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Ideas May 12, 2007

Posted by Brad in Entrepreneurship, Ideas.
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Like most potential entrepreneurs, I constantly have ideas bouncing around in my head. Most times these ideas are little more than that. Sometimes though, I’ll start to take an idea further. What follows is my typical process.

I find the the best way to come up with a good idea for a business is to solve a problem. Though, sometimes, it is hard to even identify the problem. This is where certain techniques come in. The first is the idea book and the second is the bug list. The idea book and the bug list are complimentary. Your idea book keeps everything together and acts as a scrapbook of sorts when fleshing out the ideas you create with your problem list. Some people I’ve read talk about doing exercises to find where your skills, talents, and interests intersect. This tells you a great deal about yourself, but all the self-knowledge in the world won’t bring you to a viable business idea.

The bug list or problem list is a way of brainstorming. Basically what you do is write down things that bug you or things you have a problem with in your everyday life and then you figure out how you would change them or make them better. Hit on one idea that you can think of a creative solution for and you’ve found your business idea. This works better than brainstorming about yourself abstractly because you’re still involving yourself in the thought process but you’re finding problems you’re passionate about. I think that being passionate about the problem you’re solving is one of the keys to running a great business.

Now there are certain things that will further set your idea apart. Your idea needs a niche. Like it or not, in the beginning, you’re not going to take on the big boys. It wouldn’t be smart to take on Sherwin Williams when it comes to paint manufacturing. The manufacturing process and distribution methods are just too complex. The barriers to entry are too great for an individual and the business is too traditional. Often times, in cases like this, people may argue that they’re really passionate and dedicated and they don’t care what anyone says, they will succeed. Those people would be well advised to take another look at what they’re doing. I’m not saying that one shouldn’t be dedicated and passionate but perhaps one should steer that drive and tenacity to the place where it intersects with a path of less resistance.

You need to find a niche within a larger market. A level on which the little guy can compete. If, for example, you had your mind set on the paint market it might be better to find a smaller problem you can tackle. In this case your “bug thought” might go something like this. You’re older and have an arthritic hand makes it tough for you to grip a paint brush. This is your problem, it bugs you that you can’t paint your house. The solution is that you create a more ergonomic paintbrush handle. To view it in more mainstream Internet terms, the guys at Google were bugged by the fact that they couldn’t find what they were looking for on the Internet. They set out to find a better way to do it and well you know the rest of the story.

Now taking off on the niche idea, you can’t just find any niche. You must find a niche you are passionate about, this is why solving problems that you have an interest in is going to serve you. If you look at it like you’re solving a problem rather than building a business, you’re likely to work a little harder for the outcome than if the preferred outcome is just a profitable business. Passion and Enthusiasm make up for a lot in the beginning and people react positively to it when it comes to the help you’ll inevitably need. Simply put, if you enjoy what you’re doing you’re more likely to do a good job.

The final thought here that’s a bit contradictory to what’s been said is that you shouldn’t over emphasize the need for the perfect idea. Ideas are a complex concept in today’s entrepreneurial world. Many daydreamers find that the idea is the stumbling block that prevents the process from ever beginning. It is my opinion, right now, that the big idea is not a necessity and in fact the exception to the rule. The greatest impediment to startup success is not the lack of a good idea but instead the lack of ever doing anything at all. The idea is used as the scapegoat and a cover for procrastination.

Throughout the history of business, examples of company metamorphosis are plentiful; from Virgin Brands getting its beginnings as Richard Branson’s student newsletter to the Land’s End catalog company beginning as a catalog that sold nothing but boat parts. What’s not necessarily always noted is that the reason these companies were able to successfully change is that they started with a somewhat viable idea in a related market. When the true idea for their business did arrive they had already formed a community around their business that would accept the change in the product and facilitate the change in the company as well. Branson sold album’s cheaply to students and Land’s changed to sell clothing to boater’s. Essentially their first idea hit their market but it just took them time to find the product that best fit their business and the community it had created. The rapid expansion of the companies came from relatively simple lateral expansion that occurred after that cash had already begun to flow in, even if only slowly.

The one thing that can be directly linked to their success is that they started doing something in their target market. They didn’t just sit there wondering what would be the perfect product. By just doing something they were able to build a community that eventually told them what their successful product would be. They may not have created a hit product on the first try but they did create a hit market.

In the examples we’ve talked about, those businesses have become successful because they got in at the front end of the trend. They didn’t try to emulate and compete against large and well established enterprises in their field, they either created the field or served it differently.

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