“An idea that is developed and put into action is more important than an idea that exists only as an idea.”

–Buddha

We all have ideas… They come out of nowhere: in the shower, while driving, over coffee, reading newspapers… But, without taking the time to develop your ideas, they are nothing but a thought, a blink in time.

In this blog, I’ll share my 5-step process of taking an idea and transforming it into a business concept blueprint. The goal of this exercise is to engage your thinking muscles. Here is a quick overview of the steps.

1. Dive into your problem space to refine your vision
2. Chisel out your opportunity and state your mission
3. Map out your product/service concept and strategy
4. Explore the profit potential
5. Write down your next steps and action plans

Step 1 – Dive into your problem space to refine your vision

Tim Hurson (Think Better: An Innovator’s Guide to Productive Thinking) emphasizes the importance of using divergent, creative thinking to make long lists and then using convergent, critical thinking to make choices.

“You have to get the first third ideas out of your head to make room for the second third and third third ideas to come.”
– Tim Hurson, Think Better: An Innovator’s Guide to Productive Thinking

As Tim points out, pushing for third third ideas help us break out of our learned patterns and explore a new wave of thinking. Using his set of questions, I further explore my problem space and identify potential opportunities.

1. What is the itch? Why change is needed?
2. What is the impact? Why it is important?
3. What is the information? What do I know about the causes and how can I learn more?
4. Who is involved? Who are affected and influenced by it?
5. What is my vision? What do I see as the future if this itch was resolved?

These questions are targeted to focus your thinking to understand and choose a problem area that you feel passionately about with a vision for a better future. For each sub-step, complete your brainstorming activity by reviewing your lists, then clustering similar themes and concepts together. Finally, choose the most important clusters you want to work on. And then, move on to the next sub-step in the process using your choices from the previous sub-step.

At the end, you will have a set of potential vision statements for your ideal target future. Using Tim’s I3 (Influence, Importance, Imagination) method, you can further evaluate each of the potential target futures.

• Influence — can I control and/or influence the target future? If the vision is outside of my control and influence circle, it might be futile to work on it.
• Importance — am I energized by the potential of solving this problem? If it is something I don’t care about, it will be hard to get excited day after day to work on it, too.
• Imagination — does the problem require creative thinking to solve? If exact solutions already exist, it may not be worthwhile to put in effort.

After your evaluation, select the 3-5 most compelling vision statements that meet all the I3 criteria. Review and choose one (or a combination) ideal target future you want to work on. At this point, it is important to restate this vision statement so it is energizing and motivating for you. Vision describes your desired future in clear terms, providing focus to your mission. Otherwise if you don’t know where you are going, anywhere will do.

“We started with a vision of a computer on every desk and in every home… Every day, we’re finding new ways for technology to enhance and enrich people’s lives. We’re really just getting started.”

– Bill Gates

Now that you have your vision and ideal future, you are ready to move on to the next step.

Step 2 – Chisel out your opportunity and state your mission

While the vision is all about our ideal future state, mission is the purpose of existence. It answers the question of what we do and why this organization was formed. When we achieve our mission, we bring our vision, our dreams, to reality.

Identifying that key question to focus your resources in order to create your ideal future is a good way to get to your mission statement. Again, I use Tim’s HMW (how might we) or HMI (how might I) exploration processes to list out various burning questions as part of my brainstorming process. As with previous step, by clustering, clarifying and then choosing, I identify the key opportunity that I want to work on and solve.

• “Google’s mission is to organize the world’s information and make it universally accessible and useful.”
• “At Microsoft, our mission and values are to help people and businesses throughout the world realize their full potential.”

This is also a good time to outline what success means to you. Your success criteria could be a list of financial, strategic, constraint-based as well as value and brand related items.

• Capture X% market share within Y months.
• Achieve positive cash flow within Y months.
• Have X positive product reviews in trade journals within Y months of introduction date.
• Proof of concept within Y months.
• Don’t alienate existing customers with new pricing model.
• Use sustainable business strategy and green manufacturing.

With my vision, mission, key opportunity area and success criteria defined, I am ready to capture my product/service concept and strategy.

Step 3 – Map out your product/service concept and strategy

You can continue with your brainstorming approach or you can add a little more creative zing to your thought process using other creative methods such as from Creativity Today by Igor Byttebier and Ramon Vullings; Thinkertoys: A Handbook of Creative-Thinking Techniques (2nd Edition) by Michael Michalko; The Innovator’s Toolkit: 50+ Techniques for Predictable and Sustainable Organic Growth by David Silverstein, Philip Samuel and Neil DeCarlo; and many others. Here are some of my favorites:

• Identify existing presuppositions and eliminate or reverse them. If existing solutions are complex, how would you go about simplifying them? If they are boring, how would you make them more engaging?
• List out your superheroes and their attributes, and imagine how they would go about approaching your problem.
• List out key objects in the system and use personal analogy to explore solutions to problems. If you were to improve collaboration among virtual teams, how would a document feel in that system? Lonely, confused, static, out-of-date? How would you go about changing that?

You may come up with several potential approaches for your product/service concept. That is great! Evaluate each of these ideas against your success criteria as well as set of key attributes that is important to your product/service.

Any important attributes and factors you identified during your brainstorming in step 1 can be used to develop your preliminary strategy canvas (Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant). As W. Chan Kim and Renée Mauborgne highlight, strategy canvas enables organizations to understand the current state of the market by mapping out key factors the industry is currently competing on as well as consciously deciding what value the organization plans to give the customers and differentiate its offerings. As this is a preliminary stage, instead of mapping out specific competitors, draw what you know from the industry and others for the initial map. You can find more information strategy canvas here.

At this point, you have a rough idea of your product/service, its competitive differentiation and perceived benefits and value. The next step is to analyze the profit potential.

Step 4 – Explore profit potential

Again, this is an exploration process without doing any in-depth market research study. The goal is to roughly identify set factors and metrics to achieve profitability.

• What would be your startup costs? How about your burn rate?
• What would be your pricing strategy? What would you expect as a per-customer profit margin?
• How many do you need to sell to make a living?
• What would you need to support your customer base?

“Too often we measure everything and understand nothing. The three most important things you need to measure in a business are customer satisfaction, employee satisfaction, and cash flow. If you’re growing customer satisfaction, your global market share is sure to grow, too. Employee satisfaction gets you productivity, quality, pride, and creativity. And cash flow is the pulse — the key vital sign of a company.”
– Jack Welch

You might end up with different product/service concepts with varying go-to-market strategies. Using cash curve analysis (Payback: Reaping the Rewards of Innovation), evaluate your revenue and cost projections. For insight into cash curve analysis, check out Reaping The Rewards Of Innovation in InformationWeek. Make sure to capture your assumptions which would influence profitability, such as first to market, achieving de-facto standard, etc.

As you are evaluating revenue/cost potential, be sure to utilize the customer life-cycle to explore potential dynamics from customer acquisition all the way through support and disposal. Innovation life-cycle is another tool for guesstimating revenue/cost projections from development through decline phase.

Step 5 – Write down your next steps and action plans

This process was meant as a starting point for your business plan. If you are interested in taking your idea further, make sure to capture any next steps and action plans using SMART (Smart, Measurable, Attainable, Realistic, and Timely) goals.

Putting it all together

You may decide at this point that you do not wish to follow up on your idea. Either way, I am hopeful that you found this process to be valuable. If you are looking for other sources of information, please check out my bookshelf.

Technorati Tags: business plan, developing ideas

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Creativity, Invention & Knowledge: Foundation for Innovation

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