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How to Come Up with An Incredible Business Idea (And Validate It)

by Sean Ogle | Last Updated: November 6, 2013

“I’d love to start a business, but I don’t have any good ideas.”

I call BS.

If you don’t have any good ideas then you either are sitting in bed all day doing nothing but staring at a wall or you’re just making excuses because you’re too afraid to actually start building something for yourself.

Everyone has problems that they’re looking for a solution to. You can’t walk down the street without finding dozens of things that could be fixed, upgraded, or changed. And where there are problems, there are solutions waiting to be found in the form of a new business.

Hell, I’m sitting at a coffee shop right now, and I could come up with multiple business ideas that would make my life easier:

This list took me seriously 45 seconds to come up with.  Are any of them actually worth pursuing? Maybe, maybe not, but the point is once you train yourself to be looking for problems to solve, the concept of not having any ideas becomes non-existent. Rather you become overwhelmed with so many ideas that the hard part is choosing which one to focus on.

Learn to Love Uncertainty

In my TEDxCMU talk I talk about the 3 phases of uncertainty.  The first is fearing it. You’re afraid of change, so you do everything you can to avoid uncertainty. The second is overcoming it, when you overcome your uncertainty you might still be terrified of what you’re doing, but you take the leap anyway. You recognize that if you don’t make a change, you won’t get the things you really want out of life.

The third step though, is embracing the uncertainty. When you treat uncertainty as an asset and you embrace it you realize that the future doesn’t exist yet.  You can shape it however you want, and anything can happen.  When you’re walking through the world with this frame of mind, everything becomes an opportunity.

This is what sets entrepreneurs apart from others.

Entrepreneurs are constantly looking for problems to solve, and willing to act on them. Employees embrace the status quo. – Tweet This

Step 1: The Brainstorm

If you’ve decided you’re ready to stop accepting the status quo, and start helping yourself and your potential customers, then let’s get going with this.

There are all sorts of ways to come up with ideas for a business, sometimes you just need a little push in the right direction.

Often the best ideas are the ones you already have but just don’t realize it, or haven’t spent enough time thinking about it to full develop the idea.

Action: What do you like to do? List at least 25 things.

Could be as simple or complex as you want it to be. For instance, it could be basic “I like playing golf”, or complex, “I like drinking South African wines while playing cribbage with my wife.”

Keep your list handy so when new ideas come to you, you can add to it.

This is going to be your reference point. While you don’t always have to start a business around something you like, you’ll be more excited to work on it and make more progress if it’s around something you enjoy.  Everything can be improved upon, so there’s no reason why you can’t pursue a business focused on something from this list.

Action: Take a “problem walk” with a pen and paper

I can hear you now, “what the hell is a problem walk?”

It’s a one hour walk, where all you do is look for problems and solutions.  Take a pen and paper with you and walk around your city.  Notice everything, the people, the buildings, the ads, the clothes, the noise – everything.

Write down all of the problems you see. While you’re doing this, what you’ll find is you start thinking about other areas of your life where things could be better. Write those problems down too.

When you’re done, you’ll have a massive list of problems. Sit down and start writing out solutions to each of the problems you see. Try and come up with three for each.

Many of these will never turn into business ideas, but it’s important because it is training you to look for problems/solutions in your day to day life.

Action: Talk to 25 People About Their Problems

The last part of the brainstorm phase, idea extraction, is also the most important.  This is where a lot of your best ideas are going to come from.

I learned this from Dane and Andy of the Foundation. When it comes to finding new business ideas, few people do it better.

How do they do it?

Cold call.

Yep, they will call up people in a variety of niches and simply ask them questions about what problems they’re facing.

Weird, right? Well you’d be surprised at just how well it works. Here’s an example of how someone might go about this.

By having other people (potential customers), tell you exactly what problems they are having, you’re able to start building out ideas for solutions.

If you get one person who’s say a realtor and they have a 2 key problems with their business, then you can call another realtor and suss out if they have those problems as well.

By the time you’re done talking to a handful of people you’ll have a very clear idea of what problems you can solve for these people.

So to summarize:

  1. List out things you like to do
  2. Take a “problem walk” and start coming up with solutions
  3. Talk to other people about what problems they are facing in their job/business

Step #2: The Lifestyle

Ok, so you’ve got a big list of potential ideas and businesses now.

Before you go any further though, it’s important to think about something that’s often overlooked.  It’s amazing that more people don’t think about this, because the path you go down will be entirely different depending on what the answer is.

And this is: what kind of business do you want?

It’s easy to just get going and throw out ideas, but if you want to be ultimately successful you should have a clear understanding of what the end goal is.

Do you want a lifestyle business that may not make you rich, but gives you freedom? Do you want to raise funding and have a traditional startup? Do you want a brick and mortar building focusing on a local community? Do you want to ultimately be the boss or simply create a job for yourself?

All of these are crucial to how you proceed.

For me, freedom is paramount. I’d take less money, as long as I can do whatever I want, whenever I want. Don’t get me wrong, money is great, but time is greater.

For this reason, I’m not rushing out to get VC or angel funding for any of my new business ideas. I want to retain ownership and be the boss.  I want to be able to take off for Bangkok on a moments notice. All of those things are important to me, and because of that I’m not trying to build a big business with lots of employees.

Action: Write down in a few paragraphs what’s most important to you. What does success look like, and what will your life be like when you achieve it?

It’s amazing how many people simply don’t know what they want. They don’t know what “success” is.  This exercise should help add some clarity.

Step #3) The Validation

You have a huge list of potential ideas, you know what kind of business you want, now for the the final piece of the puzzle: how do you validate your ideas and find one that really has potential?

Well, we’ve already talked about one, cold calls.  If you go through the idea extraction process that we mentioned earlier, that is both extracting ideas and validating them because you’re talking to actual potential customers.

If you talk to ten real estate agents and all ten of them tell you that they wish there was a better system for finding new homes to list – then you know you’ve got a potential business on your hands.

This is one of the most effective ways of validating an idea, but what are some other ways to go about it?

Facebook/Adwords

If you have an idea for an online product you can use Facebook or Google ads to get a sense of whether or not people are actually interested.

Personally I’ve used Facebook to build up a social group around golf, and then use the engagement numbers for various types of posts to see what people are really interested in. This is great if you know you want to go into a certain niche, but still aren’t sure about the details.

If you want to get more direct feedback create an ad to a landing page where you talk about a product that’s coming soon.  Have an email opt in where they can be the first to hear about it and get a discount when it launches.  If 50% of everyone that clicks  through is signing up for more information, you know you’re on to something.

Survey

Do you already have an audience and want to see if they’re interested in a certain product? Give them a survey to do.  Surveys can be tricky, because people don’t really know how they’re going to react to something until an actual offer is presented.  Structure your questions in a way that gives you tangible information that you can act on.

If you ask would a question like “would you rather have option a, option b, or neither” that’s actionable if the majority answer the same thing.  Asking “what would you pay for this product” is one that has the potential to be fraught with mis-information.

Before I launched Location Rebel I sent out a survey and asked the following:

How much would you pay for a product like this (Location Rebel)?

Out of around 100 responses, 2 people said $250+.  When I launched a few months later with an original price point of $297 I sold out all of my beta spots in 48 minutes.

So take your survey results with a grain of salt.

Google Keyword Planner

I know people who have built 6 figure businesses all because they spent an hour doing keyword research using the Keyword Planner. If you can find ideas for keywords related to your product with relatively high traffic and relatively low competition, then it becomes feasible you can use search as an effective way to find customers and sell your product or service.

Search is changing (and has changed) a lot, so this is just one bit of information that can help you get a sense of the feasibility of your idea.

Minimum Viable Product (MVP)

Do all signs point to a great product that lots of people want? Awesome, but you don’t have to bet the farm on it right away.  What’s the minimum viable product that you could create and sell? Start with that.

There are all sorts of ways to do this and many of them are inexpensive and can be done pretty quickly.

For instance you could start with KickstarterHave a few prototypes or outlines of what you want to sell? Put it up on Kickstarter and let the public decide.  This is what my buddies Nick and Tim did – and in less than a week they’ve made over $100k.

If you’re looking to build out an information product or membership site, you could put together a forum, shopping cart, and some premium content in a week and have something to sell. This works best if you already have an audience you think might be interested in the idea.  Put it out there and if people buy, spend a few months building it out and use your founding members to get feedback.

So, Are You Ready to Stop Making Excuses?

If you follow the steps listed out here, you should have no more excuses for not having an idea.  Make the fundamental shift in thinking where you start looking for problems, solutions, and opportunity. By doing this, the problem will never be not having a good idea, it will be deciding which one to invest your time and energy into.

If you’re serious about starting a business check out Location Rebel. We help you learn the skills necessary to build an online business that can be run from anywhere on Earth. We’re with you every step of the way.

Image Credit: Inspiration from Big Stock

Sean Ogle is the Founder of Location Rebel where he has spent the last 12+ years teaching people how to build online businesses that give them the freedom to do more of the things they like to do in life. When he's not in the coffee shops of Portland, or the beaches of Bali, he's probably sneaking into some other high-class establishment where he most certainly doesn't belong.
Build a Lifestyle Business Giving You Freedom You've Always Wanted

Our 6-part course gives you a strategy to start right now. Put control of your life back in your hands. Sign up below and let’s do this together.

By entering your email address you agree to receive emails from Location Rebel. We'll respect your privacy and you can unsubscribe at any time.