The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question, “How do you come up with a new startup idea?” is written by Michael Maven is the founder of Carter & Kingsley.
It’s a common myth that passionate entrepreneurs build big businesses once an idea is born. Although it can happen that way, you’re much more likely to be successful if you purposely engineer the development of a strong startup idea.
Unfortunately, that takes a little more strategy than most people actually realize, but it can definitely be done very carefully and on purpose.
First of all, it’s important to remember that ideas are a dime a dozen, especially for those with entrepreneurial minds. Just because you have an idea, doesn’t mean it’s going to be successful.
Be very careful not to invent a metaphorical ‘musical mouse trap’ and become overly attached and passionate about it. Yes, it’s nice to hear music, but potential buyers with mice problems really only care about getting rid of mice. Just because your idea seems clever, doesn’t mean people will pay for it. It has to solve a real problem.
The next piece in the puzzle is also rarely mentioned. Successful startups don’t always begin with a successful idea. They start out with a theory and then carry out research to prove/disprove their theory. The aim is to research the market and eventually reconfigure the theory to end up at a solid idea they can build a business on.
Then you take that solution and scale it, and sell it over and over.
A successful startup idea is essentially a solution to a widely experienced problem. So pick a market and start getting in tune with it. Learn about the common problems and frustrations that people have in a market. Consumers often complain so it’s easy to look out for ideas like this.
Online forums, negative product reviews, opinions in the media, and comments on articles are all places to start looking for a common problem.
You might even read reviews that say ‘oh I wish this product had X’ or ‘it’s such a shame this product doesn’t do Y.’ If this is a common issue, it could indicate opportunity.
Also, find ways of getting to know your market and talking to them. Watch them use currently available products and learn what sort of common problems arise from using them. If you can spot a trend here, it could be worth investigating.
An example could be asking people, or observing them to learn what common problems they have when using a computer? Are there annoying time sucking tasks they keep repeating over and over that could be done by software? People will pay money for solutions that can save them time and effort.
Another way to develop a startup idea is to look into a space where you’re already knowledgeable, and look for common problems there.
Ideally you need to target problems that people already know they have. But if you are very in tune with a market, you can actually target an underlying problem that you can prove that people have, without them even being aware of it.
It’s an advanced approach to finding a product market fit, but as long as you have a systemised strategy to educate prospects on a specific problem they have, then you can sell them the solution.
As an example, when I started Carter & Kingsley, it was done after creating marketing solutions for our own network of sales websites first.
Carter & Kingsley’s business model was based on a realization that other startups (and most of the business community) didn’t know how to maximise the number of paying customers they acquired at a profit. As a result, they were willing to pay for customised high-quality strategies, delivered quickly via technology we created, in order to grow their revenue.
A lower risk way to develop a startup idea is to provide value alongside a product/service that is already seeing high growth.
For example, they say the people who made the most money during the gold rush were the sellers of maps and shovels. Well, recently smartphones were the new gold rush, and millions of dollars have been made by selling specifically constructed phone cases, licensing brand names for phone accessories and even billion dollar apps. All of these took advantage of the huge explosion in smartphone sales.
The strategy was also simple – see what’s growing and provide a related item that buyers will also need.
There are many other things to consider, such as how big you want to grow, how hard you want to work and the size of the market you can serve.
For example, selling fun things to consumers via a low competition market can make you a millionaire. But selling solutions that help people run their businesses and even generate revenue can be much more competitive but make you a billionaire (think Microsoft (MSFT), Google (GOOG), Apple (AAPL) etc).
In the end, ideas are everywhere, but a good idea alone won’t take you anywhere. You still need to be careful to take time to develop the idea into a foundation for a business, find a solid product market fit and then build a strong team to successfully execute on the idea.
