There’s scores and scores of great information out there for new entrepreneurs. Need help branding? There’s an article for that. Need help with building your website? There’s also an article for that. Need help deciding between an LLC and an S-Corp? Well…you get the idea. Despite the wealth of information out there, one area which is really lacking is content around helping budding entrepreneurs come up with their next business idea. That’s exactly why we’re here today – my goal is to give you some new things to consider, that will guide you to not only more business ideas, but better ones.
The last point is really important to consider – many entrepreneurs put blinders on once they decide on an idea. While there is some level of faith necessary in your new venture, you don’t want to spend a lot of time and money on a flawed idea. Even the greatest execution will be worthless on a poor idea with no market. On the contrary, if you read this article and develop the greatest idea ever, poor execution will render your great idea useless.
In Good to Great, Jim Collins states: “Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.” In other words, execution is everything. If you haven’t read this book, by the way, check it out – it’s on my list of 11 Books Every Entrepreneur Must Read.
With the understanding that you need both a good idea AND good execution – let’s get to brainstorming. This is the process I most recently used for one of my ventures. It initially seemed like a poor idea to many people – until AirBnB announced they were stepping into the same business in a press release which looked as if I had written it myself. If I hadn’t faltered on the execution piece (i.e: procrastinated), I’d probably be writing this from my beachfront home in Hawaii, instead of the suburbs in Florida (Note to self: Book another trip to Hawaii).
Look for Problems
At the root of most businesses is one simple goal: to solve a problem in some way. It can be a small problem – such as, you don’t have time to mow the grass – or, it could be a bigger problem. Just the other day I downloaded an app that allowed me to watch TV from my media server within my home, on my iPhone. It was $4.99 – which I do feel is a bit much for your typical app, but it solved a problem for me – I wasn’t able to watch my home media collection on my phone before.
On a bigger scale, services-focused businesses do this too. A customer might not have time to execute a project on their own, so they bring in a consultant. They might not have the operating overhead to hire a full-time IT guy, so they use a managed service. You get the idea.
So that’s great, and we agree that a really good way to think of business ideas is to solve a problem, but how do we find the problems? Here’s a few ideas:
- Read online reviews of..basically anything. Vacation rentals, Amazon product reviews, musical instruments, mechanics..you get the idea. These provide fantastic insight into what pain points are not being addressed with the current options.
- Observe. Take notes of problems you have in your daily life. Here’s a few of mine:
- I have a set of golf clubs that are expensive, but I rarely use.
- I keep losing a piece of paper with words that my kids are learning in school.
- I hate fighting for power outlets in the airport.
- Put yourself in other peoples’ shoes. This kind of goes along with ‘Observe’, but I thought it decided it’s own bullet point, because when you view things from someone else’s point of view, you’re broadening your view of the world which in turn, broadens your ability to find problems.
- Be a customer. What parts of the experience do you dislike?
As far as the problems I identified above? I thought of those in a minute. If you had an hour, or a day dedicated to finding problems, you could come up with a lot more. If you’re skeptical of how the ideas above become business ideas, try this for size:
- An Uber-like Golf club service that lets you rent clubs to local people (tourists, those without their own set?) – so your clubs are not just rusting, you’re actually monetizing them, and allowing someone else to golf without paying high rental fees that golf clubs charge.
- An App which stores all the words specific to the program the kids are in, so they can practice. Believe it or not, this didn’t exist, so I made an iOS app that solved it.
- The power outlet problem might be a little late to solve, but an option might have been a pay-to-use power bank leased to airports, or something along those lines (I don’t worry about that anymore, because I use an AmazonBasics portable charger).
The point is, focus on finding problems to start, then once you’ve made a list of problems – look for solutions.
Identify Neglected Industries
One of the best ways to think of a new business idea is to search for industries that have been neglected. Let me elaborate for a second. I define the phrase ‘neglected industry’ as an industry which has lagged in innovation significantly behind other industries. For example, for a long time, agriculture was a neglected industry. Now, there’s smart irrigation systems, and drones fertilizing fields based on crop content with pre-defined flight maps. But just think – if you were into drones a few years ago, and thought about the agriculture industry, you might have been able to connect the dots and offer something completely new to the industry.
The point is, make a list of industries that you feel are lacking innovation. If you’re not sure whether or not an industry is innovating at a significant pace, do some searching. Look for news articles, press releases, blogs, and products for sale. If you find very little of those, there’s a good chance you can bring something new to the table by repurposing technology or a product/service used in another industry.
Use What You Know
There’s a couple of ways to use what you know, and I think much too often, entrepreneurs focus on technical or functional knowledge, when they should be focusing on domain-specific knowledge as well.
Technical, or Functional knowledge (definitions vary) is specific knowledge on how to do something. To me, I define both of these phrases as knowing things such as: how to build an awesome excel spreadsheet, or how to repair a car, or how to build a website. See a trend? They’re all “how to…” items.
Domain-specific knowledge, on the other hand, is more broad. It’s not how you do something, but why. To put this into perspective, if you’re a mechanic, your technical knowledge is how you repair an alternator, but your domain-specific knowledge includes market trends you’re observing, such as more buyers preferring BMWs over Audi’s. Or, perhaps you understand the relationship between parts distributors and repair shops very well, and how that knowledge can be applied to another industry. Be a master of your domain.
Let’s be clear: both types of knowledge are very valuable. The point I’m making here, is to not miss the bigger picture and focus only on technical knowledge.
This conversation aside, how do you use what you know? The first, and easiest way – is to find problems, issues, challenges, or shortcomings with the way things are today. This is easy, because you should know a few areas pretty well. Maybe you’re well-versed at cooking. The next time you cook, you might notice that it’s a pain to measure meat temperatures on the grill without burning yourself – and thus the meat thermometer with long probe is born.
The second way to use what you know, is to apply your domain specific knowledge into an unrelated industry. Elon Musk is a fantastic example of this, as he reportedly reads multiple books per day, and typically in totally unrelated industries. He likes to connect the dots and find opportunity this way – so maybe you should, too.
Look at High Level Trends
The world is changing at an incredible rate. It’s really easy to think there isn’t opportunity for new innovation, because as the saying goes: “There’s an app for that.” But there’s great news! Innovation creates opportunity. You see, in a previous example, I mentioned drones out there fertilizing farmer’s fields. That opens for the door for new innovation: how do you control the drone? Are there apps for it? What if you began a company which offered a “managed fertilizer” service where you showed up a couple days a week, and flew drones that fertilized the farmers field for them – so they could spend more time doing other things, and not have to invest time in flying drones?
One tool I like to look for trends, is the Google Trends tool. Here’s a search I ran for the phrase “WordPress” from 2004 to current. Just imagine, if you had seen this trend in 2007, and began writing wordpress plugins, offering training and support for WordPress, etc- you could have developed a really solid niche.
If you haven’t used the Trends tool to help you in your search, I encourage you to check it out. I think it’s strength probably lies more in the product space – but I’ll let you be the judge.
Regardless of which tool you use (if any) – the point with trends is simple: sit back and take a birds eye view of the world into consideration. Think about trends you’re saying. What technologies are becoming popular? How are people using products in their daily lives? Try to spot the trend, and then consider the impacts that can be caused by those trends.
Execute Better Than The Other Guy (or Gal)
There’s a major issue that many entrepreneurs have, but don’t even realize. The issue? They think that if it exists, there’s no opportunity. This couldn’t be further from the truth. There’s plenty of awful products and services out there. Here’s a quick one I found on Amazon.
While I admittedly have no clue how an Automatic Roof De-Icer works, or who would need it (I live in Florida) – an average of 2.8/5 stars is horrible. If we’re drawing the line of “people like my product” at 4 and 5 star reviews, only 51% of people who bought this product were actually happy with it. There’s a 155 reviews, however, which isn’t easy to come by – so obviously people have a need, but this product isn’t satisfying it. Do you smell that?
Facebook wasn’t the first social media site. Firefox wasn’t the first browser. Google wasn’t the first search engine. Apple wasn’t the first to make a mp3 player. All of these success stories just did it better than the incumbents. If you’re in need of a business idea, start looking for bad products.
Use Hobbies for Ideas
What do you do for fun? It doesn’t matter what it is – just make a list. If you don’t have any hobbies, look at this list on Wikipedia. Once you have your list, start to think of ways you can monetize them. Here’s a few questions to ask yourself for each item in the list:
Can I get paid to perform this hobby as a service to someone else?
Can I get paid to teach this hobby to someone?
Are there any problems within this hobby that I can solve?
What can be better about this hobby?
Is there a way to apply this hobby to an existing business?
Once you’ve answered these questions for each item, you’ll have a better estimation of how viable these potential ideas are.
What do you guys think? How do you brainstorm for new business ideas? How do you think of new businesses, or do you just let the ideas/opportunity come to you?