Ask The Mompreneur: How To Turn An Idea Into A Business

By Jennie Wong
The Charlotte Observer.

This week’s “Ask the Mompreneur” features an interview with Alex Cowan, serial entrepreneur and author of “Starting a Tech Business.”

Cowan is the creator of the Venture Design entrepreneurial methodology. The interview has been edited for clarity and length.

QUESTION: Let’s say I have a great business idea on the proverbial back of a napkin. How can I get from there to a fully baked business model?

ANSWER: Great question; I think that’s what everyone wants to know. Most people spend too much time building things and executing like they’ve already got a product that will sell. With a new venture you don’t have that, so I always start by spending a lot of time talking to and observing the customer in as natural a setting as possible. My goal is to learn about their problems and habits and how they’re acting today. I never, ever “sell” at this point because the customer will usually say “yes” to a hypothetical product, even if they don’t really mean it.

If I believe I can create something that’s “better enough” than what they have today, I think about how I can validate that with a minimum of time and money, because even if I’ve done a great job getting to know the customer, there’s still a lot of risk. If there are 1,000 possible outcomes in the imaginary future where your product exists, only 250 of those scenarios are successful ones. In other words, there’s a 75 percent chance of failure.

It feels better to build the business like you’re going to be successful, but the reality is you’re much better off placing small bets. Dropbox may be the best story on this. They had a huge engineering task to really build the thing, so they made a fake demo and promoted it to see if anyone in their early market signed up. And only after that did they place a big bet on real product development. That was brilliant.

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