Looking for Startup Ideas? First Pick the Market You Want to Serve

Summary: People have many ways of coming up with startup ideas. The most successful approach for me has been to (1) pick the market I want to serve, and then (2) try to find a problem to solve for them. It has accelerated Customer Development, allowed me to use my time more efficiently, and made work more enjoyable. Hear me talk about this blog post on SoundCloud.

If you’re not passionate about the people you want to sell to you’ve got a big, big problem. –Steve Blank

Revised  Re-written 8/27/2013 for Startup Edition – Since I originally wrote this post I’ve talked to dozens of entrepreneurs worldwide who have come to a similar conclusion – picking a market first is not only an efficient path to discovering opportunity but also a great way to find meaningful work.  So I decided to revise this post for this week’s Startup Edition Question:  How do you turn your idea into a startup?

My Startup Idea Failed – Now What?

Many of my startup help calls are from people who are trying to trying to figure out what to do next after confronting a tough reality – their startup idea isn’t going to work. If you find yourself in this position, congratulations – as painful and frustrating as it is, every successful entrepreneur I’ve ever met has been through exactly what you’re experiencing.  Failure is just a step on your path to success.

But for the moment you’re faced with an immediate challenge:   suddenly there is a big hole where you previously poured your time and passion… and you’ve got to figure out what to do next.  I’ve been through this 3 times in my career, and each time I took a few moments to reflect on what I learned about my choices and myself.

In this post I’ll share with you what I’ve learned about finding the right startup idea for you.

An Approach that Didn’t Work: Searching for a Startup Idea to Make Money Quickly

Many people who have never tried to start a company assume that inspiration for entrepreneurs comes from searching for ideas to make money.  Theoretically, this makes perfect sense.  Practically?  It never worked for me.  What most people don’t understand is that inspiration for startup ideas is a creative process.  A desire to change the world and solve problems is emotionally inspiring – making money isn’t1.

A few years in VC conditioned me to think about entrepreneurship in terms of models and spreadsheets and not creativity. So when presented with seed funding and an initial customer in the used car market I saw a financial model that just needed good execution.  My plan was 2-3 years of work to build the company and sell it.

Then plan A didn’t work. The 2008 financial crises hit the automotive industry and the big customer was suddenly worried about survival – not buying my product.  We had no plan B and I didn’t have the market insight (or, candidly, the passion) to come up with one. In retrospect the used-car market is probably the worst possible market for me.

I know entrepreneurs who made truckloads of money in their startups, yet I can’t think of a single successful entrepreneur whose startup idea was inspired by searching for a way to make money.

Passionate About a Particular Tech? Also a Bad Place to Look for Startup Ideas

I’ve met lot of people who are passionate about a particular new emerging technology or technology trend – DIY Bio, Machine Translation, AI, Cryonics, Linux, Mashups, Immersive Worlds, Nanotechnology, Quantifiable Self, etc.  It is only natural for people to seek start-up idea inspiration in their tech passions.

Unfortunately my tech passions have not been a good source of startup ideas either.  Technology passion does not inspire great startup ideas because it gets us focused on solutions – not customer problems.

I’ve been deeply passionate about the intersection of life sciences and software for a long time, so I decided to search in fields like bioinformatics and genomics (personalized medicine) for my next inspiration.  I assumed that getting up to speed on the tech would be the hardest part – it wasn’t. I didn’t have to become an expert in the tech overnight but I needed to know the basics and understand the industry trends. Even in such an arcane topic I could figure out how things basically worked after reading a few books and attending a few conferences.

The challenge was that testing any potential startup idea based on the tech required me to painstakingly develop new relationships.  Any technology can serve many different markets. Building relationships to test startup ideas is much harder than coming up with ideas.  As I’ve noted before, Customer Development can be a tough, long process.

What Worked for Me:  Getting Startup Ideas by First Picking The Market I Want to Serve

Most recently I’m trying a new tactic that is working much better for me.

  1. First, pick the market I want to serve
  2. Second, find a problem to solve for these people

Last Fall I decided I wanted to solve problems for startups and entrepreneurs and I’ve been testing product ideas since.  SoHelpful is my first startup idea inspired by this process.

Benefit #1: Faster Customer Development

As I’ve written several times recently, Customer Development is about slow, steady insight gained through weeks and months of new ideas and dead-ends.  Cycling through solutions ideas is faster than meeting new people.

Since I keep notes after every conversation and do my best to maintain an ongoing relationship with the people I meet, switching ideas is much easier when I’m talking to the same people month after month. Asking someone to answer a quick question through email or SMS or take a 10-minute follow-on call is a lot easier than trying to meet them in the first place.

Benefit #2: More Efficient Use of My Time

I’m writing this post in the city of Manila, Philippines.  I decided to fly here to help mentor at SW Manila and at a couple of local accelerators.  When faced with the opportunity to speak or attend an event I decide to participate based on one simple question:  Will there be entrepreneurs there?  If so, I try hard to go.

Like you, I’ve got a lot of interests.  But when I sit down to write for 5 hours on a Sunday morning I spend my time writing about entrepreneurship and not golf, learning Chinese, or one of my other passions.  Writing is hard work – and I work for my market.

Ideas change a lot quicker than people.  Since I know I’m going to keep building products for entrepreneurs I try to meet new ones every day by creating content, attending events, and helping them for free over Skype.

Benefit #3: More Enriching Work

Picking the market you want to serve almost guarantees you’ll enjoy serving customers – even the cranky ones. You’ve picked this market because you already empathize with people in it, already understand many of their challenges. You’re going to be working for these people for 5-10 years – it is probably the most important startup decision you can make.

Talking to entrepreneurs – about anything, really – doesn’t feel like work. It feels like what I would be doing anyway. Startups are a lot more fun when you truly care about the people whose problems you want to solve.

Finding the Right Market for You Will Take Time

Like anything worth doing, finding the right market for you will take time, trial and error.  Most creative people I meet have a lot of different passions and interests.  You’re probably thinking to yourself, “There are lots of markets I could be happy serving!”

In my experience this hasn’t been true – there were lots of markets I thought I would be happy serving.  But when it actually came time to working for them I realized I had an idealized vision of their needs.  I thought I would enjoy helping people deal with the challenges of medical finances until I began meeting and working with people struggling to pay medical bills – I found that I couldn’t empathize with them because I hadn’t been through their situation.

Similarly, lots of people think they want to work for entrepreneurs – then they start working with entrepreneurs and find them to be eccentric, disorganized, and demanding customers.

My suggestion is to try a few different ideas with different markets.  It is the only way you’ll know who you want to work for.

Need Help Finding Your Startup Idea?  I’m Happy to Help You

Need someone to talk to about whether you’re in the right startup market for you? Just pick a slot on my startup help time and I’ll be happy to chat.

Photo credit: Éole

  1.  If making money was the road to emotional happiness we would be seeing investment bankers singing and skipping their way to the office each day.  Instead, I’ve got a lot of friends who burned out of banking and left to become entrepreneurs.


  1. Brian Kessler August 26, 2013 at 11:49 am #

    Kevin this post was written for me. I started my first blog at the beginning of the year and within a few months I burned out. I’m back at it again but struggling to find my place and my voice. Your post just gave me an extra little shot of motivation as well as some good advice. Thanks again.

    • kevindewalt August 26, 2013 at 5:31 pm #

      Great to hear! Let us know how it goes for you.

  2. Yuheng Cai August 28, 2013 at 10:59 am #

    This is helpful and something I’ve been struggling with.

    • kevindewalt August 28, 2013 at 10:16 pm #

      Most people do…including me.

  3. Mayer Seidman August 28, 2013 at 2:11 pm #

    Hey Kevin!

    I think you are spot on with (the entire article as well :)) this “A desire to change the world and solve problems is emotionally inspiring – making money isn’t.”

    I feel like the emotional component is the driving force for most people working on something that does not really enrich lives. I cant speak for others but if i had created Airbnb, I would have been extremely excited because of the challenge and thrill of “the hunt.” Having an idea that is different and meets a need is a thrill in it of itself (even before implementation). I would not feel or say that I was acting to help enrich lives by making life easier (for guests) and opportunities to make money (for hosts). I dont blame companies for saying such things, because you need that outward appearance and motivation for employees within. But I probably wont believe you if you claim that that mission is keeping you up at night.

    “Most technology companies have vague mission statements that put a feel-good gloss on how they make money.”

  4. David August 31, 2013 at 1:30 am #

    It make sens, really ! Thanks for sharing your experience.

  5. Charles C October 1, 2013 at 9:44 pm #

    Hi I’ve been reading some of your articles and I am a fellow entrepreneur however I started a company from a problem that existed within another company making me a sub-contractor scenario… now getting to the point I was wondering I wanted to get into the tech/online internet biz field.. I was wondering what are some questions I could ask to my peers as a social research to find out some of there problems they’ve experience while using platforms/ internet / apps etc.

    • kevindewalt October 4, 2013 at 6:53 am #


      Probably a longer question than I can answer here. Feel free to book a slot with me or one one of the people I trust to help you think through this: http://sohelpful.me/kevindewalt/trust 

  6. shawn May 8, 2014 at 9:32 pm #

    Thanks for spelling out the last section === finding the right market will take time. This has been a big challenge for me. I have been pumped about a product I have for the past couple of months, but when trying to find the market, I’ve found it very difficult to see who I want to continue serving long term. You definitely spelled out my frustrations. This seems to be the biggest challenge and sticking point for me right now. Who do I want to spend at least the next 5 years serving? I created a mindmap to get an overview of the markets, which was super helpful to help me see markets that really dont fit, depite me thinking they would. Just need to keep looking for the next group to meet and serve. Thanks!

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