How to Come up with an Idea for a New Business
I am the host of the Startup Accelerator program, a 12-part series hosted on Bizversity, a content platform for entrepreneurs and small business owners.
In this program, I conduct interviews with entrepreneurs and business leaders. These practical and informal interviews are designed to help those who want to build their own startup business. I discuss commonly used innovation tools and strategies including the Lean Canvas, prototyping, Lean Startup, Design Thinking and much more.
To kick of the series, I am excited to share my first interview with Matt Adendorff, CEO of Fusion Labs. In this 10-minute interview titled How To Come Up With a New Business Idea, Matt shares practical suggestions for thinking about potential new business ideas.
For effective innovation to happen, Matt believes that not only do you need to have a great novel idea, you need to ensure that idea actually solves a problem that customers care about, and that the idea has a sustainable business model behind it.
Coming up with a novel idea
Like any successful startup knows, coming up with a great business idea means starting with a problem that desperately needs solving. So, to come up with a new business idea, think about the problems you experience in your own everyday life. It could be related to your work, your home or your community. Chances are if you are experiencing a problem or a frustration, there are probably other people that experience the same problem too. Do you find communication between departments really poor at work? Do you find the process of finding a good real estate agent time consuming and frustrating? Whatever it is, having a little black book of everyday annoyances or problems is a good way to start recording opportunities and reflecting on them to see if they can become potential business ventures. Every problem can be turned into an opportunity.
Solve a problem that customers care about
If the impact of the problem you’ve identified is significant enough and experienced often enough, chances are people will buy into a solution that aims to solve that problem. Determining if this is the case is done through customer research so make sure you talk to as many of your target market as possible during this early validation phase. Figure out if it is in fact an important problem or if it’s something that isn’t that big of a deal - it will save you a lot of time if your problem is validated during these early stages.
Find a sustainable business model
Thinking about the business model including costs (fixed and variable) as well as revenue (ongoing or one off) is imperative to the sustainability of your business. Will you generate revenue through advertising (YouTube) or will you have a subscription model (Spotify)? Will your revenue come from one off purchases (book sales) or will you sell recurring consulting services (retainer)? The Lean Canvas, a substitute for the old-fashioned 60-day business plan, can be used throughout your startup journey and it’s a good way of recording all the elements of your business model. It may change overtime as you gather more information but at least you can have a go and start thinking about the viability of your idea.
What’s also valuable in this interview is that Matt discusses the differences between working on a new idea in a corporate (existing) environment and working on one in a startup (brand new). Unlike in a startup, there are many stakeholders, legacies and competing priorities within a corporate environment. Matt gives some great tips and tricks on how to navigate corporate challenges so you can develop your new business idea in a startup or a corporate environment.
This interview is helpful for those who think they have a business idea and want some advice on what to do next, as well as for those who haven’t got a business idea and what some help in getting started.
Enjoy the interview here