No one has ever said it is easy being an entrepreneur. If it was easy, there would be a whole lot more of us. However, I can safely assume that entrepreneurs wouldn’t have it any other way. The challenge of turning an idea into an actual startup is exciting and motivates us during those hectic times.
But, how do you know which startup ideas you should pursue in the first place? Here are seven techniques to get you started on the right track.
1. Come Up With Ideas
“The way to get startup ideas is not to try to think of startup ideas. It’s to look for problems, preferably problems you have yourself,” suggests famed investor and founder of Y-Combinator Paul Graham.
“The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing. Microsoft, Apple, Yahoo, Google, and Facebook all began this way,” Graham adds.
While Graham provides sound advice, how can you come up with these startup ideas in the first place?
The first thing that you can do is to keep a list of things that “suck.” You know, the daily inconveniences that get under your skin. How do you think ideas like Uber or Lyft began? Waiting around trying to a hail a cab isn’t convenient and can be stressful when you have to be somewhere be a certain time. The startups of Uber and Lyft solved that problem.
Another way to find an idea is look at your bills each month. While setting up your budget, the light bulb might go off and you’ll have an idea on how to cut down the amount you’re spending. Or, you may even come up with a better way to do monthly tasks like sending out invoices.
2. Gather Idea Research
After you’ve compiled some ideas and settled on an idea that resonates the most with you, you’ll need to conduct research to determine whether or not the idea is worth getting excited about.
Entrepreneur and author Justin Mares recommends that you first ask the following three questions;
- Could I create something more valuable than what currently exists?
- If yes, could I reach people to make them aware of my superior product/service?
- Assuming things go well, could I make enough money to run an interesting business?
To answer those question, you’ll have to research;
- The competition. Do a quick Google search and find out which companies are doing the same thing you are thinking about. If you can’t find any business in this space, then there may not be a market for your idea. If there are a business or two doing this same thing, see what they’re doing and how you can do things differently or better.
- Distribution. How will you reach your customers? You can find out the best way to find and reach customers by examining how much traffic your competitors get, as well as where the traffic originates and what sites link to them. Will this strategy work for you? If so, you’re on the right track. If not, look for alternatives like partnerships or creating viral content.
- Market. Finally, find out how big your market is by researching the finances of the most popular companies in your industry, along with searching for predictions, like whether or not the market is expected to grow.
3. Is Your Idea Durable and Timeless?
“Durability is knowing whether or not your product will be around for a long time or if it will fizzle out quickly” writes Dr. Sean Wise, professor of entrepreneurship at the Ted Rogers School of Management in Toronto, Canada. “Is your product something that we need or is it something that is more of a fad and will disappear once it has run it’s course?”
Steve Blank, author of The Startup Owners Manual, adds, “Friendship, dating, sex, art, entertainment, communication, confession, networking, gambling, religion – would our hearts still beat and would our lungs still breathe without them? Of course. But these are things that make us human. They are hard-wired into our psyche. We’ve been doing them for ten’s of thousands of years.”
Facebook, for example, is successful and durable because it “ takes our need for friendship and attempts to recreate that connection on-line.”
Besides durability, Dr. Wise reminds us that timelessness also needs to be considered. “Timeliness refers to whether the market is ready for your product, writes Dr. Wise. “An example of this is electric cars. Electric cars have been around for over 100 years, but the market was not ready until recently.”
4. Tackle a Small Market
“Most people tell you to address a large market. But what you really want is a small market today that will be big tomorrow,” suggests Greg McAdoo, partner at Sequoia Capital. “If it’s too big now the incumbents will come in too early and crush you; if it’s too small tomorrow then you’ll never build anything of enduring value. So go for a small market today where something is changing to make it a big market tomorrow.”
McAdoo uses GitHub as an example, in “which is serving the software development market, but is well positioned to expand into other large markets like developer recruiting, PaaS, analytics, content management and more.”
5. Follow the 10x Rule
“A company should start when they have a technology that’s 10X better than their closest competitor,” says PayPal co-founder and author of Zero to One Peter Thiel.
To determine this, you can ask two important questions;
- Is this 10X better than what is out there?
- Is it different or new enough that people will notice and buy?
You can also look at where you stand in terms of customers, users, or units of product. For example, Amazon was able to provide 10X more books than bookstores because it was online; Google’s search engine provides 10X better results; and Uber makes it 10X easier than hailing a cab.
6. Run an Adwords Campaign
This is a fairly inexpensive and easy experiment to determine whether you should pursue your startup idea or not.
First, invest $100 in a Google AdWords campaign that highlights the features of your product or service and problem that it solves. Then, create a landing page informing customers that your product will launch and ask them to provide their email address.
After running the ads for a couple of weeks, answer these questions;
- Is Google giving you enough impressions?
- Are people clicking on the ads?
- Is anyone leaving their email address?
If answered yes to all three, then you’re all set. If not, Yoav Vilner, CEO of Ranky, writes, that you tweak “the keywords, copy and landing page and trying again. If you’re still not getting positive results, well then, maybe it’s time to rethink your idea.”
7. Get Out and Talk to People
Entrepreneurs have a tendency to sometimes live in a bubble where in their mind, “ the idea and concept work perfectly.” Unfortunately, that’s not a reality.
Dr. Colleen Robb, Associate Professor of Entrepreneurship at California State, Chico, reminds us that, “talking to potential customers is ESSENTIAL.”
Dr. Robb uses the Segway as an example where there was a great technology behind the product, but its founders “simply assumed the market would buy it.” The team “didn’t ask potential customers about problems, price points, alternative solutions, etc. They simply assumed their technology was awesome (which it is) and that people would buy it. ”
“As entrepreneurs, it is essential to get outside your bubbles and talk to real customers,” Dr. Robb adds. “ If you are apprehensive about talking about your solution, ask potential customers about their problems.”
