Have you ever watched a successful business owner and asked yourself, “how do I get an idea for a startup?” Getting a startup idea can happen as a moment of inspiration, or from slow reflection on a problem. A startup idea may come from frustration. Or, from seeing technology and understanding a new way it could be applied. Startup ideas come from problems to solve and envisioning a business to provide that solution.
The Small Business Administration considers a business a startup when it hires at least one employee. There are about 3 million startups created each year, and around a third (1.3 million) are tech-related. Around 21% fail in the first year, 30% by their second year, 50% by their fifth year, and 70% by their tenth year. You would think the risk of failure might go down over time, but actually many startup ideas start strong and fizzle out.
It’s not just about coming up with a startup idea—it’s about coming up with a good one. Then, you need skills to adapt and improve it along the way to meet changing market conditions and customer expectations. Let’s review how to get startup ideas that have a good chance of succeeding.
Does a Startup Have to Solve a Problem?
The short answer to this question is yes, because every business has to solve a problem for its customers. Every purchase of goods or services answers a need or desire for the buyer on some level. That need might be as simple as hunger, as immediate as calling a cab, or as complex as running a business.
The reason tech startups are so common and profitable is that technology matched with innovation solves old problems in new ways. Whoever can develop the most user-friendly solution to a problem, or deliver the first solution to market, sneaks up on the competitive edge. This is especially true for service delivery to enterprise companies. These are startups that deliver business software and solutions to other businesses—and the ones founded by those with a tech background outperform non-technical ones by 230%. Today’s up-and-comers include online code repository GitLab, events platform Hopin, and commercial database manager Cockroach Labs.
But that’s not to say every startup must deliver a tech solution or be founded by someone with tech experience. At consumer startups, non-technical founders outperform technical ones by 23%. For instance, Airbnb was founded when two artists and graphic designers hosted three guests in their home. The idea was born out of the solution to the problem for consumers, and the tech followed.
Whatever your background, technical or non-technical, your startup needs to deliver something truly valuable and unexpected. 70% of founders eventually realize their intellectual property alone is not a competitive advantage in the market. The capability to pivot and adapt the core idea for better market fit through Lean processes and iteration can close the gap between the spark of a good idea and the rewards of long-term market success.
Startup Idea Generation Tips
As you daydream and strategize about the solution you want to deliver, here are a few tips that will lead to more fruitful and useful idea generation.
- Focus on the Market: Your idea is transformative in your mind. But what about the people in your market niche(s)? How will your product, good, or service change and improve their lives in a way that delivers lasting value? It’s not just about coming up with a cool product, but a product worth paying for. That means finding out what solutions already exist as your competition and understanding from the early stages how yours is different and better.
- Write, Sketch, and Model: In the early stages of ideation and discovery, it’s important to write down all your ideas and give them room to grow. This includes the fine-tuning and market fit of your concept as well as your plans for revenue streams, value propositions, and customer segments. Alongside, you may begin sketching and modeling the user interface for your website or app.
- Listen First, Measure Next: During and after the process of developing a minimum viable product (MVP) to launch your business, you must be listening all the time to the feedback, impressions, and ideas of your target users. If you’re trying to launch a new line of breakfast meal bars, you would listen to focus group feedback about the taste, packaging, and long-term energy. When developing software, you must listen to user feedback about the interface, features, functionality, branding, pricing… the list goes on, and you never know just what you might hear. But making sweeping changes based on every single piece of feedback is not the right move. Making the changes that seem most essential and measuring new reactions will then give you direction for the next phase of improvements. Some of those can even be completed after launch!
What if I Have a Startup Idea, But No Money?
Any serial entrepreneur will tell you the idea of no money is relative. Here are the steps you can go through to try and launch a startup with no money.
- Define Your Capital Needs vs Wants: How much money do you actually need to start the business? And more importantly, once you get it, how will you use it? Write this down so you can share the plan with investors and other allies as you advance the concept.
- Find Mentors and Get Advice: Outside your focus group members, you need an experienced entrepreneurial mentor to give you honest feedback about the viability of your startup idea in all its stages. Mentored startups grow 3-5 times faster and raise 7 times more money!
- Seek Funding Through a Venture Studio or Incubator: Once you’ve got a great startup idea you’re confident can succeed, it’s time to launch the business and generate funding. At this time, it’s important to find advisors and investors who truly have the best interest of your startup in mind.
Accelerate the Business Startup Process with NEXT Studios
NEXT Studios is the first and only public Benefits (B) Corporation venture studio in Indiana. This allows us to balance our need to make a profit with our values, ethics, and community impact. We often find that’s the goal of the startup founders we support as well. NEXT Studios guides local visionaries through a process of examining and improving a startup concept, developing the minimum product to launch, and building a team committed to selling the product.
Having a great idea for a solution in the market doesn’t mean you fully understand how to bring the solution to market. The best ideas in the world can fail due to lack of entrepreneurial experience. NEXT Studios is a collective of entrepreneurs committed to helping high-value concepts become high-value startups. Learn more about us and see if we might be what’s next for your startup idea.