How attractive and competitive is your business idea?
We have the privilege of being the implementers for the City of Cape Town’s #Youthstart CT competition. The official launch is this Thursday evening and training begins in earnest on Saturday and will run for 16 sessions until mid -June.
In the run up to the launch, the entries were screened for suitability. In some cases the entrants were as far afield as Soweto, so distance made this nonviable.
Yet the City of Cape Town had to screen through >160 entrants to select the top 100 to enter the competition.
The question was what criteria to use as it needed to be fair with the parameters of the entrance. These criteria included uniqueness; scalability and effort. (There were 5 criteria all in all)
When you consider how ideas are evaluated by investors, what criteria do you think they look at when “screening” your idea?
I have just started reading a book by a South African Entrepreneur, “The Entrepreneurial Adventure”. In it he suggest a matrix to map the attractiveness of your business idea.
He suggests that the Y axis is one around the Venture or Concept attractiveness and that the X axis is one around the Competitive advantage or the Entrepreneurial team
Each of the two are further divided into 4 sub areas as follows:-
Concept attractiveness Competitive Advantage
Market size Skills
Market growth Resources
Known customer need Passion/Energy
Each of these areas is assessed out of 10 to get a total out of 80.
The investor is looking for an idea where both the concept attractiveness and competitive advantage are high. Similar ideas within the same Industry can also be compared as well.
He gives three examples of related ideas.(This aligns with an existing market and a resilient jockey/team)
- Web design and hosting 36/80
- Internet Café 37/80
- A search Engine Optimisation business 53/80
Although the search engine business scored highest overall; the Web design had the highest score for the team.
Thus if they went ahead with the SOE business idea, they would need to be mindful about boosting the skills, resources and network of the entrepreneurial team to improve the competitive advantage.
If they went ahead with the Web design and hosting idea, they would need to consider ways to access a bigger market and improve the business model to set themselves apart within their market.
To the young people/students reading this email, if you are grappling with evaluating your own idea and would like to test it through this matrix, please send us an email request and we will revert.
Your idea could be the next successful venture!
Building strong businesses led by resilient entrepreneurs.