Lesson 7: Building On Your Business Idea

Building On Your Business Idea

Once you’ve decided what your business will be all about, it’s time to flesh it out a little more. This is where you start considering what your product or service will look like, who will buy it, and why they will be interested in it.

In this lesson, you will work on all aspects of your business idea, including your value proposition. We’ll also learn how to build solid financial projections so that you will have the resources that you need to be successful.

Developing Your Product Idea

Getting Started

Once you have a business idea in place, it’s time to put some serious thought into the product or service that you will be offering. (For simplicity, we will use the word “product” throughout this session, but the same concepts apply to service-based businesses.) For now, focus on two things: your minimum viable product (MVP) and your core product.

The MVP is your entry-level product (although other entry-level products may be developed later). It can be developed quickly, with minimum time and resources, and sold quickly. The core product will embody what your business is all about. Once you have these two elements developed and tested, you can start thinking about new product lines.

Problem Statement

The most important part of each product is identifying what problem it solves for the customer. Does it…

Create a fast, personalized coffee experience at home?

Make bedtime for children under five easier and faster?

Help working adults between 30 and 50 maintain a healthy lifestyle through diet and exercise?

Create a safer home environment for seniors?

Outlining your product’s purpose as a solution to a problem will help you evaluate whether or not you’re meeting your goals, particularly when identifying the target market and testing the product (which we will discuss in the next session).

Functional and Non-Functional Requirements

It’s also important to describe what the product will actually do. These requirements can be broken down into functional and non-functional requirements. Functional requirements describe characteristics that solve particular problems for users. Non-functional requirements describe the background operation of the product or service.

Requirements for a coffee maker might look like this:

Functional	Non-Functional
Starts up in eight seconds	Supports 120 and 240 volt plugs
Makes individual cups of coffee in 14 seconds	Heats water to 212°F
Sanitizes itself after each brewing cycle	Made out of carbon alloy

Features and Benefits

Next, let’s look at features and benefits. A feature describes what a product does; a benefit describes the emotional impact of the product. Let’s look at some features and benefits of our coffee maker example.

Features	Benefits
Makes individual cups of coffee	Create a personalized coffee experience every time
Starts up in eight seconds	Start your day right: by relaxing and enjoying a cup of coffee
Keeps itself clean with self-sanitizing mode	Let your coffee maker do the work for you
256 gluten-free, organic flavors currently available	Feel good about your coffee choices

User Stories

The final element in developing your product idea is user stories. This allows you to outline possible scenarios where users will use the product. User stories can help you clarify the product vision; identify features, benefits, and functional requirements; and recognize possible issues.

The basic formula for a user story is, “As a [user role], I want to [desired outcome] because [reason].” For example, Tom is a daily coffee drinker who wants to be able to make a good cup of coffee at home easily and cheaply.

If we dig deeper, we’ll see that Tom is a single dad with three children. A good cup of coffee is a necessity for him in the morning! However, his local café is pretty expensive. If he makes coffee at home, filling the coffee maker, grinding the beans, finding a filter, and setting up his coffee machine can be a real challenge while he’s trying to get his children ready. A one-touch coffee machine, with pre-filled, top-quality coffee pods, would make things a lot easier for him.

To develop good user stories, it’s important to consult with a wide variety of people, including your potential customers. The more user stories you create, the more likely it is that the product will actually help the customer solve their problem.