How to Generate Business Ideas

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An entrepreneur’s job is to serve it’s customers by solving a problem or delivering value. In a free market, entrepreneurs who don’t serve customers fail. To execute, an entrepreneur must identify customer demands and how to meet them. Many of the best startup ideas come from solving problems or inefficient processes that customers have an urgent need to solve. This post covers four strategies for gaining customer insights about problems and demands.

 

1. Scratch Your Own Itch

“Why is it so important to work on a problem you have? Among other things, it ensures the problem really exists. It sounds obvious to say you should only work on problems that exist. And yet by far the most common mistake startups make is to solve problems no one has.” – Paul Graham, Y-Combinator

 

What unmet needs do you have?, What challenges do you face throughout the day?, What product do you wish you had that doesn’t exist yet?, etc.

Make sure you’re not the only one that has that problem or wants that product. Do some customer development to see if they also have that problem or want that product.

 

2. Interview Customers

“The way to get startup ideas is not to try to think of startup ideas. It’s to look for problems…” – Paul Graham

 

a. Pick a customer segment

Based on your relationships, access, propensity to buy, passion, etc.

 

b. Ask them what their problems are

What’s the hardest part of your day?, What unmet needs do you have?, What product do you wish you had that doesn’t exist yet?, etc.

 

3. Meet Known Needs

“Great companies do 1+ of 3 things: Get you laid, get you paid, get you made” – Dave McClure, 500 Startups

Paid = Salesforce, banks, Airbnb

Made = Twitter, college

Laid = Cars, clothes, Tinder

Transportation = Uber

Surviving = Food

Save Time = Buffer, oDesk

Entertainment = Movies, video games

4. Do What’s Working

“At a time when so many internet entrepreneurs are running around Silicon Valley trying to do something no one else has ever done, [Evan] Williams believes that the real trick is to find something that’s tried and true” – Twitter co-founder via Wired

a. Second Mover Advantages

i. Validate customer demand – seeing that your competitor is selling products shows that there are people who want to buy it

ii. Learn about your competitor’s customer acquisition strategy – skip the experiments, know what channels work

iii. Observe product management and marketing – copywriting, conversion funnels, UX, etc.

 

b. Examples of Second Movers

Facebook, Simple (bank), 5 Hour Energy knockoffs, countless ecommerce companies, Social media consultants

 

What’s Next?

Next you will want to conduct some customer development interviews to validate that the startup idea is something that people actually want. You may also want to put up a landing page to start building an audience before you launch, to pre-sell your product, and/or to test whether you can acquire traffic effectively. Here’s the list of 9 startup ideas that I shared via the Startup College Newsletter if you want to steal one of those 😉

 

 

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