You’ve soaked up all the entrepreneurship classes in business school and studied the careers of such innovative chief executives as Steve Jobs and Jeff Bezos. You have The Innovator’s Dilemma practically memorized.
Now ask yourself if you know the key differences between fluffy ideas and weightier opportunities. Innovators should know the answer: Opportunities can be analyzed and presented in concrete terms, while ideas remain at the conceptual level. If you can’t tell the difference, your idea will probably get little traction and never evolve into an opportunity.
Dreaming up ideas is the fun part of innovation, but identifying opportunities—and then shaping and capturing them—is where the real work begins. Ideas that can evolve into real opportunities meet certain criteria. Before you’ve e-mailed a single angel investor, put your concept through this test. It’s not yet a plan if it doesn’t meet these criteria:
• It’s durable.
Does your idea create value over time, and can it withstand assaults from competitors? One-hit wonders can make bursts of money, but that’s not a strategy for long-term viability.
• It’s sustainable.
Are there willpower and resources internally to see it through various stages? Some great ideas won’t show a profit for two to three years because of startup and development costs. Does your organization have the ability to sustain the idea through fruition?
• It’s investment-grade.
Your idea competes with other investment opportunities vying for limited resources. Can you defend it against other uses of time and resources within your company? If not, the resources should go to something else.
• Your projections are trustworthy
Are your numbers believable? You can’t be certain at this stage, but you should have confidence in your projected stats.
I have seen a lot of potentially great opportunities flop because the people behind them showed either little passion for their ideas or had not done the work necessary to determine that the ideas had the right characteristics. Tip: Your opportunity will be much more compelling if you can point out what can go wrong—and you have a backup plan.
Differentiating an idea from an opportunity is a process that all innovation must go through to determine its potential and probability of success. These guidelines will help you better understand your idea and help you do a better job explaining it to others.