How to come up with a startup idea?
Grzegorz Papaj, 16 December 2020
In many people’s opinion, a good idea is the foundation for a successful startup. This statement is only partially true because good implementation is also necessary. Laymen usually tend to forget about this and overvalue their ideas. This behavior is probably caused by the fact that among the most spectacular startups, a large part of them launch a new level of quality thanks to an innovative and brilliant new idea. Nevertheless, many successful startups aren’t based on revolutionary ideas at all.
Kinds of ideas
Enormously simplified, all ideas can be divided into several main categories. Below are listed the most important ones.
Some startups launch on the market a completely new product, unlike anything available before. Such a product has a chance to become a market standard. This category of projects has a relatively high risk, but it precisely stimulates the imagination of the masses the most, because such ideas sometimes achieve spectacular success. This only happens in a small fraction of cases. Facebook can be a good example here..
Some ideas offer something that is already known on the market, but “made better”. When it comes to such projects, everyone must take into account the competition and usually quite a tedious process of building up a market position.
The category in which the foundation of an idea is to use pre-existing solutions and combine them in a new and brilliant way – an example of which may be the revolution that Apple introduced in the form of the iPhone. Currently, there is an increasing number of ideas connected with IoT possibilities.
Some ideas are based on a very precise diagnosis of a problem that was often not noticed by anyone else before (or no one considered it worth solving) and providing an effective solution.
How to come up with an idea?
The vast majority of the best ideas come from careful observation of the surrounding reality and finding space for improvement in it. The assumption is that we are most likely to find an interesting idea in an area in which we are experts because, for quite obvious reasons, an attempt to improve a process about which we have only a vague idea has little chance of success.
Some believe that the best ideas have to come by themselves, others say that coming to a good idea is a sometimes long creative process that requires work and patience. Each side has its own reasons and arguments, so perhaps the right approach depends on the person.
But no matter the way, it is only the beginning of the road. Each idea should be constructively criticized and, if it fails, release it without regrets. Finally, remember that the idea does not need to be the most important, and the idea of a startup does not need to be innovative. Sometimes it is enough to improve an already existing solution, adding new valued features.
Idea and value
Unfortunately, experience shows that people have a tendency to overvalue their ideas. A new idea is often associated with big enthusiasm that needs to be tamed with a healthy critical approach. Defining value is the easiest way to do that.
The word “value” means a new quality given to users and their life by way of a product. It doesn’t necessarily represent a financial value, but more about this below.
Value is key to the success of an idea and supports the expectation that users will act willingly. Of course, it might be a payment for the service, but most important are other forms of involvement, like taking certain actions or providing certain data. Value is what prompts the user to “pay” in one form or another.
Bear in mind, that the value must exceed the costs. Therefore, users need to know what they will get in return for their contribution. However, before a potential customer has a chance to think about the profitability of the offered product, it must understand it. From this we can infer that the best ideas are the easiest to explain, that is, easy to present the value they bring. A simple idea is easier to explain and a better-understood value is easier to sell. Yes, we have to gradually start thinking about marketing and sales, even at the envisioning stage.
At this point, it is worth noting that private clients expect different values than business clients. Therefore, the decision to choose between B2C and B2B should be made from the very beginning. Not making this decision at the beginning of the startup’s path is a serious mistake because the fundamentals of business require defining the target group as precisely as possible. The B2C model usually affords a slightly more “fancy” approach. For example, users can appreciate your application because it is “cool” (as is the case with most games), but the business client translates everything into money. For example, if a product saves 5% of an employee’s time, this is a material value that can be calculated. This kind of calculation must be made in order to sell a product
Can it be done?
In the case of technology products, the readiness of the product to be developed also needs to be assessed. Without engineer experience and knowledge, it can be a very difficult task. This is the right time to start looking for an IT partner or consulting company in the technology industry. Don’t be surprised if the expert says “I don’t know, I have to analyze it and get back to you after I check”. Sometimes this may be necessary. When it comes to software products, creating a Proof of Concept for someones’ idea can be a relatively short (and cheap) task, but in the case of hardware, the long process of verification has to be taken into account (as well as the higher costs).
Initial verification of the idea
When the idea is already refined, verification becomes a more crucial aspect. Verification in various forms will always be needed through the whole startup building process, from the idea through to its successful development.
Verification can be difficult not only for practical reasons (because sometimes the process of concept verification can be quite complicated) but also for psychological reasons. The verification implies the possibility of rejection for an idea or even a product.
Our observations persuade us that verification is most difficult at the very beginning. We repeatedly had clients who were very emotionally attached to their ideas. The rejection of the idea or its resultant product is, in some ways, a form of failure. However, it is better to reject the project at the beginning than after investing in its development. That’s why it is so necessary to accept constructive criticism at this early stage.
Do not forget that idea rejection doesn’t mean giving up on it forever – some projects wait until they mature until the world is ready to create or use them.
Let your product mature
Until the first verification is complete, there is no need for help. Time and deep thinking about the idea are enough at this stage. A new idea always seems to be great and revolutionary, but after a couple of days can be seen as less interesting or even not at all.
Rushing isn’t a good thing for the project. The idea is only the beginning. Try to thoroughly think it through before showing it to the world. An even better approach is to write down an idea. The process itself will help to organize thoughts and ideas. Besides this, the solution description can be also valuable in later conversations and negotiations with contractors and investors.
Talk about the idea
Every business idea should be discussed many times with various people. This is another important form of idea verification because discussing it helps to clarify an idea, learn how to talk about it, define its pros and cons, and get valuable feedback from its intended users.
Firstly, talk about the idea with your closest associates, then reach out to other people as they might be more objective. Constructive criticism at this stage is very crucial and significant. Indeed, such a project can change its owner’s life.
Try to search for startup events (formal ones are better), join discussion groups dedicated to businesses and startups. This knowledge about the startup environment is very valuable, even if the startup doesn’t want to share its idea with others. Such a community can be a source of much interesting and significant information and advice. And here arises the thought – “what if the person to whom I tell about my idea uses it and develops it?”
Many people who intend to create a startup, have a fear that someone will try to steal their innovative ideas. In other words, someone will beat them at developing the product and conquer the market without any appreciation and contribution of the author.
If you also fear such a thing, do not. From our experience such thinking is unfounded. Startup environments say that “it is not the idea that counts, but its implementation” and ” ideas are cheap, implementation costs”. It is worth taking these two opinions to heart.
A great example can be the very well known game Angry Birds from which a huge franchise has grown. Now imagine that you explain it to someone that never heard of it. You say “you shoot birds with your slingshot to destroy pigs hidden in various constructions”. Does it sound like a project worth millions that someone would like to steal? So what made this basically simple game successful? Just the implementation. A whole lot of details make the game desirable to its players.
In practice, the concept is very rarely stolen. Indeed, if the idea is brilliant, then with time it will motivate some competitors who will want to copy it. But at this point, the original idea is already in the form of a finished product. At the stage of the idea, there is already enough work to do without also bothering about some things that are rather unlikely to happen.
Safety of ideas
Sometimes a startup can provide a minimum safety for ideas. In some cases, a startup can patent, but only a certain solution or product, not ideas, themselves. For example, no one can patent a concept of a time machine, but a device that works can be. Unfortunately, the process of securing intellectual property, such as by patenting, trademarking, or servicemarking is quite long and costly.
Another approach to safety used mainly at the project implementation stage, are non-disclosure agreements (NDA). Singing such a document is a basic procedure to prevent the uncontrolled spread of information about it. Bear in mind, that agreements available on the Internet, especially those with contractual penalties of one million euros, do not have to be taken seriously by potential contractors.
We hope you find every piece of advice in this article helpful and useful. If you would like to find out which next steps a startup should take, as well as the related risks, we encourage you to subscribe to our newsletter.