Entrepreneurship, Second Edition

3.2. Is Your Idea an Opportunity?

While the idea-generation process helps you shape your idea so that it is clearer and more robust, it is only part of the process. The difference between venture success and failure is a function of whether your idea is truly an opportunity. Before quitting your job and investing your own resources (as well as those of your family and friends), spend some time studying the viability of your idea. There are five major areas you need to fully understand prior to your launch: (1) customers, (2) competitors, (3) suppliers and vendors, (4) the government, and (5) the broader global environment (see Figure 3.2). We'll discuss each of these areas in turn.

3.2.1. The Customer

Who is your customer? This broad question, the first you must answer, can be problematic. For instance, you might be tempted to think, if you're hoping to open a restaurant, that anyone who would want to eat in a restaurant is your customer: in other words, just about everyone in the world except for the few hundred hermits spread out across the country. But you need to narrow down your customer base so that you can optimize the features most important to your customer. So a better question is, "Who is your core customer?" Understanding who your primary customer is lets you better direct your efforts and resources to reach that customer. You can further refine your definition.

Starting with your initial definition, break your customers down into three categories: (1) primary target ...