I’ve been thinking a lot lately about business and product ideas. Probably because I’ve spent a ton of time working on new ones for myself.  I wrote a post recently about how ideas are a dime a dozen. Then a few days ago I heard an episode of a podcast named Entrepreneur Myths in which the podcaster took exception to the concept that ideas aren’t worth anything. He made a valid point that a good idea is definitely worth something. I agree, but try and sell one and you’re probably going to be disappointed. As I said before, it’s the execution of a good idea that pays off.

The hard part isn’t coming up with ideas. I’ve got a friend who keeps all of his ideas in a spreadsheet. He’s literally got hundreds. In the last week, I’ve started filling a page with a good number of ideas myself. But what makes up a good idea? The criteria for a good business idea can be both general and personal. Here are a few.

General:
Your idea should fill a need. There are a lot of product and service ideas that are cool, but they’re a solution in search of a problem. Find a pain point for people and then solve their problem.

The idea must appeal to a sizable audience. There are a few products that you can get rich off of by selling just a handful. But for the rest of us, our products need to appeal to a large group. If I come up with a widget that solves a problem, but only 10 people have this problem, it’s not a good basis for a business.

Your idea must be worth paying (enough) for. Say you’re sick of Twitter’s fail whale and you decide there’s a need for a reliable Twitter-like service. But you decided to actually have a revenue model; you’re going to charge people $5 a month for it. It’s unlikely that you’ll succeed. Most people just aren’t willing to pay for what they can get free, even if it’s a bit more reliable. Or if you develop a new widget that truly solves a problem millions of people have, but the cost of development and production is $45 million and your marketing plan projects you can sell 5 million units, but only if you charge $2.50 each. Bad idea.

Personal:
Your idea should revolve around something you have an interest or passion about. This isn’t a hard-and-fast rule, but it’s a great idea. You’re going to be spending LOTS of time with this idea. Make it something that can hold your attention. I’d have a hard time doing a bank startup. It just doesn’t interest me.

It should be something you have (or can get) the money to start. I think a healthy fast food restaurant is a great business idea. Someone’s going to get rich on this idea some day. However, it won’t be me. The cost of startup is too steep for me to afford and I refuse to borrow the money.

You may have lots of great business ideas. That part is not nearly as hard as getting a few good business ideas that are right for you.

What are your criteria for a good business idea? What are your criteria for a good idea for you?

Recently, I’ve had several people pitch me what they term their “million dollar idea.” Of course, what they mean is their idea is so good that implementing it will make a million bucks. And, of course, being a startup guy, they’re hoping I’ll take the ball and run, make a million, and cut them in on their rightful share. It was their “million dollar idea”, wasn’t it?

The truth of the matter is, there are no million dollar ideas. I can’t think of a single idea I’ve ever heard that was a million dollar idea. There are big ideas, but that’s differnt. Ideas are actually a dime a dozen. Heck, they’re more like a penny for 1,000. Need a business idea? There are tons of websites offering them free. There are even sites like Half Bakery that poke fun at how silly most of the ideas are. There are NO million dollar ideas. There are, however, million dollar (and BILLION dollar) execution of ideas!

It’s how well you execute an idea that pays off (as I recently proved). A well executed bad idea will likely not succeed, but a well-executed big idea can make you (and lots of other people) rich. So, the next time you have a great business idea, remember it’s not worth a hill of beans until you actually do something with it.

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