Principle 3: Eat, Pray, Ideate
How can I generate and test good business ideas?
Why is this principle important?
Have ideas that excite you and turn them into small realities as quickly as you can. Ideas are on their own are worth nothing. Don’t put too much emphasis on the idea. The idea matters, but the execution matters much more. What’s more, the execution of your original idea will likely change dozens of times as you build.
What should you focus on at this stage?
- Learn new techniques for generating viable ideas.
- Explore ways of building on top of or combining existing business ideas.
- Experiment with creating multiple versions of the same idea.
- Build on your past experiences and future ingredients to generate ideas that are viable for you.
Generate good ideas
Indulge your curiosity
Good ideas often come from the unique combination of two seemingly unrelated things. The more you engage with different walks of life, the more you put yourself in a position to cleverly combine different sources of inspiration.
Examine existing business models. Understand what tools are at your disposal today. You will only be able to understand what is possible for you to build once you get your head around different tactics and resources. You don’t know what you don’t know. Devour as much information as you can about startups and the tools powering them and you’ll have much more of a sense of what is possible for you.
Focus on making something people want. Great businesses either reduce pain or frustration in people’s lives and/or bring joy and make them better.
Make sure you are solving a problem that people really have, rather than a problem that you wish they have.
Borrow other people’s ideas
The caveat here is that just because the Tinder interface works for dating, doesn’t mean it is going to work for jobs, personal trainers, restaurants, etc, etc. Just because Airbnb works for accommodation, doesn’t mean it is going to work for dogs, boats, motorbikes, cars, etc. Similarly, there is a big difference between a great idea and a great idea that you are the right person to build.
Ideas that get revenue early
Get to first revenue as quickly as possible. It’s tempting to delay ‘selling’ but this often kills the idea off. There are lots of startup ideas where the monetisation strategy relies on scale/growth or a complicated invention – delaying the moment when the business can generate revenue.
Go tried and tested on the business model
To stand out in a competitive marketplace it is imperative that you innovate on your product, service and brand. However, when it comes to business models… go tried and tested. There are lots of established ways of making money that work. You don’t have to invent a new one – building the rest of your business is hard enough as it is!
Nice business model examples include:
B2B software businesses– Especially where the software solves a specific pain-point that you know enough organisations share and where it can either remove steps in a process, replace an entire process or slot into an existing workflow to provide efficiencies.
Community, events and education businesses – People will always want to gather, they’ll always want to belong and they’ll always want to learn. The questions for you are: Can you build something compelling enough for enough people to want to be a part of? Can you stick at it long enough to create enough momentum to engage people? Can you produce experiences or content that is good enough for people to pay for and spread the word about?
Subscription businesses – Can you produce a physical product or an information product that is compelling, desirable and useful enough for people to want to pay for it regularly?
Consulting businesses – Businesses have always paid other businesses for specific areas of expertise. As work continues to move away from traditional forms of employment, more and more firms will engage a mobile workforce of partner organisations and individual contractors to perform specific bits of work for them.
Find the rising tides
“I skate to where the puck is going to be, not where it has been.” – Wayne Gretzky.
Start your business in a sector with a rising tide. What areas of the economy are booming? Go with trends, not against them.
The best way to have good ideas is to have lots of bad ones. See James Altucher – How to Become an Ideas Machine.
Remember ideas change as you build
You might start with a consulting business, which develops into an information business, which develops into an events business, which develops into a franchise business, which develops into a software business. The central idea might still be the same at the end of this process – i.e. the thing you are trying to change or improve in the world – but you will have gone through many different iterations.
Choose ideas that suit you
Explore your niches and networks
What walks of life do you have a strong understanding of? Where do you have unfair advantages? Who trusts you? Who do you have access to? These are all areas where it makes sense for you to start a business.
Define your good idea criteria
One good shorthand for assessing good business ideas is: Frustration, Conviction, Time, Skills. What frustrates you about the world? This could be many things – go broad. Of these frustrations, which ones might you have enough conviction to actually do something about them? Then filter for the ones where you have skills that mean you actually could build a valuable solution. And finally, assess those where the time that it would likely take to build the solution is feasible and realistic for you.
The more you care about something, the more likely you are to work your socks off to make it a success. Getting clear on what matters to you will greatly influence the decisions you make about your entrepreneurial journey.
Keep it simple
If you can’t explain it in a sentence, the chances are you’re not going to be able to build something that people will “get” and repeatedly use either. If your model requires different parties undertaking different behaviour in order for it to work, beware. Double-sided marketplaces are hard.
Avoid emotional attachment
Obsess about the problem that you’re solving but please, please, please don’t get emotionally attached to your plan for a solution.
Join The Tribe Forum for Q&A on the Idea Generation principle.
- How do I make sure I’m making something people really want?
- How do I know if this is the right idea for me?
- How do I properly develop an idea?
- How do I know when to switch idea?
- How do I map out the hypotheses in my idea?
Have a question that hasn’t been answered yet?
Jump into the forum and ask away (just click “New Topic” in the top-right of the screen. Write your question as the Topic title, with your context / explanation as the Description).
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