Startup ideas typically don’t happen from a lightning bolt of inspiration. Sitting inside hoping for an idea out of the blue isn’t the best bet. Instead, ideas come from experiencing different work environments and jobs, unique lifestyles and cultures, and getting out of your comfort zone.
Because of this, there is one sentence answer to create an idea. But there is a powerful and effective framework to guide that process.
Step 1: Identify Your Passions and Strengths.
Ask yourself: what do I enjoy doing?
The answer will guide you through this step by step process.
A startup requires a lot of work, and we mean a lot. Working at something you love will make the necessary sacrifices easier. Imagine staying late at the office on a Friday night or coming into work on a Saturday morning — you’re only going to want to do those things if you love and are passionate about your idea. You’re also likely to be good at things you’re passionate about.
In addition, consider your personal strengths. This requires some personal honesty because sometimes we would like to have a particular strength even though we don’t.
What do you believe you are good at? Creativity? Numbers?
Yes, passions and strengths are closely related, but they’re not identical.
To understand the difference, say that you’re just starting out in your career. You love finance, and you’re good at it. If you are a “people person,” good at establishing rapport and building relationships, that strength might lead you toward investment banking or financial advising. On the other hand, if you’re not very comfortable with people but good with numbers and complex tasks, financial analysis or writing trading algorithms might be more for you.
Ensure that you have your passions and goals either written down or in mind before moving to the next step.
Step 2: Establish Your Goal
Clearly identifying your goal for your startup is crucial since it can affect your industry, your choice of business, and how you approach the startup process.
Here are a few questions to answer:
Are you looking to build a business that you can sell to a larger company (typically in under 10 years)?
Do you want a company that you can run for the rest of your working life and then hand off to your heirs? If so, do you intend to manage hands-on the entire time, or do you want to eventually be able to put a management team in place and step back?
What are some roadblocks to reaching your goal, and how will you overcome them?
Write out your goal in one sentence. Once you have your goal clearly defined, you can move to the next step.
Step 3: Identify A Need
Identifying a need — the core of a successful startup — is both beautiful in its simplicity and vexing in its complexity.
Ask yourself this: what void are you trying to fill? Find a need that is either not being met at all in the marketplace or is not being met as well as it could be.
Fred Smith, the founder of FedEx, predicted in the mid-1960s that as computers became more common, companies would need a logistics system capable of keeping them running by supplying parts on short notice. Returning home from service in Vietnam in 1971, he found that his prediction had come true. He jumped into action and conceived a hub-and-spoke network that could move packages far more efficiently than traditional point-to-point delivery and built that network from the ground up. Today, FedEx is a globally known way to ship and receive packages.
Don’t believe that every good idea is already taken. The ever-increasing speed with which our world changes — thanks to technology — constantly creates opportunities for completely new business concepts. Less than 40 years ago, the concept of the “search engine” did not exist; today it is the foundation of Google, which has over $135 billion in revenue.
Write out the need you’re trying to fill before moving on to step 4.
Step 4: Do Your Research
As you identify potential needs that align with your passions, do the legwork to see what solutions exist in the marketplace.
Realistically, steps 3 and 4 will become a cycle as you discard nonviable startup ideas and develop new ones, but the research process will also lead you to new ideas as your knowledge deepens.
The internet is obviously the best tool for research, but don’t neglect other avenues. Talking to people in the relevant sector, conducting interviews, attending trade shows, and even just talking (and listening) to family and friends can reveal unresolved pain points.Train your ears to listen for phrases like:
“Why doesn’t somebody . . .”
“I wish you could just . . .”
“I wish I didn’t have to . . .”
Take a minute and write down your top 3 takeaways from your research. This can include competitors who are dominating the industry you’d like to inject your startup into, advice you’ve received, or other pain points from customers that you didn’t anticipate finding.
After this exercise, you should have the following written down:
The goal of the startup idea
The need your idea is seeking to fill
Research about your idea
This foundational work will go a long way in helping you see the validity and need of your idea. It’s also a start on a business plan if you decide to pursue this idea further.