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setting your product apart from others – a core issue in marketing, as we will learn – and is
essential to the market success of your business concept. Try, whenever possible, to also
express the customer value in figures.
Marketing theory states that the customer value must be formulated into a unique selling
proposition, or USP. This means two things: First of all, your business concept must be
presented in a way that makes sense (selling proposition) to the customer. Many start-ups fail
because the customer does not understand the advantage of using the product or service and, as
a result, does not buy it. Secondly, your product must be unique. Customers shouldn't choose
just any solution that hits the market – they should choose yours. You must, therefore,
persuade them that your product offers a greater benefit or added value.
Only then will your customers give you an edge. In describing your business concept, you need
not present a fully formulated USP, but it should be more or less obvious to potential investors.
2. Market of adequate size
A business idea will have economic value only when it succeeds in the market. This second
principle of a successful idea demonstrates how big the market is for the product offered, which
target group(s) it is designed for, and to what degree it will differ from the competition.
A detailed analysis of the market is not yet necessary at this point. Estimates, derived from
verifiable basic data, will suffice. Sources could include official statistics, information from
associations, articles in trade journals, the trade press, and the Internet. It should be possible to
draw a reasonable conclusion about the size of the target market from this basic data. It is
sufficient for you to summarize the results of this investigation in your presentation of the
business idea.
The same is true for your target customers; you will only need a loose definition of who they
will be. Describe why your business idea will provide a special value to this group in particular,
and why this group is financially the most interesting to you.
You will always face competition – both direct, from companies that offer a similar product, and
indirect, from substitute products that can also fulfill the customer's need. A pasta
manufacturer competes not only with other pasta manufacturers, but also with manufacturers
of rice and potato products and bakeries and, more generally, with manufacturers of all other
food stuffs. Your business idea will need to demonstrate that you have understood who your
competitors are. Name them – and describe why and how you can take the lead with your
business idea.
3. Sufficient degree of innovation
Business ideas can be classified along two dimensions - products/services and business systems.
In each of these categories, you can develop something new or capitalize on something that
already exists. Simplified, a business system is a way of understanding how a product or
service is developed, manufactured, and marketed (Exhibit 6).
The term innovation is generally used in the context of new products, which are made with
conventional production methods and delivered to the customer through existing distribution