Do you want to start a business of your own but are not sure how to go about it? Numerous surveys show that the lack of a good idea is the number one reason holding back potential entrepreneurs. This article provides suggestions on how to develop and evaluate new business ideas. It will point you to activities that will increase your chances of coming up with an innovative, viable concept for a startup. If you already have a good idea, you can skip this article.
TABLE OF CONTENTS
- Learn the Industry
- Meet People and Ask Questions
- Take a Break
- Identify a Problem or Need
- Brainstorming — Not as Worthless as You May Think
- Put a Stake in The Ground
According to a recent Gallup poll, 61% of American workers want to fire their bosses, walk away from their jobs, and start their own companies. But for many of these employees, starting their own businesses will never be more than a dream. The failure to start their new businesses often has nothing to do with a lack of skills or motivation to run their own companies; instead, it is the difficulty in developing a feasible idea that stands between these would-be entrepreneurs and their new business. While a good business idea is not enough to guarantee success, attempting to start a business without one is a path to certain failure.
Coming up with a good startup idea takes patience and work. It requires that you actively seek information about an industry or problem, analyze the acquired information, ruminate at length to develop a novel perspective about the problems you have identified, engage with others to discover the flaws and merits of your thinking, and then take a commercial perspective to create a profitable business model for the product or service you have developed.
So, what can you do to identify good ideas for your new venture?
Activities that can increase the probability of a good startup idea
Learn the Industry
Although many potential entrepreneurs lack concrete ideas, most know the industry that interests them. Whether it is an industry where they have worked their entire careers or a new industry, understanding your target industry is an indispensable first step to building a successful startup.
Finding an unmet customer need in an industry is the key first step to a new business; your experience in the industry can help you identify such an opportunity. Learning as much as you can about recent developments within your industry can help trigger ideas. New demographic trends, regulations, technical innovations, scientific discoveries, and even market-wide setbacks in a specific industry can create the opportunity for a new business idea. To keep your finger on the pulse of a market, most industries have sector-focused websites, research journals, online forums, trade publications, and conferences focused on the business news. Spend your time researching, reading, and learning because the more you know about the industry, the higher the chance you will develop a good startup idea.
Meet People and Ask Questions
The simplest way to come up with an idea for a new business is to focus on what people want. Too many businesses fail because they try to create a new need, instead of focusing on solving one which already exists. By providing your customers with an easier, quicker, cheaper, or better solution for a problem, your startup will be more likely to succeed than one which does not already have a target market.
To understand the challenges people face, ask them. Meet people in your target market and get to know them. Ask meaningful questions about how they do business, what problems they face and how they use a product. Most people will happily share information with you, if they believe you are genuinely interested in learning more about them. Pay attention to what they tell you because their words are a goldmine of startup ideas. Keep in mind that people who are accustomed to working a certain way may not necessarily see the inefficiency or problems in the way they work. You may have to infer the problems from their narrative.
If you don’t know anybody in your target market, put yourself out there. Starting a new company requires entrepreneurs to act like extroverts and to take the initiative to reach out to people. Attend industry conferences and trade shows. Join a local industry group and go to a meetup. If you are reluctant to meet others face-to-face at the early stage of your startup, you can engage potential customers through websites and forums. The more people you interact with, the easier it is to identify common problems in your market. Such outreach to like-minded people is also a great way to meet potential co-founders.
Take a Break
Once you have an idea of the problems facing the participants in your target market, it is time to take a break. Relax and ruminate about other things. This is a necessary step on the path to developing a good idea. Research shows that the human mind is more likely to identify creative solutions to a problem when it is not consciously focusing on that problem.
The time away from actively thinking about your business will allow your mind to wander, organize the knowledge you have gained, and make connections with other experience you have. Believe that an insight will emerge but resist the urge to try to force one.
Identify a Problem or Need
Use the information you have gathered to identify a problem to be solved or a need that is unmet. In developing your ideas, it’s best to keep in mind a couple of rules of thumb.
First, to develop a business idea often the best place is to start is with something that you have experienced personally. If your understanding of a problem is deep and personal, you will develop a better solution. If you have a special skill or passion, that can become the seed for your business. Your unique solution to a personal pain-point or setback can also become the basis for a new business.
Second, almost all new business ideas are incremental improvements or a novel way of approaching a pre-existing business model. In the popular press, business ideas often are classified into two categories: an idea for something completely new or an idea for improving something that already exists. This is a false division as the category of genuinely new business ideas is vanishingly small. Even the most innovative and novel firms are offering improvements on old business models: Twitter improved text messaging, NetFlix improved movie rentals, iPhone improved cell-phones.
Once you have one idea, don’t stop there. Try to come up with at least three good ideas for the common problems of your target market before moving to the next stage – brainstorming.
Brainstorming — Not as Worthless as You May Think
For many people, “brainstorming” has negative connotations. The word conjures images of a middle-school English class or a poorly-run business meeting where hours were wasted.
However, brainstorming is an important part of the startup process and should not be neglected simply because of past bad experiences. Ralph Keeney, an emeritus professor at Duke’s Fuqua School of Business and author of Value-Focused Thinking: A Path to Creative Decision-Making, claims most brainstorming sessions fail because they are not focused enough. Keeney encourages limiting the focus of brainstorming to a single well-defined objective. The goal of brainstorming at this stage of a startup is to determine which of your new ideas would be the most feasible ones to pursue.
Following Keeney’s approach, you should handle your own startup idea brainstorming session by:
- Giving a list of the common problems the target market faces before the meeting, and allowing enough time for participants to review the problems.
- Presenting each problem to the group, along with your idea for solving the problem. Have participants suggest ways the idea solves the problem.
- Discussing ways the idea fails to solve the problem. At this point do not allow discussion of alternative ideas for solving the problem.
- Asking for alternative ways to solve the problem.
Repeat the process for each of your ideas. Keep detailed notes of everything that was said during the brainstorming session. It is a good idea to record the session to allow you to review everything. The brainstorming does not have to be conducted in a person-to-person meeting. It can also be done through emails, an online forum or other collaboration technologies. What is important is to share your ideas with others and have them critique those ideas. Platforms such as Quora can be used to effectively for this purpose.
Put a Stake in The Ground
Starting a new business venture is a thrilling but a long and arduous adventure. After brainstorming and considering the pros and cons of each of your ideas, determine if any still appeals to you. If you believe that you can build a viable business on it, choose the idea. It might have diverged dramatically from what you initially thought. That is fine so long as the process leads you to develop a good foundational idea for your business.
Once you have settled on the idea, it is time to put a stake in the ground. That means that you move on from the brainstorming phase to starting actual work on the various tasks that will transform your idea into a real business.
is a myth that a great business idea simply strikes a person. While the idea might appear to pop into your head, that serendipity will only occur if you have done the groundwork of investigation and reflection. Thus, the best way to develop of sound start-up idea is to:
- Find out everything you can about the industry where you want to pursue a startup
- Speak with as many target consumers as possible
- Identify a common problem among your target market
- Think of business ideas to solve the problem
- Brainstorm to uncover the strengths and weaknesses of your solution
- Settle on an idea
- Take the next steps towards launching your startup.
Once you have identified a potential business idea, read our article on Researching and Validating Business Idea that will guide you through the process of determining whether the idea is a viable one, before you launch your business.