Turning your idea into a profitable business — The JZ 3 Step

Intro

Twenty years of starting, scaling and selling businesses taught me one thing: the idea was never the problem.

I have watched good people burn a year and their savings building something nobody wanted. Not because they were lazy — because they went straight to building. Building feels like progress. It isn't.

So I built a system. Three steps, two gates. Every business I have owned or advised has gone through it.

Step 1 — Stress Test

Before a dollar is spent, the idea faces three tests.

Is there a market? Real numbers, not a feeling. How big, in which country, and what did that category actually sell last year.

Is the product — or the person — good enough? For a product: materials, durability, the one thing it does better. For a person-led business: can they hold a camera, a room, a conversation.

What kills this? Who already sells it cheaper. What happens in a bad year. Would it survive another COVID.

Fail any one of the three and it stops there. That sounds harsh. It is the cheapest lesson you will ever buy: the cost of finding out is a conversation, not a company.

"There are no facts inside your building, so get outside."

— Steve Blank, The Startup Owner's Manual, 2012

Case in point. In March 2008 Drew Houston had working code for Dropbox but nothing he could reliably demonstrate. Instead of building for another year, he posted a three-minute screencast showing how it was meant to work. His beta waiting list went from 5,000 people to 75,000 overnight. He tested the demand before he finished the product.

Step 2 — Development

Now you build. Design, samples, photography, content, the website, the brand.

But you build only what Step 1 told you to build. Every extra feature is money spent ahead of evidence.

This is the expensive stage, and that is exactly why it sits behind a gate instead of in front of one.

"There is surely nothing quite so useless as doing with great efficiency what should not be done at all."

— Peter Drucker, Harvard Business Review, May 1963

Step 3 — Launch, twice

3A is the soft launch. Small spend, honest feedback, first sales. The last cheap chance to change your mind.

3B is the official launch — fully funded, and usually where the capital comes in. By then you are not asking anyone to back an idea. You are showing them three steps you have already completed.

"If you're not embarrassed by the first version of your product, you've launched too late."

— Reid Hoffman, 2017

The line that matters

That is the whole model. Most people fail because they start at Step 2.

Next: scaling a business is not opening more stores and hiring more staff →