THE BLOG
12/04/2013 11:22 am ET Updated Mar 05, 2014

7 Tips for Generating Business Ideas

Ideas can come from anywhere. There are no hard fast rules for generating startup ideas. Some of them may turn into profitable businesses, and some may not. There are however frameworks to keep focused, filter ideas, and identify opportunities. Below are some of the strategies I like for coming up with and filtering ideas. I've also included some quotes from Paul Graham and Evan Williams for reference.

1. Look for Problems and Inefficient Processes

The way to get startup ideas is not to try to think of startup ideas. It's to look for problems... - Paul Graham

Having a problem is often a strong motivator for someone to buy or use a product. Needing something is much more influential thinking thinking something would be cool. Many of the most successful companies start by solving a problem and meeting a need a certain customer segment has.

2. Start with a Customer

Starting with a customer segment you want to serve, as opposed to a specific product idea, has both strategic and personal advantages. For example, finding customers to interview/sell to/market to is hard and time consuming. If you keep cycling through different ideas for different customers, finding customers can be extremely time consuming. If you focus on trying to serve one customer segment, you just have to find them once and follow up. A few factors to consider when choosing a customer segment include: what people you already have relationships or access to, how much you enjoy working with certain groups, and the size of the market. The next step is to figure out a way to provide that customer with something of value.

3. Ask People

Sometimes by simply interviewing people (i.e. "Customer Development") what their problems are, what's of value to them, or what they want, one can begin identifying startup ideas. Examples of questions you can ask to get customers to tell you about their problem include:

What are the top 3 challenges you face in your job?
What are some unmet needs you have?
What's the hardest part about being a [demographic you're serving]?
What tasks take up the most time during your day?
What product or service do you wish you had that doesn't exist yet?
What could be done to improve your experience as a [demographic you're serving]?

Answers to questions like the above can identify problems worth solving or even a specific product or service to provide.

4. Listen for Complaints

One way to learn about problems worth solving, is simply to be observant to what people complain about. Wiley Cerilli, Founder of SinglePlatform used this technique to get the startup idea for SinglePlatform. Restaurant owners kept complaining to him about how hard it was to manage all their information online so he knew he had an opportunity. What I like about this approach is that it connects customer needs to the "idea." Instead of picking ideas out of the sky, we're simply solving problems that we know people have.

5. Scratch your Own Itch

You can be your own customer. In fact, some say the best ideas come from one's own problem.

Why is it so important to work on a problem you have? Among other things, it ensures the problem really exists. It sounds obvious to say you should only work on problems that exist. And yet by far the most common mistake startups make is to solve problems no one has. - Paul Graham

Be observant of your day at work or outside of work. Look for tasks you find challenging or take a long time. Think of products or services that you wish you had. Solving your own problem may make you more motivated than solving someone else's. Once you identify a problem you have or a product or service you want, do some customer development to determine if there are others like you who want it too.

6. Look for Half-baked Solutions

You can also look for solutions that people are "hacking together" themselves. If they've taken the effort to make something themselves, such as a spreadsheet, it's a sign that it's an important problem for them. For example, people may be using spreadsheets to track or analyze things, but a more automated solution might make for a better solution. CRMs are a great example. As another example, people may be hiring lower level employees to complete tasks. If you could make that process cheaper or more efficient, you may be on to something. The fact that they're already paying for it would be a positive reinforcement.

7. Do What's Working

At a time when so many internet entrepreneurs are running around Silicon Valley trying to do something no one else has ever done, Williams believes that the real trick is to find something that's tried and true -- and to do it better. - Evan Williams

You don't necessarily have to reinvent the wheel to build a great business. In fact, doing something that's already being done can have many advantages. You could replicate something companies are already doing or differentiate in some way or price it lower if you think it makes sense. Solve an acknowledged problem with a different solution. If people are already using something, it validates that there's real demand for it. Uber is solving for the basic need of transportation. They're just doing it in a much more efficient way. Uber has taken advantage of the recent adoption of mobile devices to provide a service that wasn't possible before.

To learn more about startup ideas and customer development, check out my video course.