What is a business idea?
A successful company always starts with a compelling business idea. It’s the first milestone in the process of founding a growth company. The characteristics of a promising business idea are:
- Fulfills a customer need – a problem is solved
- Clear focus
- Profitable in the long term
Each idea, no matter how brilliant, initially has no commercial value. A plausibility check gives more information about an idea’s chances in the marketplace and helps to check its feasibility and innovative content.
What is innovation?
The term innovative is usually applied to new products or services produced with conventional production methods and delivered to customers via conventional distribution channels. Innovation, however, can also refer to the entire business system. It is less obvious, but equally important (for example, FedEx revolutionized letter post through central sorting and 24-hour operation).
The development of new products and/or services usually focuses on improving “customer benefit”. Business system innovations, on the other hand, focus on lowering costs, and these gains can then, to some extent, be passed on to the customer in the form of lower prices.
It’s rare that innovations combine both dimensions, product and business system, to create an entirely new “industry.”
What defines a convincing business idea?
A business idea is addressed to an investor and, therefore, must be formulated with the investor’s perspective in mind. It’s neither an advertising brochure for an “ingenious” product nor a technical description. Rather, it is a decision support document that emphasizes three aspects:
Customer benefit – What is the customer benefit, what problem will be solved?
The key to marketing success is not superb products – it’s satisfied customers. Customers buy to satisfy a need, or to solve a problem, e.g., food and drink, something that makes work easier, to enhance their wellbeing or self-esteem, etc. The first principle of a successful business idea is, therefore, that it clearly describes the need that will be satisfied and in which form (product, service). In this context, marketing practitioners refer to a “Unique Selling Proposition”.
Market – What is the market?
A business idea only has commercial value when the “market” accepts it. The second principle of a successful business idea, therefore, is that it shows how large the market is for the product or service offered, for which target group(s) it is meant and how it differentiates itself from the competition.
Revenue mechanism – How is the money to be earned?
A business must be profitable long term. The third principle of a successful business idea is, therefore, that it shows how much money can be earned with it and how the money will be earned.
- A checklist regarding the content and form of a business idea and further practical tools is available here
- The specifications for the video you need to upload in addition to your business idea is available on the >>venture>> audience award page
- Other useful documents are available in the download section
- Not sure which competition to choose? Check out our decision aid