How to find the right idea for your new business

When I am giving lectures on entrepreneurship or networking with groups of would-be entrepreneurs, I am frequently asked ”But where can I find a good business idea?”

Initially I was surprised that so many people started with a need to be an entrepreneur, rather than starting with a business idea; but now I realise it is quite common. So I decided that I should blog about how to go about finding a business idea.

Finding the right idea for you is all about hitting your personal “sweet spot”. That is the intersection of four areas:

• Things that you are passionate about
• Areas where you have a strong competency (or at least can build one)
• A real problem that needs a solution (or a better solution than currently exists)
• A business concept that can generate the type of income / lifestyle / fame / independence / … that you want.

To make it simple, we have designed an infographic that demonstrates this and includes some further detail about each area.

So … how to go about it

Step one

Think about the first two points: your passion and your competencies. Brainstorm your ideas and review and refine until you are comfortable with where that leaves you. You might even draw up a matrix with competencies on one axis and passions on another – and then think about what the various points of intersection might mean.

Hint: if you can find something that you like doing that the average person does not like, it can be a good place to start. For instance, Paul Graham of Y Combinator explains how his father likes mathematics, which many people do not. Those things that “don’t feel like work” to you, but do to others, can lead you to some great ideas.

Step two

Think about what problems exist (that are within your competency / passion space) that are currently inadequately solved. In the best cases, it is a problem that you yourself suffer from; but if not at least one in which you have some experience or knowledge. Make a list of those problems.

Hint: you may need to do some investigation here – fortunately Google is a great source of information at this level. One way of sparking ideas is seeing what others are doing (see “Idea sparking” at the end of the blog – plenty of links and interesting things!!)

Step 3

Take the list and rank each problem on the basis of:

• How big is the problem
• Number of people / organisations that suffer from it
• Seriousness of the problem to them
• How competitive is the problem space
• How well do the current solutions address the problem
• Are there lots of companies / solutions providing the solution
• How well you think you might be able to develop a solution (it does not matter if the solution itself is unclear at the moment?.

It is useful to get a little quantitative here: weight each criteria, rank each answer and work out a weighted score for each problem (click on the text to download this problem assessment calculator as a guide). Let the actual score act as a guide, but ultimately you need to pick the problem that feels “the best” to you.

Hint: after settling on a problem, it is a good idea to chat to a few potential customers to see if your hunches are right.

Now that you have an idea, does not mean you have a business. It is just the beginning. As you have probably heard, more than 70% of new businesses fail and that is because first time entrepreneurs seldom know the right way to go about starting, testing and refining their idea before actually building anything. Even people who have years of corporate business experience do not fully understand how to start a venture from scratch. Fortunately, there is a growing body of knowledge around a more scientific process to launching a new venture that will put the odds of success in your favour. Have a look at our latest blog that discusses this – the no BS step-by-step guide to launching a new venture.

Even better, if you are keen to get going immediately, why not sign up for our Catapult Programme to help you get your idea rapidly launched. We have taken best practices in “lean startup” methodology, mixed it with some critical training modules and added mentor input to really help you get your new venture to the critical point of having paying customers.

Our final piece of advice…

Just do something. Too many people think about starting a businesses, dream about new ventures, talk about their brilliant ideas – but never get down to doing anything. To borrow a phrase from Nike: “Just do it!” If it does not work out, the lessons you learn for the next time will be invaluable.

And if 70% failure rate scares you, just remember what Wayne Gretzky said: “You will always miss 100% of the shots you don’t take.”

---

This article by Simon Gifford originally appeared on Mashauri.com and is republished with permission.