What to do with your business idea

Alright, so you got a business idea – and it’s genius!

Perfect!

Here’s what I think you should do from here:

  1. Find out if anyone has already thought about you idea
  2. When you idea comes to life, will you be your own customer?
  3. Do you have an edge?
  4. Who do you build the company with?
  5. Do you know how you will generate revenue?
  6. Get feedback from experienced people

Here’s what I think you should do now!

(A lot of entrepreneurs will say that the idea itself isn’t worth much – and what matters is the team, the execution, and the grind.

While that makes a lot of sense, I think it’s critical to not to undermine the importance of the idea and the problem you want to solve, because the idea and the problem you want to solve, should be what brought you and your team together.

Your team should have a common understanding of the problem, your solution to it and a trust in the execution of it.)

This is a list of things I’d consider going from idea to building.

1) Has someone else already built the company, you want to build?

There is nothing more heartbreaking than pitching your new brilliant idea to your friend or colleague, who’s response to you is “Well, I like your idea, but it kinda already exists”.

I’ve felt this myself and not too long ago, a close friend of mine, pitched me an idea for a business that was very similar to Foursquare, not knowing Foursquare was a thing.

But even though it feels extremely discouraging finding out that a company is already ten steps ahead of you, solving the same problems as you want to, you should try to look at the bright side of it.

If your business idea already exists, you can either 

    • Join the company that is already up-and-running, solving the same problem you care about. The upside of this is that you don’t have to risk a lot of capital compared to starting your own business.
    • Find a way to differentiate what you are doing and what they are doing
    • Learn everything about what they do right and wrong and execute your business 10x better than they are.
    • Find another problem to solve.

To make the decision on what your next step should be, you have to study and research all there is to know about the company that is already trying to solve the same problem as you are.

  • Is the company financially healthy?
  • Who are the people behind the company?
  • Could you see yourself working there?

After that, you can decide on where you want to go from there. If the company makes sense for you and you could see yourself working for them, I’d suggest you arrange a chat with them and present your ideas and learn more about them.

2) Build a product you would buy yourself
business idea - make a good product

The author Toni Morrison famously said;

“If there’s a book that you want to read, but it hasn’t been written yet, then you must write it.”

and I think that translates a lot to creating a business.

If you long for a service or product, that doesn’t exist, then you must build it.

As an example of this, check out my mother’s new shop, which is Photo Styling Backgrounds.

Personally, I’d only build a product that I would pay for myself and the reason being that I need to be a customer in my own shop, in order to understand the customer and in order to be passionate about the company. Some people have successfully built businesses in a space they aren’t really passionate about, just because they saw an opportunity and a hole in the market, but for me, that’s not enough.

Building a successful company is not a sprint – it’s a long fucking marathon and if you aren’t passionate about what you’re doing, most people won’t be able to stick with it through the hard times every company goes through. Those hard times might last years…

2) You need an edge
business idea for your startup

You might have an amazing business idea for a product or service, that solves a problem that you are extremely passionate about, that no one else has thought of and something you would pay money for yourself – And that’s the perfect start.

But if what you are building relies heavily on tech, and you know nothing about tech, it’s going to be uphill.
And if you want to manufacture a physical product and know nothing about manufacturing, it’s gonna be uphill.

I’m not saying that’s impossible. But it is crucial for you to set yourself up for success by having some kind of edge in the game, before committing to a project that relies too much on things you know nothing about.

People solve this problem by teaming up with other people who know the craft or the industry or the people in that industry. And that’s a great way to build a product in a space you don’t feel comfortable in.

An edge can be something like:

  • Being an expert in the domain or an expert in how to build the project.
  • Being part of a community or a large community of potential customers.
  • Having a ton of capital to hire smart people.

Or you could also go where no one else is willing to go and work 10x more than your competition.

3) Build a company with people you know and have experience working with

Startup with friends you trust

Everyone can share a success together, but very few can handle a failure. Ideally, you want to start a business with people you trust and have worked with before. Ycombinator emphasizes this a lot. When they pick their startups, they care more about your team than your business idea.

“Cofounder relationships are among the most important in the entire company,” –  Sam Altman

According to Altman, many startups die early because of co-founder blowups. He noticed that many students often pick co-founders the way they would pick a date – they meet someone new, discover that both want to start a company, and decide to partner up. This a huge mistake.

Oh by the way, if you aren’t technical, and you want to build a tech-service or product, you have to find a technical co-founder for your project.

4) Start a company with a business model that makes sense

Profital business model
This should be a no-brainer, but every day someone launches a new service or product without any idea on how to monetize it.

And there’s nothing wrong with that, as long as you don’t plan to make it business or rely on that income. But if you, like many others, daydream about quitting your 9-5 job to pursue your project full time, then you must have a business idea on how to make it profitable and an actionable plan on how to generate revenue.

5) Share your business idea with smart people

So many people are scared about sharing their ideas with anyone because they are scared their friend or colleague might steal their idea. And if that’s how you feel, you should get new friends or colleagues. Of course, it has happened, but the PRO’s of getting feedback from a person you can learn a lot from outweighs the risk any day.

 

5) Do you want to build a unicorn?

Billion Dollars business idea
If you dream is to build a billion-dollar company – which is a kinda strange way of approaching your business, then this graph is of your interest.

This chart shows all the billion dollar tech companies and how fast they reached their 1 billion dollar evaluation – segmented by what industry they are in. It doesn’t take much of a genius to spot that if you are dreaming about building a 1 billion dollar business, you probably shouldn’t go into Ed Tech, Media or Entertainment, but instead look into on-demand, social & e-commerce. See all the companies featured here.

 

Thanks for reading! I hope it makes sense.

Last week, I shared an idea for a music app and a new democracy.
And if you want to get into online marketing and you have zero experience, make sure the post about “How to land your first online marketing job“.

P.S – In September, we are launching a mobile phone company in Mexico that we are really excited about!

If you want a nice peptalk on startup, ideas and products, take a listen to Ycombinators Sam Altman

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