On a sunny afternoon in 1943, Edwin Land stopped to take a photograph of his 3-year-old daughter, Jennifer, during a family vacation in Santa Fe.
He focused, snapped, and then went to move on. But Jennifer wasn’t happy with the outcome and asked a very simple question: ‘Why can’t I see the picture now?’ In that moment of ‘why not?’ one of the most innovative photography companies of all time was launched: Polaroid. We all love an origin story like this. They make it seem like coming up with a business idea is just waiting around for inspiration to strike. But like all parts of the creative process (and don’t let anyone tell you that running a business isn’t a creative endeavour), we can’t allow ourselves to simply be passive and wait for ideas to come to us. Just like there’s a process for creating a website or developing an app, there’s a tried and tested process for coming up with a business idea that is interesting, innovative, and has a better than average chance at success. So if you’re looking to come up with your own Polaroid-level idea, here’s a 3 step process to go from napkin sketch to fully formed idea.Step 1: Find a real need
You might be passionate about your idea, but remember that a business is a transaction. I need something (or think I need something) and you provide it. Whether that’s a product or service doesn’t really matter. The crux of it is that I’m willing to part with my hard-earned money for the thing that you’ve created. So it makes sense that at the core of all great business ideas is a need. The greater the need, the more successful the company. Here’s a few ways to find that need.Ask what bothers you. And then find a way to do it better.
Entrepreneurs like to call this scratching your own itch. Back before they made software, 37Signals—the company behind project management tool Basecamp—was a design firm with a problem. They needed a simple way to communicate with clients about their projects, but there were no good options available. So they made their own. Kent Plunkett needed to hire a secretary but had no idea what it should cost. So he built Salary.com, now the world’s largest compensation information database (which he took public in 2007 at a valuation of $175m!)“Why is it so important to work on a problem you have? Among other things, it ensures the problem really exists. It sounds obvious to say you should only work on problems that exist. And yet by far the most common mistake startups make is to solve problems no one has.” – Paul GrahamThe key here is understanding that your itch is contagious. If you’re having this problem, it’s likely hundreds of thousands of others are in the same boat. Better yet, you already know your target audience: you.
Use Beginner’s Mind to uncover missed opportunities
Our past experiences have a funny way of getting in the way of forming new ideas. We assume that because something happened one way, or didn’t work in the past, that it will do the same in the future. In his classic 1962 book, The Structure of Scientific Revolutions, author Thomas Kuhn argued that people who achieve “fundamental inventions of a new paradigm have either been very young or very new to the field whose paradigm they change”. Unique ideas come when you don’t know the conventions of an industry. But what if you’re already experienced in the field that you want to start your business in? (As you probably should be) One option is to try to enter what Zen monk Shunryu Suzuki calls Beginner’s Mind:“In the beginner’s mind there are many possibilities, but in the expert’s there are few.”- Shunryu SuzukiWhen coming up with business ideas, it can help to step back into that beginner’s mind—to step back away from the specifics and ask basic questions. Just like Edwin Land’s daughter, ask ‘why not?’ Amazon CTO Werner Vogels calls this Working Backwards—get your face out of the details and the nitty gritty and look at your project with new eyes. Because you know who else is a beginner? Your customers. Get in their head and you’re sure to have the start of a winning idea.
Step 2: Do the research
Once you have your initial business idea (or ten), the next step is to research that idea. To see if there’s really something there. But the problem with this phase is that it’s all too easy to get stuck in the vortex of research, feeling the need to read everything that’s out there on your given topic. In fact, I’d wager there’s more content on any given topic available online than any one person could read in their entire life. Love hair braiding techniques for dogs? Google’s got nearly 3,000,000 results. Have fun. Instead, start by narrowing your ideas through a high-level search on sites like Quora or Hacker News. See what questions people in your target market are asking and what’s available. What problems do they have that aren’t being addressed? Then, check Google to see if those needs can be turned into profit. One way I do this is by using a Chrome plug-in called Keywords Everywhere. Keywords Everywhere shows how many times people search for the term you put into Google, as well as the average spend on AdWords. This way, you not only get an idea of whether or not people are searching for what you want to create, but also can see whether or not people are putting money behind that term. While not a perfect formula, we can say with some confidence that the higher the spend, the more someone out there believes there’s business potential. Now that we’ve narrowed down our idea, next, I turn to this simple 3-step research structure from author Nir Eyal.1. Google once, then start sketching
Ted Greenwald, a 35-year newsroom veteran and current news editor at the Wall Street Journal, says the first place he starts when researching any topic is with a quick search.“Instead of reading anything, I do some searches. I just open up a bunch of tabs that look promising; I might very quickly have 20 tabs open.”Nothing revolutionary there, but the key is to stop. Get an overview of what other people have said about your business idea and then start sketching your thoughts out.
2. Talk to the right people (not just the smart ones)
There’s never a shortage of experts or industry analysts willing to talk to you, but letting a real, potential customer ramble on to you can give you more insight than any polished answer. Let the experts guide you, but when it’s time to learn more, go straight to the source.3. Solidify your understanding by teaching
Research has shown that when we explain something to other people, we come to understand it better ourselves. So at the end of your research phase, try teaching what you know to a complete outsider. As Eyal suggests:“Write out everything you know about the subject as if you were teaching it to someone else. Not your smart friend but rather a toddler. This may sound silly, but this part is incredibly important and has worked wonders for me learning new things.”Nir Eyal
Step 3: Validate
The last step in your quest of coming up with business ideas is to actually go out there and validate your idea with real people. This means two things:- Getting out of your comfort zone and talking to the right people
- Building something to show them
Get out of your comfort zone
One mistake we all make when coming up with business ideas is to ask for validation from the wrong people. Just like during the research phase, you need to talk to the right people—that means users, potential customers, strangers. People who are interested in the field you’re going into, but might not want to use your product. And if they don’t think it’s a good idea? That’s ok. Back in 2004, if you’d asked most people over the age of 25 if they would be interested in publishing their lives semi-publicly on the internet, they would have been horrified. But college students? Most definitely. If Mark Zuckerberg has listened to the ‘experts’ at the time instead of the users, there would be no Facebook (for better or for worse). Here’s another example: When venture capitalist Jules Maltz led Institutional Venture Partners’ investment in Oportun, a financial services company primarily serving Hispanic communities, he had to find out what mattered to users who were vastly different from him. So he went straight to the source, hanging around branches and talking to anyone he could to find out whether or not they loved their banking experience. “Many people only look at a problem from their point of view?—?that’s a terrible way to do things,” Maltz says. True knowledge comes from asking the right question to the right person.Just start building
Your idea is just a single piece of kindling. You need a lot more to turn it into a roaring fire. So the final step of working towards your business idea is to create something real. Whether that means putting up a splash page and gathering emails to gauge interest, or building an MVP to try to attract those first few paying customers, it’s all about starting. It’s a bit extreme but one of my favourite examples comes from Richard Branson. Branson didn’t like the service on an airline he was flying, so he decided to start his own. But how does a magazine publisher start a new airline from scratch? He took a first step by calling Boeing to see if they had an airplane he could lease. No idea is too big that you can’t take the first step to making it a reality.Lastly, remember to be open to the impossible
Polaroid would never have been created unless Land had been open to the impossible idea of instant photography. The iPod never would have happened without the impossible idea of carrying around a rooms-worth of albums on a device that fits in your pocket.“If you are not willing to risk the unusual, you will have to settle for the ordinary.”Jim RohnThe entire travel and tourist industry wouldn’t even exist without two crazy brothers being open to the idea that humans could fly. When you’re looking for a business idea to pursue, don’t discount the seemingly impossible. Allow your mind to be open to ideas that others might call crazy and then go through this process to see if there’s something there.
