Make the Food, then Build the Restaurant

I have this little analogy that i like to tell people who are interested in starting a business.

Think of your business as a restaurant.  What you're telling me is that you want to take a piece of land at what you consider to be a good location, and build a restaurant.

I say, instead of building the restaurant, cook the food first, and let people eat it.  And if they like the food, then build the restaurant.

What I mean in practical terms is, test the market before you do anything else.  Especially with the internet, it's especially easy now to test the market.  Here are some examples:

1. A client wants to buy a house to rent it out, but he's not sure if he'll be able to rent it.  I say, put an ad up on CraigsList (or similar) as if you already have the house for rent, and see how many interested parties you get.  Then use that to gauge whether or not to buy the house.  You've spent just minutes of your time testing the market (see my related musings about the 80/20 rule below).
2. You want to build the next cool gizmo. I say, put a website up showing pictures of the gizmo and have an order form, then try marketing it to the people you think will want it, and try to get some pre-orders on the product.

So test, test, test, and don't be afraid to tell everyone who will listen about your idea.  Don't guard your idea because you're afraid that someone will copy it.  You ar so much better off getting feedback from anyone who will listen, because guaranteed, it will be many times better than if you try to figure the market out by yourself.  You might end up with 100% of the product/idea if you do it all yourself, but 100% of zero isn't much.