Good business ideas come from a thoughtful process unique to your situation and your goals. So before you start scribbling ideas on paper, spend a few minutes answering the following questions and thinking about why you want to start a business and the type of business you want to create:
- Does your business need to be cash flow positive quickly?
- Will it have a social responsibility component?
- Are you in a position to sacrifice short term revenue and profit for longer term growth?
- Do you have access to start-up funding or will you rely on “sweat equity?”
- Are you willing to work with co-founders?
- Are you willing to hire employees?
There are no right answers to these questions and there is not a one size fits all definition for what it means to have a successful business. Your definition should be a byproduct of your values and goals, not the expectations of other people. Being honest about what you want is critical before you decide what business idea to pursue.
Find a pain point
As Bill Clinton is famous for saying, “I feel your pain.” And that’s exactly what you need to find, someone who has pain or a problem. But the trick is to find customer pain in an area where you are a subject matter expert.
So where are you a subject matter expert? A few places to start are topics related to your major, your hobbies, your jobs or internships, and your experiences as a customer. You should be able to make a long list of problems and potential solutions from these areas.
With your list in hand, revisit the type of business you want to create. Do the solutions you listed align with your goals? If they don’t, cross them off and move on.
Do some research
Now it’s time to find out how potential customers view competitive solutions, and I would suggest you start with Google. For each of the search queries below, substitute [Keyword] with the name of a brand, a product, or a solution you are researching. For example, if your idea is to build an alternative blogging platform, you might want to use “Wordpress” in the queries.
- “[keyword] sucks”
- “hate [keyword]”
- “alternatives to [keyword]”
Click on search results that look interesting, and also take a look at some alternate queries listed at the bottom of the Google search page as show below:
Another suggestion is to search on general question and answer sites like Quora or in more specific online communities and forums related to your idea.
And lastly, go talk to and interview real people – as Steve Blank says, “Get out of the building.”
Like your customers
Have you ever been given this advice? “Start a business focused on what you are passionate about.” Sounds like solid advice, but I think it ignores an important part of the equation. Yes, you need to care deeply about what matters to you, but you had better like the people who you are helping, your customers. And these customers need to be willing and able to pay if you want to stay in business.
Let me illustrate: John is a graduate of a prestigious law school. He is passionate about the law and the intellectual challenge, and he loves to compete and win in court. After a short stint working for the district attorney, John starts his own law firm as a criminal defense attorney. For the first year, the business is going well. John is winning cases, winning the respect of his peers, and building a business.
Unfortunately there are problems, and all of them are centered on John’s customers. 30% are delinquent in paying their bills, and on one occasion, after losing a case, a client threatened to harm John. While John loves having a law firm he comes to the conclusion he isn’t as excited about helping people who are accused, and in many cases guilty, of criminal behavior. John decides to pivot and focus on civil cases involving people who have been injured while at work.
Find a link between your passion and people you genuinely care about!
Don’t shun small ideas
Starting with a small idea, one that moves your forward toward a bigger opportunity is a great strategy, and it is the thesis for the book Little Bets by Peter Sims:
“Rather than believing they have to start with a big idea or plan a whole project out in advance, trying to foresee the final outcome, they make a methodical series of little bets about what might be a good direction, learning critical information from lots of little failures and from small but significant wins that allow them to find unexpected avenues and arrive at extraordinary outcomes.”
Let’s say you want to create a web-based platform for scalable peer-to-peer tutoring. This is a pretty big idea and vision, but how about breaking the problem down into a series of “little bets,” each of which would move you toward your ultimate goal? For example:
- Step One: Create a one-on-one tutoring service on your campus.
- Step Two: Offer a reduced rate multi-person in person model.
- Step Three: Extend the multi-person model to offer remote tutoring via Google Hangouts (use existing technology).
- Step Four: Grow this business by recruiting additional tutors.
- Step Five: Add scheduling, membership, and billing features.
Execution matters more than ideas
As good as your idea may be, it will not matter if you aren’t willing to work hard. This is true regardless of who you are and what you have accomplished. In another example from Little Bets, Sims tells a compelling story of how comedian Chris Rock approaches a brand new project:
“In gearing up for his latest global tour, he made between forty and fifty appearances at a small comedy club…. In sets that run around forty-five minutes, most of the jokes fall flat. His early performances can be painful to watch…. For a full routine, Rock tries hundreds (if not thousands) of preliminary ideas, out of which only a handful will make the final cut… Rock deeply understands that ingenious ideas almost never spring into people’s minds fully formed; they emerge through a rigorous experimental discovery process.”
Too often people look for an easy path to business success. Trust me, it doesn’t exist. It is hard work and takes a long time to find your way. But now, with a filtered list of ideas, you are at a much better starting point.
photo credit: Matthew Yohe