Does Your Business Pass The PIS$ Test?

Does your business pass the PIS$ test? This was the question posed by an entrepreneur from MACRI (i.e. Malaysian Association of Creativity & Innovation) at the recent barcampKL when sharing about Malaysia’s Cradle Investment Programme.

So what is the PIS$ test? PIS$ is an acronym for the 4 key criteria used in evaluating a business.

P – The PROBLEM

The first question to ask when evaluating your business is,

What problem am I solving?

Don’t go and chase an idea. Start by looking for problems that people have. If a sufficient number of people have the problem then there is possibly a higher chance of making money by solving it for them.

Let’s look at a problem faced by the population of Botswana – the lack of access to electricity. Because of this lack, there is a problem in the recharging of mobile phone batteries.

I – The IDEA

The next questions to ask, after identifying the problem a group of potential customers face,

Do I actually have an idea on how to solve the problem?
Is my idea a good one to solve this particular problem?

In the case of the problem faced by the mobile phone users in Botswana, an entrepreneur could have generated two ideas:

1. Sell a power generator to mobile phone users so that the users will have a way of recharging their batteries.
2. Sell battery recharging services.

Generation and evaluation of ideas are important sub-steps. Evan Williams shares, in a blog post, how he evaluates his own ideas.