I had a conversation almost twenty years ago with a brilliant founder friend who sold me on the importance of having the right idea. He told me the story of an American expat that founded an offshore outsourcing company before that was a thing.
The company exploded and the guy got rich overnight. The takeaway for me was that the guy woke up one day to an idea and went on to great success. I was young and impressionable and the idea stuck. I don't know about you but I've spent more years than I care to admit waiting for that 'great idea'. Starting out, I figured I'd help my friends with their ideas until I had my own epiphany. I worked my tail off and time passed. I waited.
Ten years and several exits later I had a great resume and several wealthy friends, but still no idea of my own. What happened? I was a smart guy. I had gone to bed thousands of times and had expected to wake up like the guy in my friend’s story, struck by my own eureka moment, but no dice. Clearly I was coming at it the wrong way. I gave it a lot of thought and realized I had been like a hunter waiting for my quarry to shoot itself. Bambi doesn’t have a death wish. That isn't how it works.
So what now?
There are great books out there about turning workable ideas into working business models. If you’re like me you just needed to get over the initial hump of the idea - overcoming that initial entrepreneurial writer’s block, but how to do it? For starters, my friend was wrong and the zeitgeist agrees. "Ideas are easy" has become a mantra these days. Execution is king. It's true. But don’t misunderstand me. It doesn’t mean that ideas aren’t important but getting an idea as close to ‘good’ as you can will save you tremendously on time, money, and misery. The difference between a serviceable idea and a bad idea is like the difference between hitting the edge of the target and shooting in the opposite direction. But how much of a difference is there?
Years ago before smart phones, PDAs were all the rage. Two smart chaps got together and built some tech to allow mobile payments via PDA. They imagined a world where people could transact with each other rather than businesses. Sounds great. It was an abject failure. Thankfully they recognized the problem was with the platform and not the concept. They switched to allowing the transactions via email and Paypal was born. You can be pointed in the right direction but aiming at the wrong target. The take away is that nearly every first idea is bad. The idea is to start as close to good as you can and have a process to take you the rest of the way. Failure is not a destination. When we miss, we should learn and take another shot. Take Athena's lead. Be a hunter.
Getting started.
I see friends of friends starting companies for the sake of starting companies. This is especially common in the Midwest. They choose their vertical based on what they think is hot with little regard given to whether it’s a fit for their passions or for validation from the market. Worse, they might have a good idea but pursue the solution rather than the problem which makes it difficult to find product/market fit. It’s particularly tragic because their seed round is usually funded by friends and family.
I have seen a lot of this lately. I have been contacted or contracted by a number of doctors wanting to cash in on the explosion of interest in medical data apps and data warehousing. The amount they are willing to spend on these ideas is staggering. I have turned down nearly all of them. Why? Because I’ve already read about someone several steps ahead who is better positioned with a better vision. I know this and I’m not even a specialist in the field. They are so focused on winning the startup lottery that they are out of touch with the state of the art in their own field. As of this writing nearly every one that has contacted me has stalled or is being eclipsed by teams focused on a problem rather than a payday.
If you’re located in the midwest or someplace similarly remote the problem is magnified so get ready to move or read voraciously and network like mad. It’s the only way to keep from embarrassing yourself in front of potential investors or by burning through cash you have no hope of paying back. Does any of this sound like you? Stop. Give grandma her money back. If you end up with a successful company it will be in spite of your approach rather than because of it.
Ignore the bandwagon. Those people are chasing solutions. You can end up finding and building solutions for problems that don’t exist. Chase problems. Issues of ignorance and misguided focus vanish when you take this approach.
If it’s all about the problem, which one do you choose? You don’t hunt for big game in Brooklyn. It isn’t there. So where do you look? Your life experience and passions are an invaluable source of ideas, so search yourself. The area you pursue should be something you love or work with on a frequent basis because the learning curve is small and the insight is high. This lowers risk and improves your chance of success.
Choose the what.
When I began this process myself I figured I’d do something in online advertising. I had spent over 15 years of time in that industry and figured my experience would make it easy to think of something in that space. I opened up a Google doc and started brainstorming. I forced myself to spend at least an hour every week coming up with ideas and writing them down. I wanted to document the process so I could look for trends in my thinking. Besides, a sharp shooter doesn’t start that way. They get there by missing. A lot. You need practice. Consistency is key.
It was great. This part of the process felt right. I reached out to other successful entrepreneurs and they agreed I was on the right track. I spent several months throwing ideas at the wall. The process felt right but I wasn’t sure about the results yet.
The first idea that I felt strongly about was intended to radically simplify the market segmentation process for small to midsized ad agencies. My partner and I got strong reactions from initial interviews and felt we were on to something. We started working up sketches for the product and flowcharts for the UI. We felt strongly about our ability to deliver something our clients would be excited about but as the days turned into weeks I began to question if advertising was a passion mismatch. I was chasing the problem rather than the solution but was I excited about it? Did it feel like a problem I could get excited about?
In Running Lean Ash Maurya talks about his time at WiredReach. He spent several years of his life starting and building this company but he reached a point seven years in when, after some soul searching, he realized he was no longer a fit. The company was successful but it was no longer exciting. It was a passion mismatch. Life is too short. A good idea isn’t always enough. Sometimes you have to pivot rather than the company.
With me the prospect of working on my idea felt too much like work and not in a good way. Despite all my experience with advertising I wasn’t finding a fit. I had been able to get excited for others when building advertising technology for them but when it was my turn I couldn’t do it. I had ideas but couldn’t convince myself that any were worth my time. Were my ideas bad? No. But I was trying to borrow someone else’s inconvenience. I wasn’t as passionate about advertising as I was about other areas of my life and finally decided it was worth changing my focus. I could still use my experiences but I discarded advertising and chose aspects of my life in which I was still an expert. The mood of my brainstorming sessions changed immediately. I was excited at the idea of solving real problems I had myself and the ideas began to flow.
Hunters use dogs to flush out their quarry. They do this because of a scent hound’s profound sense of smell. You can’t smell a good idea but you can certainly sense it in other ways. If you put the time in you should start to notice a feeling you get when you’ve got a good idea. It’s inconvenience. You can notice it in someone else, but for passion/product fit it's a sensation that should be your own. Inconvenience makes an excellent compass. When you feel it, head in that direction. Ask "why?" Ask that often enough and you'll get a glimpse of the beast you're looking to snare. The idea won't yet be clear but the general outline of the problem should be apparent.
Be patient. Understand before acting.
One of the first ideas that excited me was a B2C take on vendor managed inventory. With a simple device you could automate restocking your fridge. I wanted to dive right into writing code, but a friend held me back. He suggested I breathe, take a step back and do my homework. Each day I thought more about what I was about to build I realized the difficulty in getting the hardware piece right. Coming from a software background where you can pivot on a dime I realized that a hardware play wasn’t the best fit for me from a risk perspective. I didn’t have people in China and would need to develop those contacts or move their myself. Being able to iterate quickly was important to me and should be important to you. The number of development/feedback cycles you can get through before you run out of resources will determine how many shots you can fire with your ‘gun’. The more times you get to try, the more chances you’ll have to perfect your aim. Pausing to reflect saved me months of wasted shots.
So you've been on the hunt for some time. You've spotted something of interest. Do you immediately spring into action? Sure - if you haven't a care for the cost. Tackling something as soon as we spot it often feels right because our instincts evolved on the savanna. Hackathons and the like encourage this mentality. The projects that emerge are often novel but are risky as the foundation of a business. Attempting to build a solution before you have a deep understanding of a problem is like a hunter leaping on the back of the first thing that moves. If you're lucky it's dinner but it could just as easily make dinner of you.
Be patient. After that first hint you are on to something give yourself time to explore the problem you have discovered. Like the hunters of old it may be necessary to track your prey for some time before finding just the right way to move in for the kill.
Surprise.
The more time you spend hunting for ideas the more sensitive you’ll become to the feeling you get when you find a good one. While considering one idea you might run into another. Maybe it wasn’t where you expected it to be. Maybe it was hiding under your bed. Don’t let your expectations blind you to opportunity. If you feel inconvenience tugging strongly at you in a direction unexpected, pursue it. It means you’re on to something.
When to move?
At this stage some let analysis paralysis stop them dead in their tracks. Don't panic. You’ve done the work. It’s not a matter of if your ideas are worth trying but when to start. How do you know? When you have validation.
Your passion for the problem is a good gauge. If you can't stop thinking about the problem that’s a strong signal. If others can’t stop thinking about your problem that’s an even stronger signal. Talk to people. Does the idea excite them too? Try to find people that give critical responses and not just agree with you. This discussion will likely be before formal customer interviews so you don’t have to have a formal business plan. You’re looking for a gut reaction. You can also test the water by checking if other players are attempting a solution but where you feel your idea solves the problem significantly better, faster, cheaper, etc. If nobody else is trying to solve your problem you're either a clever first mover or a fool. So tread carefully. There are many ways to come at this, but it's important to validate.
In my case I chose to validate my approach to the process instead. I started making predictions. I figured if I could write one elevator pitch per week, if the ideas were any good sooner or later I should see them show up as funded companies. It was hard at first, but it got easier. I started having more than one idea per week and could sift through the rubbish. I watched and waited. I was busy with another startup so the waiting was easy. It didn't take long. In six months I got my first hit. It was an article announcing a seed round funding one of the first ideas I'd logged. Eighteen months passed and three quarters of the ideas hit as seeded companies. I felt foolish for not doing this sooner. I'd been having big ideas all along. I just didn't bother to catch them.
It bears repeating that it’s not about having a single great idea. Develop a process for generating and validating them. The specific process itself isn’t as important as having one. Keep at it. Try things. Discard what fails. Keep what works. You’ll get better. This approach will guarantee you the ability to turn even so-so ideas into projects worth pursuing.
Attack!
Everybody has great ideas but few stop to take them seriously. When inspiration strikes and an idea appears in the mind, they dismiss it as unattainable or trivial. To quote Tim Westergren, founder of Pandora, "Be sure to 'notice' ideas when you have them. Stop. Take the time to consider them seriously." Set aside the time and make it happen. Once you've got the idea do your research. Track your prey. Understand it thoroughly. Then validate your approach. If the idea still has its hooks in you, pounce on it.
Remember starting a successful company might involve a good idea but running one will require having them over and over. The cycle never ends so it’s important to have a process and to continue to work it.
Make a choice. It's time to act. The next big idea is out there and it's yours for the taking. Ready your bow and let Athena's arrow fly.
About the Author
Jeremy Stanton has spent the last 20 years in startups. He began with his own PC game company in college, switching soon after to web based businesses during the first dot com boom. Most of the time since has been spent building web-scale data-driven ad platforms with a recent successful exit with the sale of Fetchback to eBay. He is an avid start-up mentor and agilist. In his free time he enjoys cycling, running and crafting humorous turns of phrase.