Create a list of things you’d love to do.
The first thing I did was brainstorm what I’d love to do if money wasn’t an issue. I came up with a list of 10 things, with subjects as diverse as teaching and sports. Imagine that someone gave you a credit card with no limits. What would you do with your life if you didn’t have to worry about money? What would you be excited to get up for every morning?
Don’t worry about what’s practical for now — give yourself permission to dream big and get those ideas on paper.
Find the intersection of your passion and profit.
If your list is anything like mine, not all of those ideas are going to make money. Sure, I could have started doing sports or taught people how to program, but I couldn’t see those making significant money. You have to analyze your list to see which passions have the maximum potential for profit.
For me, this was business to business (B2B) sales. I had learned a little about marketing from my first business, which had grabbed my interest, but otherwise I had no idea how it worked. Still, I was excited to learn more and could see the potential.
Go to the location for inspiration.
If you want to be good at something, go to the location where it’s best developed. So, if you wanted to get into fashion, you’d head to New York. For movies, you’d go to Hollywood. And if you wanted to create an IT startup, it’s Silicon Valley.
This might seem scary. I had no contacts in Silicon Valley at the time, but rather than give up, I built my network. I reached out over Facebook and LinkedIn to fellow tech entrepreneurs in San Francisco and spent two months in the Valley attending events, talking to people and finding inspiration.
Learn and work in the field.
When I came home, I set about learning everything I could about B2B sales. I contacted a friend who ran a small startup and asked if I could help with sales. I offered to work purely on commision, with no risk to him.
I ended up working there for four months and sold absolutely nothing. However, by the end, I’d spoken to countless salespeople and customers, read every sales book and had a deeper understanding of the field. More importantly, I also found an opportunity: I discovered salespeople were doing a lot of manual work to arrange their follow-ups, something I realized I could solve.
Look for small, new businesses (ideally with a personal connection) that you can offer your services to for free. While larger businesses already have solutions in place, a small business will likely jump at the chance for some additional help with no risk. In turn, you get to learn more in a real working environment. Win-win.
Validate the market.
First, I looked to see if there were any competitors. I found a few but knew I could do better. Remember, competition isn’t a bad thing. It means there’s a need in the market.
To further validate the idea, I asked for advice from my potential customers: salespeople. By appealing to their expertise, I found many were happy to provide feedback on my idea, along with helpful information I wouldn’t have found otherwise.
Ask your potential customers if they need your product or service. If they do, great. If they say no, that doesn’t mean it’s over. Instead, ask what they do need and what problems they’re facing. You’ll either validate your original idea or come up with a new one.
Be careful of trends.
I thought I’d found a great idea for my first business. QR codes were massive in China, and it looked like they’d be the next big thing in the U.S. I figured we’d make a great product and cash in. Sales started rising in 2013 and things were looking up. Then, nothing. Sales plummeted.
When looking for your big idea, ask yourself: Will there be a market here in five years? Ideas based on areas such as artificial intelligence (AI) and transportation are likely to be around for years to come. However, if your business relied on Windows mobile OS, your idea is now dead in the water.
Make room for expansion.
Another mistake I made with my last business was having an idea that was too narrow. We built all our features but had no idea what to do next. There was no room for expansion and not many systems we could integrate with.
While having a sharp focus can be a strength, it’s important to see the bigger picture. For example, a communications business could integrate with a CRM and rapidly expand its user base. Aim to provide a dedicated solution that can work well in other fields.
Getting started on your new business means investing time and money. It’s important to be serious about your idea. To me, that means you have at least one person working on it full-time. If you’re thinking you’ll work on this yourself whenever you have free time, that’s a bad sign. Do something to show you’re committed to making this work and get started.
Finding a good idea for a startup and getting it up and running isn’t easy. But if you take the time to identify profitable markets with room for expansion, you can make your business dreams a reality.