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There are many steps that need to be taken in order to be a successful entrepreneur. Whether it’s learning how to keep a handle on your stress, or fear of failure, or even technical skills such as learning how to best utilize social media. Being an entrepreneur is a long and arduous journey.
And the journey of a thousand miles begins with a single step.
For entrepreneurs, it’s all about creating change, and challenging the status quo. For entrepreneurs, that first step is coming up with that game-changing idea. And that’s where most of us get stuck.
At Foundr, we get hundreds of emails from loyal readers asking us the same thing, “How do I come up with the right startup idea?”
It’s a simple question, but it’s actually quite complex. Because not all ideas are the same.
Each idea is different whether it’s in size, shape, or scope, and great ideas strike us at different times. Sometimes they take years to form, other times they hit us when we least expect it.
Steven Johnson does a fantastic TED talk about a key aspect of where good ideas come from.
But how do you come up with a truly great idea?
After all you can’t test a market, or validate something that doesn’t physically exist yet. You risk your intellectual property if you talk to anyone outside of your friends and family.
So how do you know if you’re sitting on a game-changing idea?
Taking a look at all the great success stories Foundr has been exposed to, I was able to track down 5 ways in which all great ideas are born.
What does the future look like?
By definition an entrepreneur’s job is to create change, whether it’s just locally or internationally, an entrepreneur is trying to change the world in whatever way possible.
As an entrepreneur, your job is to bring the world to a future that only you can see.
“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.” – Peter Drucker.
But how do you look into the future, outside of crystal balls and the odd visit to your local fortune-teller?
While it’s impossible to predict the future, what you can do is learn how to employ strategic foresight.
“Foresight is a systematic, participatory, future-intelligence-gathering and medium-to long-term vision-building process aimed at present day decisions and mobilizing joint actions. Foresight arises from a convergence of trends underlying recent developments in the fields of ‘policy analysis’, ‘strategic planning’ and ‘future studies’.
It brings together key agents of change and various sources of knowledge in order to develop strategic visions and anticipatory intelligence. The difference between Foresight and other planning activities relates to the participative dimension of foresight.” – Strategic foresight as defined by the FOREN report.
In layman’s terms, strategic foresight is essentially the ability to make informed and educated guesses. However, it’s more than just trying to predict the next market trend.
Strategic foresight is about looking into the past for recurring trends that apply to the future. Taking in all the information available at present. And actively implement strategies to shape and inform the future you want.
Although, like many things, it’s easier said than done.
Strategic foresight is either planning for the probable outcome, or trying to manipulate it so that you achieve the preferable outcome.
You’ll be hard pressed to find a more perfect example of a successful idea borne from looking into the future than Indiegogo.
Indiegogo, today, is the largest and most popular crowdfunding platform in the world. Through our interview with Chief Development Officer and founder Danae Ringelmann we learnt how Ringelmann looked into the future to disrupt an entire industry and changed the world with the advent of crowdfunding.
“The SEC (US Securities and Exchange Commission) laws at the time that prevented peopled from investing online. But I said, ‘it’s probably time to change the law because the laws were written at a time when technology didn’t exist, the internet didn’t exist, the only time to protect people from risk was not allow them to engage at all.’ But with technology you could actually limit can expose themselves to.” – Danae Ringelmann, CDO and cofounder of Indiegogo.
By acknowledging the rise of entrepreneurship, the ever-growing possibilities of the internet. Ringelmann was able to look into the future and capitalize on the opportunity. Shaping the future of crowdfunding by launching Indiegogo in 2008 and effectively democratizing the world of finance.
Solve a personal problem
One of the better ways to come up with a great startup idea is to try to solve a personal problem. Not just any problem, but a personal one. Some sort of pain point that you have to deal with all the time, and just wished that there was something out there that could make your life just that little bit easier.
If you’re truly an entrepreneur, complaining about the problem won’t satisfy you. You’ll actually go out and solve it.
Coming up with an idea to solve a problem sounds like the obvious, no-brainer solution for coming up with an idea. But you’d be surprised at how many people come up with a solution for a problem that doesn’t actually exist.
At the wildly successful startup incubator Y-Combinator they call these manufactured problems ‘sitcom ideas.’ Ideas that sound like something a sitcom writer came up with for a character that sound vaguely plausible, but are actually incredibly bad.
Paul Graham, cofounder of Y-Combinator, uses the example of a social network for pet owners as an example. It sounds vaguely plausible because there are millions of pet owners out there and therefore a huge potential market.
But it doesn’t actually solve a defined problem. While some pet owners might use this product, there’s nothing that would actually motivate them to want to use such a service. He goes on to say:
“The danger of an idea like this is that when you run it by your friends with pets, they don’t say “I would never use this.” They say “Yeah, maybe I could see using something like that.” Even when the startup launches, it will sound plausible to a lot of people. They don’t want to use it themselves, at least not right now, but they could imagine other people wanting it. Sum that reaction across the entire population, and you have zero users.”
Constructing a solution to a problem you think people have just means you haven’t done any market research.
Solving a problem that you already know exists, guarantees that there are others out there that are experiencing the exact same thing and are looking for a solution only you can bring. And just like that you have a guaranteed user base you can start selling to.
Remind is a mobile app developed by brothers Brett and David Kopf that recently raised $40 million in their Series C round of funding. The entire idea was based around solving a very simple problem, the way teachers communicate with students and their parents.
The premise is very simple: teachers, students, and parents download the app and teachers are able to send out reminders to their students about upcoming assignments, exams, classroom updates, or even simple encouragement. It allows parents to be active participants in their child’s education, and revolutionizes a system where entrusting a child to bring a letter home is considered the standard.
“We live in a day where you can click a button and call Uber, or get a pizza delivered in two minutes. But if your kid is failing in school, you might not find out for three months. And we want to solve that problem.” – Brett Kopf, CEO and cofounder of Remind.
Boasting over 300,000 downloads a day at the start of the school year in the US, it’s almost baffling that the idea for Remind came about because CEO Brett Kopf said to his brother one day, cofounder and VP of Growth, how he wished there was an easier way to get reminders before assignments were due.
I recently wrote an article about Nomiku and its CEO and founder Lisa Q. Fetterman, and what struck me the most about their startup story was how much Fetterman just wanted to solve a very simple personal problem.
“One day while I was cooking I lamented about how there’s this one thing that separates restaurant quality food from home-cooked food, and that’s the sous vide machine.” Lisa Q. Fetterman, CEO and cofounder of Nomiku.
Sous vide is the method of cooking by placing food into a vacuum-sealed plastic bag and placing it into a precise temperature controlled water bath. Sous vide machines used to be large bulky pieces of machinery that cost thousands of dollars and could only be found in high-end restaurants around the world. It just wasn’t a worthwhile investment for the home chef.
Fetterman was determined to change that by building a sleek, aesthetically pleasing, and equally powerful version accessible to anyone who wants one.
Today Nomiku is the most successful Kickstarter project in the food category, raising over $1.3 million in two separate campaigns. The Nomiku can now be found in kitchens around the world, from the best restaurants in the world, to the White House, to personal homes.
What are you passionate about?
Passion is a, if not the, key ingredient to success. But what is passion? It’s a word that so excessively used that it’s lost almost all meaning.
This is what Steve Jobs have to say about the value of passion when asked, at the iconic D5 conference, what his most valuable advice to entrepreneurs would be.
What passion isn’t is a dream or a hobby. That’s why the phrase ‘follow your passion’ can come off as flawed advice, not because it’s bad advice, but because of a severe misunderstanding of what passion actually is. For example the fact that you like to bake as hobby doesn’t mean you should become a baker, much less a business owner.
Passion, as defined by the Oxford Dictionary, is: “an intense desire or enthusiasm for something.”
What we can safely determine is that passion is a strong emotion that lives inside of you that drives you towards some sort of goal. It has the ability to breed confidence, curiosity, and motivate you more than anything else in the world.
In my book, passion is one step short of being obsessed because of its all-consuming and single-minded nature. It’s that feeling you get when all hope is lost, but something burns so strongly inside you that you just have to continue. It’s that desperate need for perfection, it’s ambition, it’s a devotion that could almost be seen as religious, it’s what pushes you to continue despite the struggle, it’s raw, and, most of all, it’s that desire to turn your dreams into reality.
If you don’t have passion as an entrepreneur, you have nothing.
The constant element found in success stories of those who followed their passion wasn’t just a singular desire to make money off their hobby. It was coupled with a passion for change, to create meaning.
“Chase the vision, not the money; the money will end up following you.” – Tony Hsieh, CEO of Zappos.
Take a look at this fantastic TED talk by Guy Kawasaki where his first requirement for a successful idea is an entrepreneur’s desire to create meaning. Not their desire to make money.
“I’m very passionate about the importance of disconnecting. I think technology is fantastic in so many ways, my background is in technology and I came up through this route, but I also think it has a really negative effect on society in a number of ways and it has a negative impact on people.” – Kate Unsworth, CEO and founder of Kovert Designs.
It’s this passion to change the world that’s led Unsworth to create a line of wearable tech combining her background in tech and her interest in fashion and design. Unlike the Apple Watch, or Google Glass, the idea behind Kovert’s latest product isn’t to find more ways to keep you connected to the digital world, but the exact opposite.
Instead Kovert’s wearable tech will only notify you of the most important notifications, weeding out the rest to give you peace of mind and help you live in the moment. All the while remaining impossibly stylish in comparison to other players on the market.
GoPro first debuted in 2004 founded by “The Mad Billionaire” Nick Woodman, who disrupted an entire industry with his revolutionary idea. GoPro is now America’s fastest-growing digital imaging company and it’s impossible to hop onto YouTube without seeing tons of GoPro footage.
The initial idea behind GoPro came about in 2002 after Woodman’s second attempt at entrepreneurship had flopped. Deciding he needed a break he took his wife, then-girlfriend, Jill on a 5-month surfing trip through Australia and Indonesia.
It was through pursuing his hobby of surfing he came up with the idea of building a wrist-mounted camera that would allow him to take high-quality action shots that was, up until that point, considered impossible to do.
From there passion took over and he began selling seashell belts, he bought in Bali, along the coast of California from the back of his 1972 Volkswagen Westfalia camper van for the initial seed capital. He would then spend 18-hour work sessions holed up in his bedroom designing and building the first prototypes.
“I was so scared that I would fail again that I was totally committed to succeed.” – Nick Woodman, CEO and founder of GoPro.
And it’s that commitment to succeed that has led GoPro to go the way of Google, or Xerox. It’s become so successful that “GoPro” is no longer just a branded name but has become so culturally significant that its name is now a verb.
Do it better
In this modern age where the majority of entrepreneurs are aiming for, and being taught to aim for, disruptive innovation. I personally am a firm believer of innovation and creativity, and highly encourage many others to establish themselves as their own original brand.
However, at the same time, I cannot deny the fact that there have been other incredibly successful entrepreneurs who have made their millions off creating foreign clones of pre-existing ideas. Something that has earned the, almost universal, ire of many of their peers.
“Good artists copy, great artists steal.” – Pablo Picasso.
This phrase by the famed painter has left me scratching my head, especially in today’s entrepreneurial world where innovation is touted as the number one skill an entrepreneur must have. I’m left with a puzzling thought experiment.
Even Steve Jobs famously said that Apple was ‘shameless’ when it came to stealing great ideas. Something that left Apple executives scrambling for an appropriate answer years later when asked about Apple’s dichotomy of aggressively pursuing copyright infringement cases and their ‘shameless’ stealing of great ideas.
I’m afraid this is an entrepreneurial Gordian Knot that will take much than this single article and author to solve. So, as always, I’ll trust my readers to be able to solve certain issues on their own while I go about providing the facts.
The fact is that the merits of first-mover advantage are dubious at best. Being the first to market can also easily mean being the first to fail.
It’s been proven time and time again that you don’t necessarily need to first to market in order to succeed. Second-mover advantage has all the benefits of hindsight. You can improve in the areas in which your predecessor failed, you don’t have to waste time building an MVP for an already validated market, consumer and market research is easier to come by, and it’s much easier to get funding for a proven market.
However simply copying a pre-existing product isn’t going to cut it. Unless, for whatever reason, there’s an untapped market out there that the pre-existing product hasn’t reached. You must provide value beyond what already exists.
Meaning that you have to legitimately fix a problem that your predecessor couldn’t solve, and not just be a cheap gimmick that possesses change for the sake of change.
This comic by Poorly Drawn Lines sums it up best I think.
Speedlancer is a relatively new platform freelancing platform that was launched last year by, then 19, CEO and founder Adam Stone. As technology tears down more barriers in communication freelancing has never been easier. The working landscape is changing and more and more people are deciding that working remotely is the route for them.
This has led to a boom of crowdsourcing platforms from eLance to Fiverr and everything in between. However the traditional pains of freelancing still remained: inconsistency in service, unreliability to deliver on time, and overall poor quality of work.
Speedlancer is removes these traditional pain points by having over a hundred carefully selected professional freelancers on call, and a guarantee that all work will be delivered within 4 hours. Through careful research Stone has managed to create a crowdsourcing platform with sacrificing quality, speed, or price.
You’d probably be surprised to find out that Dropbox, wasn’t actually the first cloud-based storage service. In fact there were at least a half a dozen in existence before founder and CEO Drew Houston began writing the first line of code while on the bus.
In fact Houston’s initial pitch to investors was rejected. No one was interested in another cloud-based storage service when so many already existed, and even they weren’t doing that well.
So how come Dropbox succeeded when all of it’s predecessors failed? They solved the marketing problem.
Reading the success story of Dropbox is like taking a masterclass in viral marketing.
Dropbox uploaded its first demo video onto Digg. They made a point to speak authentically and without pretension, a simple video showcasing its features. However that demo video also contained small in-jokes and Easter eggs tailored specifically to Digg users. Overnight Dropbox went from 5 thousands users to 75 thousand.
They also made sure to incorporate a viral loop as part of their marketing strategy. With a ‘refer a friend’ program, where initial users were awarded extra space if someone signed up via their referral. Or awarding extra space when giving Dropbox a mention over social media.
Dropbox did what other similar program could not. It learnt from their mistakes and provided value to its users. That’s why Dropbox today is valued at over $10 billion, and the rest is barely worth remembering.
Whose life do you want to change?
One common mistake many young startups make is that they want to be the next Facebook, or the next Google. These entrepreneurs are usually the ones that are all chomping at the bit to become the next Mark Zuckerberg, or the next Elon Musk.
Usually these entrepreneurs naively believe they are creating something that’s guaranteed to be universally beloved, that they’ll be able to hack their way to explosive growth. And they’ll also manage to change the cultural landscape forever.
Usually these types of entrepreneurs engender the exact same response from investors, and VCs alike, along with myself.
I’m all for ambition but what these entrepreneurs fail to realize is that these titans of industry didn’t find their success overnight.
Facebook was originally created for Harvard students, and then spread to other Ivy League schools before becoming the conglomerate it is today. Google was originally made when the internet used to be a much smaller place, and it wasn’t universally used by everyone in the world yet.
If you take a look all the successful startup stories we’ve covered over the years at Foundr, you’ll realize that they rarely were out to change the world. They were out to change the world of one person.
“Wonder what your customer really wants? Ask. Don’t tell.” – Lisa Stone, CEO and cofounder of BlogHer.
When you launch a startup you have to have at least some users who really want you’re making. Not just people who could see themselves using it one day, but people who need it right now.
Following the Pareto principle, otherwise known as the 80/20 rule, what you should be doing isn’t focusing on trying to appeal to everyone. But only that 20% who you know would love to get their hands on your product. Don’t try to change the world from the get-go, change the world one person at a time.
“You can either build something a large number of people want a small amount of, or something a small number of people want a large amount of. Choose the latter. Not all ideas of that type are good startup ideas, but nearly all good startup ideas are of that type.” Paul Graham, cofounder of Y-Combinator.
Two years ago Nathan Chan launched Foundr Magazine. The premise of Foundr, our mantra, is very simple: provide value and actionable advice for entrepreneurs and startups everywhere. And I like to believe we live up to that quite admirably, and if you’re reading this article I’d like to believe you think so too.
Whether it’s providing that value and advice through our magazine, sharing our exclusive interviews through our podcast, providing a free eBook of our Instagram strategies, or through our blog with articles like these. If you’re an entrepreneur and you need a go-to resource, then we want to be that very resource, no strings attached.
Foundr Magazine, both as business and as a community of entrepreneurs, has grown exponentially in these past two and a half years because we strive to consistently bring value to our users. If you’re a regular subscriber then thank you for helping push us to success, if you’ve just tuned in then thank you for dropping by and I sincerely hope that we’ll see you again.
The startup idea behind Invoice2Go came about because CPO and founder Chris Strode wanted to make the lives of small business owners a little bit easier. Coming from a family of small business owners he witness first-hand the painstaking task which was invoicing.
Unless you had the technical knowhow to operate a full accounting package, if you were a contractor of any sort, you were looking at sending out an invoice the old-fashioned way, with pen and paper. More often than not this turned out to be a time-consuming and highly inefficient way to do invoices. But there really weren’t many other alternative options available at the time.
Invoice2Go was designed with the small business owner in mind. A cheap and easy-to-use solution to the problem that faced many contractors, tradespeople, and freelancers alike. Able to be used across all platforms, Invoice2Go
In the 12 years since he began hacking together the first prototype while on the train, Strode’s startup idea is now the number one invoicing app worldwide. And many entrepreneurs around the world thank him for making their lives just that little bit easier.
World-changing events and great success stories throughout human history can be traced back to a single idea.
These are the five ways you can come up with a great startup idea. If you’ve been paying attention you’ll also notice a certain degree of overlap and successful startups contain more than one element. And that great businesses are able to meet the requirements of all five.
But don’t fall into the belief that having a great idea is all you need. If you have a great idea, then you’ve successfully completed the first step of becoming a successful entrepreneur.
Now set some goals, build yourself a clear vision, and let your idea take shape. Work hard to turn your idea into a reality and let it change the world.
If you’re still looking for inspiration, take a look at this handy infographic about the different startup ideas that Y-Combinator would love to fund.
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