There are a lot of reasons why businesses fail and we’re all aware of the most common ones like insufficient capital, poorly designed business models, lack of research and planning, etc. So for an executive in charge of business planning or an investor that is thinking of writing a check the questions is: How do we systematically evaluate a potential new business idea and improve our chances of acquiring customers and capital?
A large and attractive market isn’t enough. Is the industry structurally attractive? Is your business model economically viable? What investment does the business require and can it sustain estimated operating cash flow cycles. Can the team execute on the Critical Success Factors? Is the team connected up, down, and across the value chain?
Don’t get fooled (or fired) by just a large and attractive market. Go back to the fundamentals (all of them) and feel confident that the business you’re building is based on a winning concept. Take a customer focused, fact based approach that considers the market, the industry, and the team domains on both the micro and macro levels.
eBoost Consulting takes a systematic approach adapted from the 7 Domain Framework developed by John Mullins of London Business School lore. Our process carefully goes through each domain answering questions like: What is the Total Addressable Market (TAM)? How influential are each of the five forces in the industry and what ways can we counter/mitigate these influences? What is the required investment size considering likely operating cash flow cycles? Is this business feasible and attractive? If not, what changes need to take place? Armed with sharp business acumen and a Marketing As Strategy mentality our consultants conduct the following:
Clients’ business ideas often have an online component that can benefit from a deep understanding of digital media and relevant players. This service is meant for:
In the worst case scenario, our clients realize their proposed or up-and-running venture is a bad idea and save hundreds of thousands of dollars, years of wasted time, and a well crafted reputation. In the best case scenario they show renewed conviction and passion that they are really on to something and are already half way done with a fundamentally sound business plan!
Because of the nature of the service the details of our clients’ businesses are kept more hush hush than others.
The client came to eBoost Consulting with an idea that had attracted a few early investors. Teamed up with the potential investor they tasked us with determining the feasibility of the proposed venture. The market was broadly defined as HR departments and the industry fell under the background check services category. The potential monetary and time investment was significant and the viability of the business was uncertain.
While substitute products existed, the proposed business idea would be a first in the industry. While this was exciting to see there were no customers or working business models to validate the idea and no legal precedence to confirm the legality of the service. Would customers actually buy at an acceptable price and could the company proceed without the fear of being sued or shut down?
A consultant with experience selling to the market headed up the team. The team formed an initial hypothesis of the idea from the information given by the client and set out to test it using the 7 domain framework. Consultants interviewed potential customers, suppliers, partners, media, and legal counsel. Surveys were conducted with each client team member being interviewed separately. Research was conducted, financial models developed, and competitive intelligence was collected.
The company did in fact have a large market growing at 40% YOY! The industry proposed challenges of sustaining a competitive advantage as well-funded new entrants with established distribution channels loomed in the background. The team faced the brutal truth that it was missing a key player that could execute on its most important Critical Success Factor: Understanding what the technology can and can’t do now and in the future. Because of the process the client found a more attractive segment to target, a prioritized list of product features from potential clients that it may not have found until many years and dollars later into the business, and a recommended pre-launch social media strategy. The firm is currently executing the strategy in stealth mode as it acquires the necessary talent.
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Less than 20 websites around the world have a perfect Google PageRank score of 10 including the World Wide Web Consortium (www.w3.org), the Whitehouse (www.whitehouse.gov), and Facebook (www.facebook.com).