How to Find a Good Business Idea

Solve your own problems

Look to your own problems with life, tasks, work, etc. Observe your own patters of behavior when it comes to tackling these issues in your life. If you can solve your own problems, you can package it to sell to other people like you.   

Work within your subject matter expertise

If you go through with starting a new project, you’re going to have to become the expert. A head start will be handy.

Ask your friends and family for biased feedback

Unless they are subject matter experts and/or the target audience, filter their input.

Ask the target audience for unbiased feedback

Identify and locate your ideal customer, in the real world, and online. Ask them open-ended questions about the problem/solution paradigm. Your aim is to get to the core of the problem, as they experience it.

After you speak to 50 people, who fit your ideal customer profile, your perspective on the matter will inevitably change. This will take a moment, but by the time you're through, you should understand the problem in a far more nuanced way, having aggregated the experiences and perceptions of your target audience. 

You'll gain the necessary perspective to either put this one aside or begin the epic journey of building a solution.

Stress test the idea to learn if its good or not

Validate. Set up a hypothesis and try to break it. If it survives under duress, you’ll know you’re onto something.

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Photo by Bruno Scramgnon from Pexels.

The #1 Reason Startups Fail

It’s something I have witnessed first hand through my consulting experience, anecdotally by being in the startup ecosystem, and backed up with data from CB Insights (Crunch Base). It makes sense that this the biggest issue because it’s also the most overlooked part of starting a company. Don’t get me wrong, many nail it. But the problem is that the majority of would-be founders are oblivious to the real need for market validation. Testing is the answer.

Most startups fail due to “no market need”. Meaning not enough people are interested in your idea to begin with. See the full breakdown below.

It looks like a paradox at first: the audacity required to start a new company, paired with the humility to check your assumptions along the way. Most people just push their vision forward, without consulting anyone except maybe friends and family. Who although are well-meaning with their encouragement, are probably not subject matter experts in whatever realm their friend is looking to dive headfirst into. 

The reality is that you must build your new vision in concert with those who you hope to support - your audience. In business, we’re in the service of our customers. You need to, and should, make a healthy profit. But you won’t even get off to a good start unless you craft your offering to match your intended audience.

Feedback is the way we iterate to greatness. There’s a whole realm of Customer Development, which I equate to the Retention stage of the Pirate Metrics sales funnel. This retention stage might be the most important part of the customer journey because it’s where the dialogue between visionary and consumer takes place. Only together will they both make progress toward a truly viable solution. Win-win is the only way.

Through testing, we're able to validate our assumptions. It’s what one should do at the onset of any new business and during the initial phase of finding product-market fit. Realistically, during this early stage, you need to be spending 50% of your time on distribution efforts (listening to your customer) and 50% on product development (applying their feedback). Only once you find product-market fit can you relax this ratio to focus more on product development. But don’t ever completely cut off the conversation with your customers.