originally planned, you probably would be driven enough to keep going.

However, the commercial potential of an idea can sometimes mislead you into believing that you are deeply interested in that domain. It is important therefore to evaluate what you are really, really, deeply and passionately interested in. Here’s how you can possible identify the areas of your interest. Leave the ideas aside, and think of what you would want to do in life if you had enough money and not have to work for a living. That will give you clues on what excites you the most an what your real areas of passion are.

 

2) Evaluate the business case for each idea

Unless you are considering doing a social impact venture, the point of doing a startup is to generate wealth. Thus, it is critical to evaluate the business case around each of your ideas and then take a view on what is likely to generate maximum wealth.

Consider factors like market potential, possibility of scale, what is required to scale – e.g. does the venture require proportionate scaling of resources & capital to scale or would it be possible to scale exponentially, what areas are most likely to receive VC investments, what domains are likely to see higher valuations, etc. i.e. consider all the factors and evaluate how much you would be worth n 10 years if each of these ideas were to succeed as you plan.  You are most likely to get a different figure for each one of your ideas, based on the business case for these concepts.

 

3) Evaluate the external environment for each idea

Things like ‘how important is the problem or how real is the opportunity’ that this concept is addressing, which of these ideas have less competition, which of these concepts address an immediate need and which of these concepts will require hard-selling of the value proposition to potential customers/consumers.

Also, evaluate which of these ideas can be implemented from where you live and which of these concepts may require you to relocate. Then decide on the basis of your personal circumstances and preferences.

Also, while many of these ideas may have a large market in the country where you live, the KEY markets for some of these concept may NOT be the country of your residence. Evaluate if some concepts will require you at some stage to relocate. And then decide on the basis of your personal circumstances and preferences.

 

4) Which of these ideas have an opportunity for you to be a dominant player

What skill sets & competencies and other resources do you have that will give you a higher chance of success in the venture?

While the potential may exist in all categories, some sectors may not be ‘startup friendly’. Evaluate if the some of these concepts are likely to see competition from existing large brands. E.g. “Can Google do this?”.

 

5) Evaluate if you ‘like doing’ what the venture will require you to do

Example: You may be passionate about healthcare. However, creating and managing a chain of clinics requires you to be keen on & good in on-ground & distributed environment operations management, which is different from the operations management required for an ideas about an online medical records platform.

6) Evaluate the risks

While you play for the upside of a venture, also evaluate what the downside is. Some concepts, if they fail, will mean closure of the business. While some concepts, even if they do not become run away successes, may be sustainable as a smaller venture than you originally planned. Evaluate your risk appetite and evaluate which concepts are more aligned to your personal situation.

Finally, after you evaluate all these aspects, you probably should let your intuition lead the decision for which idea to go with.

I will be keen to know more parameters that people may have used to evaluate ideas. Will update this post as I get more responses.

 

 

 

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

1 thought on “When you have multiple business ideas that you believe in, how do you choose which one to focus on?”

  1. These also swayed my choices every once in awhile…..

    The idea which most sounded doable within a reasonable time frame and capex outlay (given that most entrepreneurs are cash strapped and starved before that BIG flight!) So really, given all others were equal, the idea which I could get off the ground to fruition with minimum $ seemed most attractive for my mind to lay its grip…..

    Also sometimes the locale matters I thought, some ideas fly in the local geographic area where the venture is planned to be launched and the same idea might not be a great one taken to some other place (also plays out with your thought of relocation of the entrepreneur I guess) but sometimes relocating ideas to a different geography could make it more than a successful venture which ultimately goes to influence the choice of your idea when you are evaluating more than one to choose from

    Another factor that I thought also mattered was despite “All that you know and make effort to know” about the market, competition, feasibility, business case etc. of your idea, it also probably weighs to its advantage as to who you know and who you meet who probably has an interest in the domain that your idea lies in. It is more than a boon for an entrepreneur to be in the right place to meet the right investor, who is most likely looking for ideas in that domain……so where all else pans out equal between two or more ideas, the traction for one might just turn out to be so much more attractive where you happen to meet the right kind of investor whose interest and desire in that domain combines and adds strength to take your venture forward! (well of course these hits often don’t present themselves but if they do, I guess the choice of the entrepreneur being veered is all for good reason…..)

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