How to come up with a startup idea (and how not to)

You may think that the golden age of startups is long gone, but data would suggest otherwise. The total funding raised by European startups in the first half of 2021 skyrocketed to $57.5bn. That is 3 times more than the amount of funding raised in 2020.

With so many startups appearing and rising on the market, it seems that there is not much room to hit it big time. Even if your idea is so unique that nobody else is already doing it (which is actually a bad sign) how do you know if its any good?

Well you don't. At least not for a very long time. Thats why you should probably think long and hard before you commit on perusing your idea.

Most common mistakes

There is no silver bullet for coming up with great startup ideas, but here are some common mistakes people make in the process of coming up with the idea. Let's cover that first.

• “You have to be first”

It is a common belief that you need to be the first in the world to come up with something amazing. That is far from the truth. Certainly, being the first to the market has its benefits, but this is usually a very bad sign as it introduces an additional risks - For start, you will need to prove that the market exists and that people are actually willing to part with their hard earned money to have this problem/need solved. Be sure to apply extra caution before proceeding with a "first in the world" idea.“ If you like to quickly eliminate the first in the world idea, you could do the following exercise - Ask yourself if you can list down at least 3 reasons why this solution doesn't exist already.” If your only answer is "nobody has come up with this" You should probably ditch the idea and move on. 

• “My first idea is the best”

Going after the idea that simply feels right without really analyzing it. Surprisingly a lot of people do this, and I don’t know why. Once you decide on your idea and direction you will probably need to invest an enormous amounts of effort and resources for extended periods of time before finding out if you have made a good decision.  You’ll probably spend a year or two building it and developing it.  Does that not deserve a couple of weeks or months of meaningful research beforehand?  Please note, this is not a reason you should be stressed out with how your idea will turn out. Startups can change. A lot. In a few years, you might be heading in a direction you didn’t even think about in the first place. Just like Netflix for example. They went from mailing DVDs to people that rented out movies to a completely digital business model without a single physical DVD just years later. But landing in the right direction from the beginning drastically increases your chances of success. 

• “Non-existing problems”

Another common mistake I see people make is to come up with a solution for a problem that might not even exist and they think that’s their go-to startup idea. If you first came up with a solution and not a problem, that usually won’t end up well. You’ll focus on your solution and develop it but you’ll never actually find the problem. First, find the problem, then come up with a solution. It cant be done the other way around. 

• “It’s so hard to find a new idea!”

Too many people make the mistake of thinking startup ideas are hard to find when it’s actually easy. Unfortunately, we live in a world that’s filled with real problems. As said, all good startups come from finding a problem and coming up with a solution. Don’t force your ideas, if you force them, it’s most likely that you’ll make one of these mistakes. The best startup ideas come when you find them accidentally and naturally. If you didn’t find any, it’s just that you still haven't learned how to notice them. But the good news is, once you do learn, they will be around you all the time. 

Evaluation 

When evaluating your idea, it is of great importance to be realistic and sincere with yourself. There are some rules you should follow in order to get a real view of whether your idea is something you should continue with.

• How big is your idea?

How big your idea is based on already existing companies in the same or similar niche. How long do they exist? How big are they? Are they successful worldwide? Let’s imagine you want to start an airline company. Try to think of some worldwide known successful airline company? You can think of a couple, right? That tells you, that idea has the potential to be huge. Maybe your idea is currently not that big in the world, but can it solve a big problem? Or can it solve a small problem very effectively for large numbers of people? Do you see some changes coming up in the world that will enhance the pain and problem your idea solves? 

• Are you the right person? 

This means, are you and your team(or the team you can assemble) the right fit for your idea? Can you bring out the most of your skills in developing it? And I’m not talking about sacrifices, hard work, and dedication, everyone has to have that, but if you want to start the above-mentioned airline company, and you have years of experience working in the airline industry and you know its struggles, its advantages, and its needs, then you are the perfect fit for your idea. You already know the industry and already have the knowledge that gives you the upper hand compared to someone with no experience. 

• Is it solving a problem?

The perfect case scenario would be, you personally have the problem your idea is trying to solve. That way, you know the problem actually exist, and you will probably know all the steps that are necessary to solve it. Or maybe you wouldn’t know them all, but if you have that problem, you will not stop until you solve it. That’s the great thing about being passionate about your projects. 

• You yourself want it 

It’s a great sign if you personally want and could use the solution you are making. It’s much easier when you are creating something you need and want than creating something other people want. That way you would need to guess and make a lot of research about customer needs, feelings, behavior, points of view, etc. When building it for yourself, you’ll be the first one to point out the good things and the bad things about that solution, and that way make the needed changes at the right time. But before jumping on the "scratch your own itch idea" you need to be reasonably sure that a lot of other people want it too and that this isn't something you just think you want because you want to build a startup. 

Ask yourself this question: "How much effort did I put into trying to find a solution to this problem before I decided I am going to build a solution to this problem".

Filters

When people reject start-up ideas it is usually because of 1 or more of these filters that we’re going to talk about. The worst thing is, these filters will make you give up on your great idea without even asking yourself “How can I get past this?”. And yes, every single person with a start-up idea sooner or later stumbles upon these filters. The important thing is to learn how to deal with them, learn how to turn those filters off! 

• Tough start! 

The first filter where most people take the fall is this one, it seems hard to get started. Every beginning is tough, no matter what it is. But that’s the moment where real problem solvers are recognized from the others. It really would be a shame if your amazing start-up idea fails just because it’s hard to start. You should have enough motivation to fight through all stoppers, especially the first one! 

•  Boring space

This stopper appears with problems that are obvious to many people but they are boring to work on so no one wants to fix it. Those problems need attention too! Potential solutions would be of great use to many people, there just needs to be someone that will take those problems out of the boring space and deal with them! 

• Ideas that sound too ambitious

Start-up founders tend to give up on ideas that sound too good to be true or too big for our perception. Those are kinds of ideas, that can scare you because of their size and complexity but often are the new groundbreaking discoveries and they turn out to be very successful! The saying “Dream Big” exists for a reason! 

• Hard startups

Isn’t it weird how it’s easier to succeed with a startup in a niche with a lot of competitors (hard startup) than with a startup on something brand new (easy startup)? Well, it may sound weird, but it’s not weird at all. A good hard startup, if it provides great value “hidden” in a solution that’s different and better than the existing ones, will succeed for sure. It’s hard to get to that point, but if you make it, you’re the next big thing! While on the other hand, easy startups are easy to create but very difficult to make successful because there is probably no real need or a problem behind it, or people just don't care enough to have this problem solved.

How to generate startup ideas? 

Again, you don’t want to force your idea. If you force it, your mind will be so desperate to find it, that even a really bad idea can start to seem like a good one. And probably it is not! The best way to get startup ideas is naturally, organically. Notice them while commuting to work, while traveling abroad, while walking in your city, while searching the web… Let them come to you. Of course, as we said, first you need to learn how to recognize that ideas. And then just be on the lookout for those ideas! You need to notice what is the world missing!  

• Your wishes!

Think of a product or a service you would already love to have. For example, the founders of Trivago were thinking that it would be really useful to them to have a website where they can search the city they are traveling to and have a simple overview of the best hotels in that city! So that’s how they built Trivago! Sometimes, you can think of a startup idea based on your own needs! 

• Can it fail?

What if your idea fails in a couple of years? Would you still be excited about working on something like that? Would you be truly passionate about that? Take Lilium for example. Lilium’s idea is to build a 7 seat electric airplane that would be used as a fast way to go from one place to another. Do we have something like that already? Is it proven to be successful? No, that area is still unknown. But Lilium’s founders are really passionate about making that happen and will give it a shot.  

• World changes

Take a good look at the world around you and notice what has drastically changed. Is there a good startup idea related to those changes? We all are going through a world pandemic right now, that’s something no one currently alive has been through. That left a lot of changes in all aspects of life. Think about that. 

• Recent success

Look for companies that made it, that are successful now. They have their own business model and their own market where they are successful. But can you find a new variant of that business model? Can you use that idea and make it successful with your own changes that would adopt it to a bigger or adjust it to a smaller market(niche)? But right away here’s a quick heads up - this is not the best way to search for startup ideas. Some of the ideas that were made this way are really successful, don’t get me wrong. But often, this is a solution in the search of a problem.  

Final words

The world of startups and technology is exciting and fast-paced. It’s a part of the business world that’s soo different. Culture, company processes, structure, the way the people feel about it. It’s all soo different than the corporate world. To embark on this journey, you will need to be creative, brave, smart, passionate, and confident. You will need to program your mind to a different way of thinking and seeing business opportunities, and most importantly - solving problems. This is a world where you need to invest a lot in yourself in order to be capable of pulling it off. You won't really know if you will succeed and you will need to be willing to invest a lot of your time and money in it.

If you have that one idea you feel strongly about, but you are still in process of researching it (which you should definitely do) feel free to give me a call. I am more than happy to help you out.