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.
- First, pick the market I want to serve
- 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
- 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. ↩