Every startup needs a realistic idea. In the beginning, every opportunity looks like a billion-dollar idea. But, when you go deep down into your research and start asking questions, you realize the actual worth of your product. According to a report from CB Insights, 42% of the 101 startups they studied failed due to a lack of market need. By following the process of identifying and shortlisting a bunch of ideas will save you time and money. Let’s learn how to shortlist startup ideas.
Everyone who wants to become an entrepreneur should know that an idea means real-world problems. Solving a real-world problem for a positive change in human lives is a great business idea. Now, get out of the imaginary idea ride and start digging deep into the real world.
For example, you work in a multinational food chain company. It has more than 3,000 franchises all over the world. Your job is to collect the sales & marketing statistics of all 3,000 franchises and compile them every day. You receive 3000 excel sheets every day. Later on, the upper management takes strategic decisions based on the revenue generated by sales and the amount spent on marketing. Now, you know the process, and now we will look for the flaws in here.
How to Identify a bunch of startup Idea
There are three ways to identify a startup idea. These include finding ideas through your problem, ideas from someone else’s problem, and solving a problem in a better way. We will discuss all of them one by one now.
Identify Ideas from own problems:
We already have a scenario where you work for a well-established food chain company. If you look closely at your job, there are many problems that you can encounter. Dealing with 3000 excel sheets every day is too much for the human brain. There is a possibility that you might accidentally use the same data more than once. You might not receive the data on time, or the data received is faulty. You find working in the same pattern every day is tedious and nothing to learn.
You see, you have encountered so many problems that you go through. You could build software that allows the franchisee to put their daily sales and marketing figures. Here, you do not need to compile the data, and the risk of using the data multiple times is not there.
Similarly, you can also try to figure out the problems you see. I hope you have understood how you should look into opportunities and generate startup ideas from them.
Solve others’ problems:
Taking the same example, now our focus is finding problems for other people. We will assume that we ran out of our problems, and hence we are moving towards trying to solve others’ issues. While talking to the franchisees, we find out that the franchisee employees are frustrated by entering the revenue data every day, and sometimes they make errors. Similarly, upper management is tired of making charts of the total sales and marketing expenses.
You have encountered problems that are causing errors and consuming the time for an organization. The simplest solution would be building software that generates bills for the franchisees and auto calculate the revenue. On the other hand, the marketing team can put the amount spent for marketing purposes. The software then compiles all the data and presents it beautifully in pie charts, histograms, and whatever you say.
While identifying others’ problems, you need to understand the market. We will discuss this point later while talking about shortlisting the idea. Here you spoke to people near you and identified the problem. But what if you run out of problems? Here is the 3rd way of identifying the business idea that comes into the picture.
Build Better
Every product in the market has flaws that need modification. Entrepreneurs find these flaws as an opportunity and try to grab the market. Some people might call it copying the idea, but there is no shame in building a better product. In the beginning, I had mentioned that the problems are ideas, and entrepreneurs should look forward to solving those problems.
In our example, there is a possibility that an existing software already exists, but still, you can find some flaws that can change the entire workflow. You could build software that can track live sales. The franchisees can track their sales target, upper management can take decisions based on the live reports, and other creative ideas.
I am trying to convey that there is no harm if you build better solutions to an existing problem. Most entrepreneurs think that the idea should be unique, but it is a myth. When you work on an existing idea, you know the problems encountered by your competitors. You have more information on the product. In simple words, building a better product means working on tried and tested ideas. I hope that you now have plenty of ideas that can solve the problem of the real world. But, it is impossible to solve all the ideas that you have. Some of the ideas might need skills that you lack. Working on ten different ideas will lead you nowhere. And hence you should shortlist your ideas once you identify them.
Shortlist the final Idea
I hope that you must have identified a bunch of problems. It is time to shortlist the final idea for your startup. To do that, we must check if the problem is worth solving or not. More importantly, is it going to make money or not? Two parameters will help you to decide your final idea.
Size of the problem
The idea you have just figured out should be a common problem. For example, you want software that can take care of 3000 excel sheets a day. But, how many companies are there who need this kind of software? Are there enough companies who would buy your software? Are there any competitors? The point is, the problem you are solving should be big enough that it serves a good chunk of people. It should not be limited to only a very few people. Working on a limited-sized problem will result in stagnated growth. After a point, you will not be able to expand the business. It will even get worse if any competition starts market penetration. One should immediately drop ideas that do not have a large audience.
Required Skills
Honestly, every day I see problems I wish I could solve. But honestly, I don’t have enough skills to solve them. The same goes for your startup idea. Even though your idea might be great and the size of the problem is big enough, it will require skills that solve the problem. For example, you are a coder who would like to make a sales & marketing report software. But, if you do not know about sales and marketing, how companies use them, and how that helps a company in decision making, you cannot code the logic of your software. So you must have the required skills to build your product. Or, you must know somebody who can do it for you. Generally, it is not good to depend on someone else for the core skills. It can work out if you are a team and the working person is a co-founder. So, you should work on an idea only if you have the required core skills.
Conclusion
You can find ideas by solving problems around you. Another way is by solving the problem in a better manner. Once you have identified a suitable business, you should start digging into it. You should research the market size of the product and the required skills to build the product. This is how you will know which ideas are for you and which ideas you should drop. Most people fail after spending months and years due to a lack of research in the beginning. I hope this article has added value to your journey of entrepreneurship. Please feel free to share this with your fellow entrepreneurs.