Many people dream about starting their own business. Either as a full-time job or as something on the side. However, something's keeping a lot of people from realizing this dream of having their own business: Coming up with the right idea. An idea that we can actually make money from, an idea that has a place in the market and an idea that we would like to work on for a long time.
There are many ways to generate ideas. But if you’re completely lost, or if you have too many ideas, then keep reading as we introduce a fast way to find an idea that you can begin testing and give a final validation within an hour.
Growthlab.com has made a guide for generating good ideas and testing whether there is a profitable market for them.
The method consists of four questions and a model for testing your possible ideas. Remember that the goal isn’t to reach perfection with this exercise. First and foremost, it’s about getting new ideas written down on a piece of paper and then gain insight in whether or not your business idea is viable.
Remember, you are still so early in the process that if your idea at some point turns out to be unsustainable then you've only invested your own time and its pain free to start over with another idea. Ask yourself these questions:
The guide begins with this question because it puts you in the right mood. When you’re aware of what you’re already paying for it’s easier to understand that you can also do something that other people are willing to pay for. Which three things are you already paying others to do? Perhaps someone is fixing your car, cleaning, delivering your groceries or walking your dog?
Make a list of 10 things you’re good at. It can be things like cooking, drawing, writing or maybe you’re even good at sports or getting up in the morning. There are no bad ideas and no ideas are too small, so write down everything you can think of.
If you’re having trouble finding things you’re good at then ask your friends or colleagues. They will definitely come up with something different than the things you think of.
A good way to assess your interests is to think about what you do on your personal time. When no one else is in charge, how do you spend your time? Are you playing games, working out, watching TV or something else? Which books do you read and which movies do you watch? Those areas are things that you are interested in and that you’re likely able to work with for a longer period of time.
Don’t stop until you have found at least 20 ideas.
To build a business takes time and hard work. That’s why it’s important to figure out two things.
If your idea isn’t profitable it’s a waste of time to develop it. If the idea doesn’t interest you, and if you don’t care why your idea must be carried out, then you possess neither the passion not the drive that is required to turn it into a good business because you will quit before reaching you goal. Remember, it still has to be fun.
From the questions above you've identified at least 20 ideas that you are interested in or good at. Now you must find out which of them are profitable.
Choose the idea that seems to appeal to you the most and put it through the test below. If the results to the questions below show that there’s no market for your idea then you repeat the process with your second-favorite idea.
Consider the following for each of your ideas:
Competitors are a good sign. It means that there is a demand and a market for your idea.
For instance, use Google to evaluate the demand. You can also check Amazon’s bestseller lists and see if there are any books that address your idea. This also indicate whether or not there’s a market.
Also consider whether your customers have the ability and the will to buy your product?
If your target group is students or single parents then they are likely to have less money than 50 year old home owners.
Draw a model like the one below and insert your various ideas. Remember, it’s not supposed to be perfect. Make a quick assessment of how many customers you think there are in your potential market and how much they are willing or able to pay.
The model gives you an assessment of where your ideas is located in relation to demand and price. It consists of four quadrants that Growthlab calls High end, Golden goose, Labor of love and Mass market.
Ideas in this quadrant are really good business opportunities. Here, it’s possible to demand a high price while there’s also a big potential market. Here we find a lot of online courses, among other things.
Can also be a good business opportunity. There are still lots of potential customers but the will or the ability to pay is lower. Here you’ll find products such as self-help books, for instance.
The high end quadrant is also a potentially good opportunity. But here you’ll find fewer customers. For instance expensive brands such as Prada or Rolls-Royce. Coaching can also be found here.
Ideas that land in this quadrant have neither a big market nor the opportunity to demand a high price. This is why they are called Labor of love. They are often hobby projects that you cannot stop working on. Projects that very few are interested in or willing to pay for.
The model is quite similar to the BCG matrix that you can read more about if you want to work with market size and market growth.