How to come up with a million-dollar startup idea
So, you want to build a startup. Do you think you have a million-dollar idea?
All projects or products start with an idea. The idea itself can have value, although the execution is important as well.
You can get the startup idea while you are talking to people, or if you get annoyed with some work that you hate doing, or even in the bathroom taking a shower. Mostly you can’t control it, and inspiration sparks out of nowhere. However, how can you push it a little bit?
When I was studying at college, I had quite some “free” time. I knew I would like to work on a project (startup), but I didn’t have any fully formed idea in mind. I had some notes, but I was not sure if it was worth it to work on them. I was so confused and indecisive that I didn’t finish anything.
After a while, I founded a dev company called Lunadio to help others realize their ideas. While this was satisfying to me, I was still waiting for the big startup idea to show up.
It took some time for me to find out it doesn’t work like that. I realized I couldn’t wait for the million-dollar idea forever. When I want to work on my project, I need to start with something already.
But, what project idea should it be? I needed a way to sum up all ideas I have across fields and choose the best one. I did a workshop inspired by Othmane with my friends. The main goal was to pick potential ideas that we/I can build.
I wrote this article for those who would like to build a project but don’t know what it’s supposed to be. I want to present a process of how to come up with startup ideas. How to manage them, rate them and, in the end, select the best one to build.
Startup Ideas Workshop
Many things are going on around us in our job, school, home, or just on a casual day. We are solving problems all day long. Some of them might be experienced by other people too, and that’s where the million-dollar idea is hidden.
People are willing to pay to solve their problems. If you can find that niche and create a solution, you might have a business.
The way to get startup ideas is not to try to think of startup ideas. It’s to look for problems, preferably problems you have yourself. The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing.
(Paul Graham, Founder of Y Combinator)
Let’s start with the exercise.
Step 1: Get a list of problem sources
It might be your actual or previous jobs, school, home, hobbies, past projects, basic life, etc. Get as many sources as you can. I suggest having at least five sources.
Step 2: Create a template
You need to define the parameters you want to track for each problem. Below is my list of parameters, but feel free to add/remove anything as you wish.
Title: Name of the problem.
Description: Short description everybody can understand.
Category: Choose one or more problem categories from the list below:
- time-consuming: it takes to much time to do the task
- too complicated: it is too complicated to do the task, you have to use multiple tools or hacks to do so
- hate to do: task you wish someone else does for you
- unused tools: software or tools your boss is paying, but you are not using it
Do you think other people have the same problem? (YES/NO)
Do you know anybody having that problem? (YES/NO)
Would you pay someone to solve the problem? (YES/NO)
Step 3: Get all the problems on the paper
Now it’s time to take a pen and paper and write it all down. We used a whiteboard and colored sticky notes to identify who put the problem on the table. But you can use anything you want – a spreadsheet or a kanban board. And because I love Trello, I created a board you can copy and use by yourself: https://trello.com/b/bYJ8wYeA/startup-ideas-workshop
Me and Semy doing workshop trying to find the million-dollar idea
The goal of this exercise is to get as many ideas as possible. So even if you are not sure and think the idea is worthless, just put it there. You can get rid of it later during the ideas’ valuation process.
I suggest dedicating at least 1-2 hours for this stage. Don’t rush it. Even if you get a great idea or find a problem, that you think is worth solving, continue, and add more stickies on the table.
Million-dollar idea valuation
I suppose you have at least 10-15 ideas to work with. If you have an opportunity to discuss it with somebody, do it. Present your ideas to others, get quick feedback, and update the values based on that. In this stage, you can get rid of ideas that you know won’t work base on the feedback or your personal feelings.
After the discussion and quick update of the ideas, you can move on to idea valuation. I think this part of the process is the most complicated. Because it is not just about numbers. You might like some idea more than others, and of course, any rating is subjective.
We took advice from Jon Yongfook and here is how we did it. We created a spreadsheet with all the ideas we came up with, and we set some parameters to rate the ideas. Each parameter has a value from 1 to 3, and again, it is very subjective to determine how important is each parameter. They might not be of equal importance to you, but we decided to give them the same range of values to simplify it.
List of parameters:
- Hair on Fire Factor: How big is this problem actually?
- Access to Market: Can you sell your idea to the market?
- Day 1 Revenue: Is it possible to charge for the solution from day 1?
- Revenue Scalability: How big it can get?
- Defensibility: How difficult will it be to copy your idea?
- Lack of Competitors: Is there somebody out there working on it?
- Personal Know-how: Do you have any know-how in the field?
- Unfair Advantage: Do you have something special that your competition is missing?
- Ability to do: Are you able to execute this idea?
- Acquisition Potential: If it gets big, do you think it is a project somebody will be interested in buying?
I created a Google spreadsheet that you can copy and use for the valuation.
I hope you find this workshop useful, and in the end, you come up with some potential million-dollar ideas. It helped me to start my project of interactive presentations. But remember, it is not just about the idea; the critical factor is the execution. You probably end up pivoting the project based on the received feedback. So don’t spend much time thinking about the project you can do but just start with something. Try to bring value for the customer and deliver a minimum viable product as soon as possible. Gather feedback from as many people as you can and iterate.
If you want to know how to get and manage the feedback from your customers, you might want to check out this article.
If you got any recommendations on how to improve this workshop or if you want to share your outcome, just let me know. I will be happy to hear from you.
In the next blog post, I will show you excellent examples of how to validate your ideas before going all-in on the project.