One of the most asked and difficult to answer questions I get when I speak to MBA students is “How do I get the right idea to start a business?” In approaching a reply, I would say at the outset, that there are no simple magical answers or formulas. I would add that most successful entrepreneurs never planned to start the business they ended up founding. Ask this question to any business founders you meet or know. I know this is true from my experiences starting companies. All were opportunity driven, which I will more fully explore later.
A great many would-be founders can’t get past the idea formulation stage. Most are stuck because they are intent on finding a Blockbuster idea that will create or transform an industry and give them big bucks. They are already visualizing themselves ringing the bell to start the day’s trading on the NY Stock Exchange when they go public. These thoughts and dreams can blind you to the many good opportunities that inhabit your space. The fact Is that most businesses are founded on a very mundane idea that mostly already exists. These ho-hum ideas that transform into a successful business are not founded on brilliance but on a partial combination of timing, need, knowledge, work ethic, confidence, people skills, relationships, and execution. Notice I didn’t say money, which is not necessarily a prime ingredient. Of course, money can’t hurt. Thinking of the game of Scrabble might help, where you add one letter to an existing word, and you get full credit for the other person’s word. You don’t have to re-invent the wheel.
Here are some thoughts on finding that idea to start you on a path to your own business.
- Mindset. This is not a scientific approach and may be elusive to get your arms around securely. However, I do believe if you start to mildly obsess about observing everything in your daily world more closely to see what things can be improved on, or there is a need that nobody is fulfilling, etc., then you will notice opportunities that others won’t. Also, by continuously increasing your knowledge base about your specialties and things of interest, you will increase the odds of seeing that opportunity. Think about niche products that most others will ignore. So, as most things in life, your attitude is the determinant in success, in this case finding a start-up idea that you can get passionate about.
- Many people with resources and a desire to own their own business look to find an existing one and buy it. This works, but usually if you can’t afford the price, you’ll need to follow a different direction. However, with good research and a healthy dose of confidence, you might find a situation where the owner wants out and is willing to have you pay him out of profits you generate from the business. This is only likely if he trusts you and feels you have the brains and work ethic to run the business successfully.
- Start preparing to execute a strategy to launch and grow a business when you see or stumble upon a good opportunity. This can be done in many ways. Build a network of relationships, find a mentor, attend trade shows, learn more about what you’re weak on through seminars, webinars, classes, reading, and asking lots of questions. Join Entrepreneur clubs. Learn about organizations like SCORE, SBDC, Incubators.
- Learn about all the possible sources of money for a business now when there is no cash crunch. Also, start saving your money. You should strive to have enough saved to live modestly for one year in case you can’t afford to take a salary for yourself. Also, it’s helpful for you to have some of your own money to invest in the company. That will give confidence to other potential investors, knowing that you have skin in the game.
- If you are just starting out, I would urge you to take a job not based on the money you get. Look to work in a successful small company where your main goal is to learn. Try to work for a successful entrepreneur who is willing to share his knowledge.
- It is okay to be an opportunist. Some in the media have given it a disreputable meaning, mainly in reference to politicians.
This video is an excerpt from the Harvard Busuness School archives of leading members of the school’s Entrepreneurial communityTo me, it just means you are alert to spotting opportunities and when you see a good one, you act on it rather than talk it to death. I was proud to be an opportunist as most all of my businesses were an outgrowth of spotting one that I acted on. Not all of them succeeded, but many did, and the ones that didn’t were mainly a loss of my time. Here is a link to a two-minute video I extracted from an interview that talks about how I started my first company. . .an opportunity that I didn’t foresee that turned out great. Click on the arrow to watch it.