You must be having number of ideas day & night in your mind. Some of them get out of your mind quickly, some remain to bug you. These ideas require exit either in the form of a true business idea or just another idea. In either way, if it is bugging then it must have something in it and deserves the fair chance of being “a problem solver” , “life savior” or the next “ big business idea”. But the question is how do you know it is the best idea to build a business?
No matter how clearly you are thinking or seeing your idea but until it is on paper or documented, it can vanish. So make a note of the idea. It need not be very long but should be clear & crisp enough to be understood by another person or investor. Note that this is the just outline and not complete business plan. You can always work on those lengthy documents & calculation but for now, just outline would be sufficient.
Every idea makes a number of assumptions which is ok at this stage. These assumptions may be who all will be surly buying your product / service or considering currency & GDP would be same as of now or even may be how you will get that technology in your hand but before going further you need to validate these assumptions. Your investors will surly seek an explanation for this assumption & their validity. You can test them by the survey, meeting people & cross check them with industry experts but once you validate your assumption, you can be confident enough to face VC.
There is no dearth of ideas but the only idea which makes business sense is going to stay & funded. Any investor is investing, seeing future scope & growth of company/idea which can give a better ROI so it is important to check if people are ready to pay for that information, service or product. Being your own idea or maybe you have felt it thousand times but if people out there are no willing to pay for this, it won’t be a viable business idea and of course not an ideal choice for the investor.
Even though you prove that you have some people who are ready to pay either immediately or in future but numbers are important as any business which cannot be scaled up, would not be ideal for an investor. It would be better not to pitch such ideas and if you really believe in it, you can bootstrap your idea but for investor, scaling is must & VCs are interested in getting better ROI which can only be achieved by scaling business.
It is not a good idea to reach VCs with a business plan or pitch presentation which says that you will arrange all sources after getting funds. This will show a credit hunger or highly money dependent business. This also won’t establish you in a good position as you are clearly showing or saying that no matter how good idea it is, it can only be realized with funding that is there in VCs hand. You should have arranged many resources or plan to have those resources even though in small scale but that shows your zeal or hunger for execution and your great trust on your idea. You will be in the better position also when VC sees that it is the great idea and if he doesn’t fund this now, the team will continue this idea and slowly & gradually scale it up.
It is very interesting if you can make a prototype, a model which will show the insight of an idea. In many cases where it is not possible you can still draw few images or showcase it on paper but having prototype enhance the trust of Investor. Ideas on the web, app or small model made up of 3D printer can do wonders.
Take next logical step of making proper Pitching Presentation, making the financial summary, seeking VCs & presenting them once you are confident that your idea is worth of pursuing on the basis of above checklist.
In many cases after going through above checklist, many ideas get failed, which is good in a way that you are able to identify that in early stages without giving too much time or spending too much on it. But don’t give up and continue giving a shot to your ideas and get one winning idea which could change the way we live in this world.