How to find profitable business ideas
Many smart people I know want to start working on a side project but struggle to come up with an idea they think is worth investing any time in.
We're constantly told that the best products come from "scratching our own itch", which I tend to agree with... up to a point.
For a lot of people personal pain might not be something that has legs commercially or may not be what you’re looking to invest your time and effort in.
So, I wanted to share a simple framework I use to come up with commercial ideas for products.
How to find good ideas?
Finding ideas for products that solve real world problems is simple: ask people about what real world problems they experience every day at work.
Or as Julie Zhuo, VP of Product Design at Facebook puts it:
To find ideas, find problems. To find problems, talk to people.
So, let's dig into this a little more. The best place to start is by surveying medium sized businesses and recording which processes each department is still managing using spreadsheets or email.
This is actually how we came up with the idea of TinyTracker, a simple issue tracker the whole company can use.
If you think about it, many well-known companies just replace email, spreadsheets or both!
Is it a real problem?
As you start to interview people and compile data about processes that still use spreadsheets and email, you also need to understand to what degree this process is a problem.
Let's face it, spreadsheets and email have stood the test of time for a reason; they are good tools for a lot of tasks.
What you are looking for is people using email or spreadsheets out of necessity because there a better tool in the market dedicated to improving that process.
So, for each answer you receive, ask how they would feel if you provided a product that improved the process, saved them time or automated the task?
Ask them to score each answer you recieve from 1 - 5.
1 being a "nice to have" and 5 being a "life saver"
You want to survey as many people as possible across multiple companies and business units until you start to fill out your spreadsheet with pain points and a score of how much people want this pain solved.
Remember, what you are looking for is not supposed to be sexy, it is supposed to solve a real pain point for businesses.
How to choose the right idea?
You should now have a spreadsheet full of pain points and a corresponding "score". Order your answers by "score" and see which process was the "most painful".
Did more than one person raise something in your survey?
Are there competitors or businesses doing a similar thing? This is a good sign that a market exists and can support a company.
Remember, you don't need to be the only player in a market, but just the best in your niche!
You will, of course, need to do much more in-depth validation of your idea, but we can worry about later.
At this point in time, we're still just trying to come up with some good ideas for real-world products.
Leveraging your existing experience
Now that you have narrowed down your list of potential ideas, it's time to look at your own experience.
Do you have an insight into a niche or vertical? Do you already have a mailing list or network for a specific industry?
Even if you don't have any expertise in a particular industry, I would recommend not going for a vertical that you have no idea about.
Another thing to consider when trying to find viable ideas is your network.
Do you have a lot of followers on a blog or social platform?
Is your LinkedIn full of contacts who would be interested in being early adopters of your new product?
These could be the first people you market your product to!
These are things you should take into consideration when deciding on what to invest your time and effort in.
So, with that said, you should be looking for an idea that falls at the intersection of your experience, your network and the highest "scoring" problem from your survey.
But hold on, I hear some of you saying:
"well, that's great if you have an existing following, but I have 4 followers on Twitter, one of which is my mum, how can I use your stupid framework?"
Well, this framework still works well with just 2 factors.
Once you have chosen some ideas to test out using this framework, you should set about validating the idea before writing a single line of code, buying a domain or putting up a landing page, but that is a topic for another post.
I'm interested in what you come up with. If this framework helps you find an idea for your project, please let me know or if you have any questions don't hesitate to ask below in the comments!