The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future by Chris Guillebeau Page A
Authors: Chris Guillebeau
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the better decision to get back to work on my core market instead of spending time with one disgruntled customer who had already received a refund.
The Possibilities List and the Decision-Making Matrix
As you learn more about your customers and what they want, you may find yourself overwhelmed with ideas. What should you do when you have more ideas than time to pursue them? Two things: First, make sure you’re capturing all the ideas and writing them down, since you might want them later; second, find a way to evaluate competing ideas. Creating a “possibilities list” helps you retain ideas for when you have more time to implement them.
Most of the time, however,
having
an idea isn’t a problem for entrepreneurs. † Once you begin to think of opportunities, you’ll probably end up with no shortage of ideas written on napkins, scrawled in notebooks, and floating around in your head. Theproblem is evaluating which projects are worth pursuing, and then deciding between different ideas. Sometimes you may know intuitively what the best move is. In those cases, you should proceed without hesitation. Other times, though, you’ll feel conflicted. What should you do?
The decision-making matrix will help you evaluate a range of projects and separate the winners from the “maybe laters.” Putting something off doesn’t mean you’ll never do it, but prioritization will help you get started on what makes the most impact. First of all, keep in mind the most basic questions of any successful microbusiness:
• Does the project produce an obvious product or service?
• Do you know people who will want to buy it? (Or do you know where to find them?)
• Do you have a way to get paid?
Those questions form a simple baseline evaluation. If you don’t have a clear yes on one of them, go back to the drawing board. Let’s assume, however, that you can answer yes to all of them but know you can’t pursue five big projects at one time. In that case, you’ll need some method of evaluation. Here’s one option: the decision-making matrix.
In this matrix, you’ll list your ideas in the left-hand column and then score them on a scale of 1 to 5, with 5 being the highest. Granted, the scoring will be subjective, but since we’re looking for trends, it’s OK to estimate. Score your ideas according to these criteria:
Impact : Overall, how much of an impact will this project make on your business and customers?
Effort : How much time and work will it take to create the project? (In this case, a lower score indicates more effort, so choose 1 for a project that requires a ton of work and 5 for a project that requires almost no work.)
Profitability : Relative to the other ideas, how much money will the project bring in?
Vision : How close of a fit is this project with your overall mission and vision?
Rank each item on a scale of 1 to 5 and then add them up in the right-hand column. Remember, you’re looking for trends. If you have to cut one project, cut the lowest one; if you can only take on one project, proceed with the highest one.
Here’s an example from my own business, when I was deciding which business projects to pursue in the second half of 2011:
When you don’t know where to start and have a bunch of ideas, this exercise can help. In my case, the live workshops would have a big impact on the people who attended them (or so I hoped) but not on anyone else. They would require a great deal of prep time and energy and wouldn’t be very profitable. Therefore, I put them on hold.
The decision-making matrix also helps you see the strengths and weaknesses of your ideas. I liked the idea of small live workshops until I realized they would require a great deal of work for little reward and impact. That was a big weakness! On the other hand, a project like the webinar represented a middle ground: I didn’t expect the workload to be overwhelming, and I expected it to deliver above-average
The Possibilities List and the Decision-Making Matrix
As you learn more about your customers and what they want, you may find yourself overwhelmed with ideas. What should you do when you have more ideas than time to pursue them? Two things: First, make sure you’re capturing all the ideas and writing them down, since you might want them later; second, find a way to evaluate competing ideas. Creating a “possibilities list” helps you retain ideas for when you have more time to implement them.
Most of the time, however,
having
an idea isn’t a problem for entrepreneurs. † Once you begin to think of opportunities, you’ll probably end up with no shortage of ideas written on napkins, scrawled in notebooks, and floating around in your head. Theproblem is evaluating which projects are worth pursuing, and then deciding between different ideas. Sometimes you may know intuitively what the best move is. In those cases, you should proceed without hesitation. Other times, though, you’ll feel conflicted. What should you do?
The decision-making matrix will help you evaluate a range of projects and separate the winners from the “maybe laters.” Putting something off doesn’t mean you’ll never do it, but prioritization will help you get started on what makes the most impact. First of all, keep in mind the most basic questions of any successful microbusiness:
• Does the project produce an obvious product or service?
• Do you know people who will want to buy it? (Or do you know where to find them?)
• Do you have a way to get paid?
Those questions form a simple baseline evaluation. If you don’t have a clear yes on one of them, go back to the drawing board. Let’s assume, however, that you can answer yes to all of them but know you can’t pursue five big projects at one time. In that case, you’ll need some method of evaluation. Here’s one option: the decision-making matrix.
In this matrix, you’ll list your ideas in the left-hand column and then score them on a scale of 1 to 5, with 5 being the highest. Granted, the scoring will be subjective, but since we’re looking for trends, it’s OK to estimate. Score your ideas according to these criteria:
Impact : Overall, how much of an impact will this project make on your business and customers?
Effort : How much time and work will it take to create the project? (In this case, a lower score indicates more effort, so choose 1 for a project that requires a ton of work and 5 for a project that requires almost no work.)
Profitability : Relative to the other ideas, how much money will the project bring in?
Vision : How close of a fit is this project with your overall mission and vision?
Rank each item on a scale of 1 to 5 and then add them up in the right-hand column. Remember, you’re looking for trends. If you have to cut one project, cut the lowest one; if you can only take on one project, proceed with the highest one.
Here’s an example from my own business, when I was deciding which business projects to pursue in the second half of 2011:
When you don’t know where to start and have a bunch of ideas, this exercise can help. In my case, the live workshops would have a big impact on the people who attended them (or so I hoped) but not on anyone else. They would require a great deal of prep time and energy and wouldn’t be very profitable. Therefore, I put them on hold.
The decision-making matrix also helps you see the strengths and weaknesses of your ideas. I liked the idea of small live workshops until I realized they would require a great deal of work for little reward and impact. That was a big weakness! On the other hand, a project like the webinar represented a middle ground: I didn’t expect the workload to be overwhelming, and I expected it to deliver above-average
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