People often ask me, “Is this a good business idea?” A good friend recently told me that he believes more businesses will be started in the next 20 years than all of history combined. There are a ton of great ideas but how do you select one idea and move it forward to create a profitable business?
There are typically three ways to start a new company: you have a technology, an idea, or a passion. In America today, User Innovation is a $20 Billion industry with over 50% of innovations coming from personal users. We were all given the gift of imagination. Einstein stated that imagination is even more important than knowledge. So the best place to start is to open up your imagination and ponder the possibilities.
You may come across a new technology in your field of expertise and begin to explore additional uses. You may have a passion but no specific idea or technology. If so, do some introspection using the concepts in Identity Driven Entrepreneurship to identity options for the best use of your knowledge, skills, connections, financial assets, and work experience.
When searching for a business idea, brainstorm to come up with a list of potential ideas. Brainstorming should include your areas of interest, your personal identity, skills sets and experience, assets and resources, interesting trends, emerging markets, and identified needs or gaps in products or services. If you don’t have an idea, can you identify a problem? Everyone has problems that need solving! Keep in mind that less than 5% of user innovators focus on making money with their innovation. The Internet abounds with open source user innovations waiting to be turned into a profitable business. Mountain bikes are a good example of an open source user innovation that was built into a business.
After the brainstorming process, filter your list down to 3-5 ideas that would be well suited to you and your team, they solve a real problem, and have a high market potential. If you are assessing ideas on your own versus in a team, the two basic filters you will use are fit and potential. Roughly assess each idea based on these two dimensions on a scale of 1-10 using the following questions, then assess which ideas score the highest. If assessing ideas in a team, review the questions together to validate team fit and potential.
- How passionate are you about this idea?
- How enthusiastic are you to solve this problem?
- Does this idea play to your strengths?
- Would you be solving a real problem or need?
- Are there enough people with this need in enough pain to make it worth solving?
- Would customers be willing to pay for a solution?
- Can you differentiate yourself against competitors?
- Is this idea scalable?
Keep in mind that many of the great ideas have been thought about before, and that entrepreneurial success comes down to focusing on the right customers and achieving product market fit. We will cover these concepts in future articles.
The next critical step is to take action on your idea, passion, or new technology. Wantrepreneurs talk about all their great ideas all day long, but never take action. Entrepreneurs have a PhD in GSD! (Get Stuff Done)
A few things to consider:
- Most companies start with a great idea and as they dig deeper into the launch process end up pivoting, some many times.
- If the idea you are working on isn’t working, be open to changing.
- In today’s world, it’s a level playing field for innovators and entrepreneurs. Inexperienced and experienced, young and old, college grads and high school dropouts, developed and developing countries, all have advantages and disadvantages.
- According to a recent study by Kauffman Foundation, the greatest number of startups are being launched by 55-64 year olds with less than a high school diploma.
4 Steps to Ideation – Finding a Great Business Idea
- Brainstorm a list of possible ideas around a new technology, a passion, an idea, or a problem that needs solving. Don’t forget to explore the wide range of open source User Innovations already on the Internet.
- Narrow down your list of possibilities to 3-5 ideas that align with your (and your team’s) areas of interest, personal identity, passion, resources, and skill set.
- Conduct the process of Catalytic Questioning to ask 100 questions about your idea. This will expand your perception about the idea, the problem, the market, and impact.
- Go beyond being a “wantrepreneur” and take action to move your idea forward through the Disciplined Entrepreneurship systematic process.
Find a great business idea in the Identity Driven Entrepreneurship online course.
Founder and CEO, Leadership Institute For Entrepreneurs