How to figure out what business to start
“If only I’d come up with that… God damned you Zuck!!”
That feeling of frustration when you see someone making millions of dollar from an idea that’s so simple you could’ve come up with it.
Awful. Just awful.
In this blog post I will give you some useful insights how to come up with business ideas, and where to look for them.
Before we get started though I would like to emphasize one important thing.
After you’ve read this blog post and you go out there to look for your idea. Whatever you do, don’t limit yourself to try to come up with a product or service that’s a complete novelty that no one has ever seen before.
Remember, Zuckerberg probably wasn’t even among the first 1000 people to launch a social network. Joe Gebbia and Brian Chesky came way after Couchsurfing.com when they started Airbnb. And by god Tinder wasn’t very disruptive when they launched yet another dating app.
Although these super successful startups did something revolutionary, the product or service itself wasn’t unique.
Where to search for brilliant ideas
I remember I was sitting at a table in a bar in Huntington Beach, California talking to a woman. After I’d told her I was an entrepreneur she said that she was carrying a dream to start a her own business one day but she was a little bit scared but more importantly she didn’t know what business to start.
I asked her what she was interested in.
“I would like to something within psychology because I like it and I have a lot of connections in that industry.”
This isn’t the case for all entrepreneurial people, having a certain industry that you would like to work within. For me for example, it has always been more about building a company than working within a certain industry or market.
But in the case of this woman she already had the industry figured out but the invisible lightbulb above her head seemed broken.
So I told her…
“Well, since you know you wanna work with people in the psychology industry, and you say you already know a lot of people in that industry, - why don’t you just go and talk to them and ask them what they need? Ask them what would make their professional life easier or more efficient. And when they tell you their problem, ask them HOW they would like someone to solve it for them.”
She look stunned and almost embarrassed when she said…
“Hm.. It’s so obvious that it’s not obvious”.
This approach of talking to the customers asking what you can do for them is a rather well known approach. What I think is important though is to not stop asking when they tell you the need. Most likely the have an idea how (in a perfect world) they would like someone to solve it for them.
If you get them to tell you what their problem is and how they would like someone to solve it there only one important question left that you have to ask - ‘How much would you be willing to pay for it?’
The ‘copy-paste’ approach
Ok so if you know the industry you can simply ask the people within that industry what you can do for them. Simple as that!
But what about if you don’t know the industry. If there’s nobody to ask that can tell you what business to start, how the hell are you suppose to just pull a billion dollar idea out of your hat?
The classic approach here is ‘don’t look for the idea, look for the problem’.
It is true, once you see a problem that hasn’t been solved what you’re looking at basically is potential. But from my experience it is very hard to first discover a problem nobody has been able to solve before, think about it for a few minutes and then come up with the perfect way to solve it.
For all the businesses I’ve launched I have been looking for the idea. It is important though to avoid looking for ideas that seem easy to launch, fun or simple to maintain. Focus on the value you can provide to the customer, not yourself.
I like the ‘copy-paste’ approach. Taking a business concept that is successful in one industry and pasting it on an industry where it is not yet established.
You’ve probably seen tons of examples of this within the sharing economy. The concept of a buyer that has the demand, a seller that has the supply and a marketplace in the middle that matches the two together, and charges a commission.
There’s nothing revolutionary about Uber’s model - Ebay did it 20 years ago!
It’s just that nobody tried to (or at least managed to) do it within the taxi industry.
Today we see this concept spreading to one industry after another. Housing, bank loans, storage, household services etc. I even attempted bringing this concept to a new market myself, the restaurant industry in Sweden. Utilizing people with passion for cooking as ‘hosts’ and foodies as ‘dinner guests’ while charging a commission for the meal.
The sharing economy or marketplace concept is just one of many business concepts that can be copy-pasted on new industries. Try to see what business model you like that can be applied to a new industry.
What about concepts that already exists?
Ok so you can talk to your potential customers and ask them what kind of business you should start. You can start ‘Uber for private jets’ or ‘Dogvacay for turtles’.
But what about the examples like Airbnb where the concept already existed? How is it possible to start a business just like the competition and make it grow out of proportion?
The keyword here is insights.
Airbnb did a few things that for example Couchsurfing.com did not, that sent Airbnb through the roof while their competitors were scratching their heads.
One thing they realised was that high quality images on the postings had a gigantic impact. So they did everything from going to people’s homes and take the pictures themselves, to renting professional photographers. They decided to go for that perfect interior design magazine look and man did the customers like it.
In addition Airbnb realized that user friendly messaging between the guests and the hosts along with profile pictures built trust. Throw some rating and review systems in the mix and voila! Normal people felt comfortable letting strangers live in their house while they were gone.
When listening to Joe Gebbia and Brian Chesky tell the story of Airbnb it almost seems unreal how significant some insights have been fore their success.
So for all of you inexperienced entrepreneurs out there, you don’t have to invent a five figure sports car that runs completely on electricity.
Insights like these can be a game changer when you’re thinking about launching a business that from the outside looks just like the 1000 previous failed attempts .
Joachim Wernersson - Founder of AnyWebstore.com