I come across many people that want to start a business of their own, but have trouble finding the right startup idea. Although in some cases I suspect the phrase: “I am an entrepreneur waiting for a good idea to come along” actually means “I like the safety of my job, I have my mortgage, so I’d rather stay on the safe side”. But for those that actually seek startup ideas to execute we have some suggestions that might make the search a bit more structured.
Where do good startup ideas come from?
Steven Johnson wrote an interesting book about “Where good ideas come from”. Many wannabe entrepreneurs still have the feeling that their idea will spark at a moment of great insight. Sitting in the bathtub, having a beer in the bar or even sitting in a park. Johnson and many innovation researchers have shown that this just isn’t true. Good startup ideas that lead to innovations take time to incubate and mingle with other ideas. Connecting ideas and people is helpful, since combinations of ideas in many cases lead to innovation. Therefore the process of generating and articulating startup ideas is a matter of hard work. Of course some creativity is needed as well, but ideas for innovation can be obtained in a planned and structured way.
Where to look for startup ideas?
Where to start if you have no clue? Let’s give some direction that might help your search:
- Bird in the hand: Start with you, with the ‘bird in your hand’ as Saras Sarasvathy calls it in effectuation theory. Start from the resources that are at your disposal. These can be either tangible resources, like facilities or equipment. Or, in most cases the resources at the start are intangible, like your experience, competencies and (social) network. Think of ideas that are within reach from this perspective. Where is an advantage that you as a person have. Starting off with these ideas will limit the risk you take directing your Startup towards success.
- Trend crossovers: Within the overlap of two emerging trends interesting things happen. Be a trendwatcher and see where interesting things might come together that can lead to new problems or solutions. The rise of mobile technology combined with changes in healthcare have given rise to many Startup ideas in e-Health. Additionally changes in legislation and digital services provide collisions of trends all the time. Watch them and learn what opportunities can arise from them. Live in the future and then build what is missing.
- Problems encountered: ‘The way to think of Startup ideas is not to think of Startup ideas’, is a great phrase Paul Graham used: ‘It’s to look for problems, preferably problems you have yourself’. Drew Houston’s idea for Dropbox came from his problem forgetting his USB stick. You also encounter various problems everyday in business or personal life that could need a solution. If you don’t face this, talk to family, friends or customers to find out what problems they run into in your chosen business domain. We have found amazing things doing problem research and observing customers. This is a great source for finding new Startup ideas and also for validating and fine tuning them. At StarterSquad we turned our own problems in managing our delivery and community into a Startup called ‘Capacitor’. This approach gives you a good understanding of what needs to be build in order to offer a solution.
- Idea generation: You can also use techniques to generate new ideas. It is important not to think up randomly, but notice possible Startup ideas in the real world. Many creative techniques are available to help you or your team come up with new ideas, regardless of the fact if they are worth pursuing. There is an interesting post by James Altucher about “How to become an idea machine”. He speaks about developing the idea muscle and gives some practical tips on how to generate ideas. But, always have a real problem as the foundation for the idea!
Hopefully you will be able to find a great Startup idea in one of these directions.
How to test your startup idea?
According to Paul Graham the best ideas have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing. Once you have found an idea that meets these criteria, your first step is taken. But more needs to be done to determine if the idea is worthwhile pursuing. There are five critical steps to validate your Startup idea:
- Problem interviews: When you pick your idea you need to deepen your understanding of it. This can be done through problem interviews. This approach is as part of the Customer Discovery process.
- Value Proposition Design: Based upon your understanding of the problem or need you have to carefully craft an offer for the customer. This is your value proposition. Engineering this proposition is quite a job in itself. A good and practical book has been written about this.
- Testing with a Validation Website: When you have articulated your value proposition you can already start validating through online channels via a validation website. This is possible for both online and offline products & services.
- Building an MVP: The Minimum Viable Product is the product that requires minimum investment to proove that the idea packaged as a product or service has viability. There are many ways to build an MVP, and at StarterSquad we build some every month. Determining what should be in the product and what experiments you will conduct is critical.
- Start Selling: Actual sales is the ultimate validation of your business idea. When a first group of launching customers as early adopters are willing to pay, you have a strong indicator of a potentially successful business.
After you have found a great idea, tested it and got it validated, you need to execute as soon as possible. There are always reasons for not starting, but you just need to do it. Following the approach outlined above you will be able to get things moving.