The thought of a new idea can sometimes be so exciting that we tend to initiate the work on the prototype right away. It is very essential to understand that all ideas not necessarily lead into or turn out to be good opportunities. I came across this idea of creating a personal bill management solution (say e-Bill) that provides a platform to effectively manage the bills/statements consumers receive from the providers of utilities, credit cards, banking, mortgages, and other services. Let us evaluate this idea based on the required characteristics of a real business opportunity.
1. Create or add significant value to a customer or end user
Value is created when the benefits to the customer exceed the costs of product or service. The e-Bill idea offers great value to both the bill providers and the consumers. The bill providers are benefited from the cost savings in not printing the paper copies of the bills and statements. For consumers, the e-Bill solution provides a one-stop solution for managing and paying their personal bills and statements.
2. Fix a real problem in the market, something that is truly a market pain.
When analyzing at the customer survey I took for this idea, it turns out that about 52% of consumers do not have any concerns. But a promising 33% have some concerns about the existing solutions.
When looking at the following two responses, about 86% of consumers are interested in a new bill management solution and are ready to give it a try. About 38% of those are willing to pay an annual fee for it.
4. They have robust market, margin, and profitability characteristics that the entrepreneur can prove.
In a seven year financial projection, it shows that e-Bill solution attains one million customers in the fourth year of its operation. Also, the startup becomes profitable only in the fifth year.
5. The founders and management team have collective domain experience that matches the opportunity.
The two founders have three decades of collective experience in designing and managing software products. In order for an effective execution, the team needs an advisory board with expertise in operations, sales and marketing, and human resources.
By applying these characteristics to the e-Bill idea, I have arrived at the conclusion whether it is just an idea or a real opportunity. I will share it in a future blog post.
Spinelli, S., & Adams, R. (2012). New Venture Creation: Entrepreneurship for the 21st Century. Business and Economics.