How to come up with ideas for a startup

Ideas are over-rated. Ideas are ten a penny. Ideas are nothing without execution. Often said, and probably somewhat true, but without an idea, you won't even get to the startup start-line. An idea - even a stolen or re-purposed one - in a pre-requisite.

But even for a walking idea-machine like me, proper good ideas - as in ideas worth investing the next 5 years of your life in as you turn them into a business - are really hard to come across. You have an awful lot of ordinary, boring and even plain daft ideas, for every rather good one.

Leave it to chance and you may either never come up with anything strong enough, or you risk wedding yourself to an idea that you love but no one else ever buys into. By being systematic you can up your overall volume of ideas and get to more good ideas, faster.

I have a process for good idea generation. This works well for me as a disciplined way of both generating and more importantly filtering-out ideas that aren't strong enough commercially. It also works really well in a classroom and workshop environment, where we typically go from initial idea to a good business concept in around an hour.

With a little bit of practice, and some suspension of disbelief, I think most people can come up with more good ideas:

"I can't believe that!" said Alice. "Can't you?" the Queen said in a pitying tone. "Try again: draw a long breath, and shut your eyes." Alice laughed. "There's no use trying," she said: "one can't believe impossible things." "I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for half-an-hour a day. Why, sometimes I've believed as many as six impossible things before breakfast." Lewis Carroll, Through The Looking Glass

What follows is an outline my personal approach. There others that I sometimes use, but this one works best for me and an idea from this process took me to being named Innovator of The Year. These days I can do this entirely by myself and still get to good ideas, but when you're starting out I suggest doing this in pairs or a group of pairs. I also specifically set quiet time aside solely for idearing (though sometimes I multitask with walking or driving) often using this time to process and scenario through previous thoughts and observations. It probably takes me about half an hour per initial iteration of an idea when I do it on my own.

To dispel the improbable myth that I am some kind of ideas-genius, I ran this process with a class of sixteen-year-olds at Airdrie Academy earlier this week, for a Founders4Schools session. They'd never done the exercise before and to illustrate the process in action I will use the ideas they came up with, rather than mine!

1. Problem/Solution Discovery

I have internalised this process to look for things that could be different, or better, and often have both halves of this conversation in my head. Both for those of you who'd rather talk to another person than themselves, here's how I do it in a classroom:

Get into pairs. For 5 minutes Person A starts and Person B responds. Do this for 5 minutes then swap, so that Person B starts and Person A responds.

Person A - come up with annoying, irritating, inefficient or frustrating things that bug you in your daily life. Turn to Person B and tell them one thing - let them respond and expand before you move onto other ideas.

All your sentences need to start with one of the following:

“I really hate it when”...... “It’s so annoying when”..... “Life would be so much better if”..... "It doesn't make any sense to me that"....

Just say what you feel - don’t worry about if it is silly or impossible - in fact, silly and impossible is great!

Person B - listen to what Person A says and then adds to their suggestion by imaging what solved or better would like. Don’t disagree or argue, take what they said and make it even bigger. Imagine what better would feel like.

Your sentence should start with “Yes, and wouldn’t it be better if"…..

As a group. we share an idea from every pair and the whole group votes for which idea to take forward to make into our company.

At Airdrie Academy the idea the class voted for was a way to talk directly to animals - massively beating some perennial favourites like self-making beds, clothes that put themselves away and school flexitime.

2. Who else has the problem?

List out all the different customer groups who also have this problem - write down as many as you can think of. Then alongside each customer group note:

- What type of customer are they? (eg b2b, consumer, gov) - How many of them are there? (low, medium, high) - Are they able to pay, and if so, roughly how much? (low, medium, high) Which customer groups have the highest ability to pay? - Who has the most pain and the most to gain from your idea, even if it only half works? (low, medium, high)

Flag up the top and second most promising customer group.

Potential customer groups for our pet talking solution included pet-owners, scientists, advertisers, farmers, animal transporters - but the initial customer group the class settled on was vets, as it was felt they had the most to gain from even an incremental improvement and would be most likely to pay for a solution that them see more patients, diagnose more efficiently and win more pet-owning customers.

3. How could it make money?

Say we solve our problem, our idea becomes real. How could it make money? Consider opportunities for multi-sided markets, recurring revenue, multi-year licenses, one-off sales, micro-incremental charges, big premium price tags.

The class saw the potential for per user/vet-practice and per animal pricing and considered ways to charge for both software and in the field hardware. They also recognised direct to consumer models could follow. Already this idea is shaping up to be one with commercial potential.

4. What would success look like?

This is about surfacing the minimum that needs to be achieved to figure out whether the business behind the idea is on the right track. It could be network effects, profits, manufacture, prizes, technical validation, regulatory approval - it is important to be able to identify meaningful measures of progress and things that will have to trigger iteration or even walk away.

Team Airdrie were spot on with some of their indicators of success - they wanted peer-to-peer referrals and word of mouth (a great growth forecaster), they were happy to see revenue above profit at the early stages - and they wanted their technology/solution to work sufficiently well that vets would see such a measurable improvement that they would keep using the solution on an ongoing basis.

5. How to go about making the idea real?

I deliberately leave all thoughts of the how until last, because if the who and why doesn't stack up, there is no point in wasting brain-power, and I'm not interested in abstract innovation. Also, I am a problem solver - I am not scared of the how - that is the process of innovation and in many ways, it's my favourite bit.

First up are we likely talking about a physically manufactured product, software, hardware, retail, services - maybe a hybrid. Then a very, very top-level, what type of functional requirements might there be me, what type of expertise likely required. How might we get the solution to the customer, are there logistics implications.

An important question I ask myself at this point is the extent to which my skillset overlaps with the likely requirements. It's fine to build a complementary team as you execute but if you have literally none of the skills or knowledge sets required you will be at a huge disadvantage and unlikely to understand the barriers in your way. I like ideas where at least 30%, ideally more, of the top level skills needed to solve the problem sit squarely in my personal domain - eg data, AI, software, analytics, data technology. That also brings the advantages that I am more likely to recognise paths to market and have access to relevant networks.

An idea can be a good one, but that doesn't mean I am necessarily the right person to execute it. So what about the Airdrie Pet Tech startup? We didn't spend a lot of time on the how, but we did identify that as well as expertise on pet sounds and facial expressions, and possibly a former vet, we'd need software development skills, data and machine learning. And maybe someone who'd worked on Google Translate. Nowhere near as impossible as the class imagined when they picked the idea - but probably not my next startup (unless you're a vet who speaks 4 mammals and is looking for a data tech co-founder)!

So what next?

Now you have the best commercial idea ever - there's a market, it may be technically doable, even by you!! Fantastic. What next?

Here's what I used to do: get massively excited, decide its the best idea ever, register my 239th domain name and possibly a trademark too and build a launch page - all by tea time. I have a LOT of domain names. Then I'd kind of hurl it out there to see what happens next. Not very systematic.

This is what I try very hard to always do now: Maintain enough excitement to keep momentum, while I let it brew a little. If it still feels good, it still excites me and can fend off objections that pop up in my mind, I start to take it seriously. I create a Google Drive folder. I open my copy of the Disciplined Entrepreneur Workbook. It the idea really has legs I go to the Disciplined Entrepreneur Toolbox and create a new project. Likewise with Trello. I do the horrible task of exploring just how many people had the exact same idea already (not that this should necessarily stop you!) I start to populate my trusty hand-drawn templates. And then maybe, just maybe, my idea proves it deserves the chance to become a business.