I recently answered this question on LinkedIN Answers, regarding how to take an idea from inception to monetisation.
We go through lots of new ideas regularly. Usually, for anything that seems promising we create a one page business plan to see if it holds together through some basic analysis. If it still looks good, then we market test it.
We don’t develop, or source or anything till we’ve got concrete market feedback – and maybe even a prospective buyer that someone would actually buy it. This forces us to be business led, and helps us avoid getting caught up in the excitement that surrounds new ideas. Be ready for a good number of ideas to crash & burn at this stage – HBR calls this failure by design.
I’d strongly recommend that any prospective entrepreneur start by answering the question “Who will buy this?”, and then get that person to commit to buying it (discuss a rate!) before they do anything else.Yes, this is hard. That’s why you need to do it first. Product design and development is usually the easy & fun part.
If you’re a developer, think of this as a weird beta test.
If you can’t sell it, don’t build it.