If you want to start a business but you’re struggling to come up with a great idea...
Here’s a tactical approach for idea generation:
Here’s a tactical approach for idea generation:
This approach leverages one of my favorite business frameworks:
Clayton Christensen’s Model of Disruptive Innovation
In simple terms, it says that innovators can win market share by serving a segment of the market that is over or underserved by the big incumbent’s offering.
Clayton Christensen’s Model of Disruptive Innovation
In simple terms, it says that innovators can win market share by serving a segment of the market that is over or underserved by the big incumbent’s offering.
Basically, upstarts can win market share by serving one sub-segment of a big market extremely well.
Provide the exact level of product/service needed and use it as a wedge to expand.
Ok, now let’s get tactical.
Here’s how you can use the framework to generate business ideas:
Provide the exact level of product/service needed and use it as a wedge to expand.
Ok, now let’s get tactical.
Here’s how you can use the framework to generate business ideas:
Step 1: Identify a Big Market
Start broad and pick a market.
You should generally try to pick a market you know something about—though operating in it, investing in it, researching it, etc.
Make sure it’s a big.
Examples:
• Banking
• Insurance
• HR Management
Start broad and pick a market.
You should generally try to pick a market you know something about—though operating in it, investing in it, researching it, etc.
Make sure it’s a big.
Examples:
• Banking
• Insurance
• HR Management
Ideal markets are both big and inefficient.
As a simple rule of thumb, if you’ve experienced stress in your interactions with a market, it’s a fair assumption that it’s inefficient.
Financial services (banking, insurance, etc.) is a great example of a big, inefficient market.
As a simple rule of thumb, if you’ve experienced stress in your interactions with a market, it’s a fair assumption that it’s inefficient.
Financial services (banking, insurance, etc.) is a great example of a big, inefficient market.
Step 2: Identify an Underserved Niche
Sketch out the components of the value chain within the market.
I find it helpful to actually sketch it out—it makes it easier to visualize and find openings.
Research the sub-segments and identify niches and communities within the market.
Sketch out the components of the value chain within the market.
I find it helpful to actually sketch it out—it makes it easier to visualize and find openings.
Research the sub-segments and identify niches and communities within the market.
Reddit is a great tool for identifying fervent micro-communities. It’s a legitimate treasure trove of ideas.
Twitter is another useful tool for this research.
The goal of this research is to pick a niche that is over or underserved by the incumbent offerings.
Twitter is another useful tool for this research.
The goal of this research is to pick a niche that is over or underserved by the incumbent offerings.
A few examples to bring this to life:
Business banking is a big market. Startups are a niche that is underserved by standard banking products.
Business legal and tax is a big market. Creators are a niche that is underserved by standard business legal and tax management.
Business banking is a big market. Startups are a niche that is underserved by standard banking products.
Business legal and tax is a big market. Creators are a niche that is underserved by standard business legal and tax management.
Step 3: Talk to 100 People in Niche
Go talk to as many people as possible within that niche. Find them on LinkedIn, Twitter, etc.
Ask questions:
• What are your pain points?
• What causes stress?
• What do you wish you had?
Log responses—tag key identifiers to consolidate.
Go talk to as many people as possible within that niche. Find them on LinkedIn, Twitter, etc.
Ask questions:
• What are your pain points?
• What causes stress?
• What do you wish you had?
Log responses—tag key identifiers to consolidate.
Step 4: Compile Data & Assess
After logging the responses from all of your calls, zoom out and assess the results.
With a large enough N, common themes will appear.
What are the biggest stressors for your niche?
What are the pain points that incumbents aren’t solving?
After logging the responses from all of your calls, zoom out and assess the results.
With a large enough N, common themes will appear.
What are the biggest stressors for your niche?
What are the pain points that incumbents aren’t solving?
The stressors and pain points that rise to the top are your business ideas. Let the data guide you to water.
This general approach has worked for tons of unicorns and high-flying startups.
If it worked for them, it can work for you.
This general approach has worked for tons of unicorns and high-flying startups.
If it worked for them, it can work for you.
To summarize the approach:
(1) Identify big market
(2) Identify underserved niche
(3) Talk to 100 people in niche
(4) Compile data and assess
Give it a shot and let me know how it goes.
Follow me @SahilBloom for more threads on business, startups, finance, and growth!
(1) Identify big market
(2) Identify underserved niche
(3) Talk to 100 people in niche
(4) Compile data and assess
Give it a shot and let me know how it goes.
Follow me @SahilBloom for more threads on business, startups, finance, and growth!
We cover a lot of idea generation on my new podcast—Where It Happens.
You’ll learn something new every single episode. I know I do! podcasts.apple.com/us/podcast/whe…
You’ll learn something new every single episode. I know I do! podcasts.apple.com/us/podcast/whe…
As always, remember:
Ideas are cheap, execution is expensive.
More on execution coming soon…
Ideas are cheap, execution is expensive.
More on execution coming soon…
• • •
Missing some Tweet in this thread? You can try to
force a refresh
