A company is only as strong as the idea it grew from. However, for many entrepreneurs conceiving a billion dollar startup idea is not as easy as we would like. Because the process of ideation can be daunting, we often give up on our dreams of launching and running successful companies. For, as Napoleon Hill once said, "All achievements, all earned riches, have their beginning in an idea."
If you’re someone who has dreams of launching the next Facebook, Apple, or Google, but doesn’t know how to come up with a promising idea, Benjamin Chong, a partner at Right Click Capital and Co-Director of the Sydney Founder Institute, has outlined the fundamentals for this process in the article, “A 5-step guide to ‘ideation’ for start-ups: Right Click Capital’s Benjamin Chong”.
When brainstorming for startup ideas, write down everything that comes to mind, regardless of how absurd or mundane your ideas are. If you find that you typically have a hard time formulating ideas, you may be surprised by just how many you come up with when you let yourself go.
Don’t believe us? Read what Benjamin Chong has to say on the matter:
I was recently involved in a directed brainstorming session where we were asked to come up with 25 ideas to a business problem in five minutes. Using a stopwatch, this meant we had to come up with a solution every 10 seconds or so, leaving little time to criticise each idea. After the five minutes were up we actually generated 31 ideas, beating the target!”
Now that you’ve collected an assortment of ideas, you must analyze each one and assess its strength before moving on to the next one. Chong recommends asking yourself a series of questions for each idea you’ve thought up.
Can you see yourself working on it in the next decade or so?
Is the idea simple and easy to explain?
Does it have a revenue stream?
Is the idea unique or better than what is out there?
If you answer “no” to any one of these questions, ditch the idea.
A few years ago, I was keen on exploring a home meal replacement business. With more people living in apartments and pressed for time, it seemed like a logical growing market. My business partner and I gathered lots of statistics, visited factories and conducted a bunch of market research. In the end we didn’t proceed because we couldn’t see ourselves doing this for the next decade or so.”
By this point you should have at least a handful of potential startup ideas that survived the previous steps. Research the market for each of the remaining ideas and constantly keep an eye and ear on the current trends of each marketplace you are interested in. Keep a list of who’s succeeded in that marketplace and who’s failed, as well as why they succeeded or failed. All of these steps should help you determine the need for your idea.
The goal of research is to help you make informed decisions and reduce your risk of failure. Once you have the information that you need, trim down your ideas list and retain only those that have potential to succeed.”
At this stage in the process, you should have an even smaller, but stronger, group of ideas left to explore. Formally and informally share your ideas with friends, family members, colleagues, and anyone else who may be interested in hearing your ideas to get honest feedback.
Conduct surveys to hundreds of potential customers (not just your mother!), interview experienced entrepreneurs, advertise your idea in social networks, create a prototype and see how the market responds. Retain the most promising idea.”
After you’ve established your strongest idea, you must kill that idea. That’s right, the one idea that survived this entire process must now be killed. How? Look for holes in your idea, scrutinize its validity, assess its viability, etc.
This last step may seem like it undermines the efficacy of the entire process, but it is essential to help alleviate the risk of starting over after a business venture has failed. For, as Benjamin Chong puts it:
The goal of this exercise is to find out if the idea will stand test of time and scrutiny. If it survives, then you have an idea with a better chance of succeeding. If it doesn’t, then it’s time to move on and start the ideation process anew.”