First of all, let’s clarify what we mean when I say I am going to find a business idea. My definition of a business idea is the pursuit of an activity for profit. I segregate business ideas into two categories: startup ideas and entrepreneurial ideas.
Entrepreneurial Ideas
Entrepreneurial ideas generally take us from one or more prior products or services in a category to n. E.g. you are going to create a new restaurant (restaurants already exist), or, you are going to start your own accounting firm (they already exist). It is important to identify whether you are pursuing a Zero to One business idea or a One to N business idea as your approach will be different. When pursuing an entrepreneurial idea (One to N) you are seeking to identify how to compete, to differentiate and grow, against current competition. How to take an existing solution to a problem and make it better. I often see entrepreneurs differentiate, for example, through:
- Relationships
- Geography
- Product customization
- Cost
- Speed
Startup Ideas
Startup ideas, on the other hand, typically introduce a new and highly scalable service or product to the market. Think Airbnb, ideas that take us from zero prior products or services in a category to one. They begin with a problem that has not been solved before and create a solution. The remainder of this post will discuss startup ideas (Zero to One). Another resource for those seeking more entrepreneurial idea might be a book called The Balanced Entrepreneur.
Ironically, good startup ideas aren’t ideas at all, they are solutions to problems. Therefore, I will refer to them as startup problems.
Noticing a Startup Problem
If you do not have a particular startup problem in mind, you might operate in the following loop — if you will — until one is identified.
The above process is largely based on Paul Graham’s How to Find Startup Ideas Essay. Mr. Graham qualifies a startup problem through a couple of questions which I have augmented below, ask yourself if:
- Solving the problem interesting to you?
- There is an identifiable group of users, that you can contact, that deeply needs the solution?
- The problem at the leading edge of a domain, i.e. are you finding a solution to autonomous driving or are you working on a better steering wheel?
- Do I have or can I feasibly learn the necessary technical capabilities to produce the solution?
If you can answer yes to these questions, you might have noticed a viable startup problem. If not, move on to the next post where I discuss preparing your mindset to notice a startup problem.
No ideas comming to mind? Read the next post in this series about preparing your mind to find a business idea.