If you want to start a business but you’re struggling to come up with great ideas.
Here’s your practical guide for idea generation...
This approach uses the Disruptive Innovation Model by Clayton Christensen.
What is Disruptive Innovation?
Simply put. It says that innovators can gain market share by addressing the underserved. Or even an over-served portion of the market. Because of the major incumbent's offer.
In essence, newcomers can gain market share by providing exceptional service. Just to one sub-segment of a large market.
Provide the specific product/service that is required. Use it as a lever to grow.
Now let's get down to practical business.
Here’s how you produce ideas using this business framework...
Step 1: Find a Large Market
Begin broad then narrow your focus to a certain market.
Generally, you should choose a market that you are familiar with. You could be working in it, reading about it, working closely with someone who operates in one, and so on.
But. Make sure it’s a BIG market though.
- Banking & Finance
- Health & Fitness
- Corporate Management
Find markets that are both Large and inefficient.
If you've ever been stressed when dealing with a market... it's a safe bet that it's inefficient.
For example: Tax management and Fintech space are pretty much a pain in the backside. Always.
Step 2: Find a niche that is underserved
Create a diagram of the market's value chain components.
I feel that sketching things out first... Makes it simpler to conceptualize and locate holes.
Investigate the market's sub-segments and look for niches and communities.
Two of my favorite platforms for this are:
Reddit & Twitter
Reddit is an excellent resource for locating passionate micro-communities.
Another excellent tool for this research is Twitter.
This study identifies a market niche. That is either underserved or over-served by current offers.
To put this into context, consider the following:
Hotels & Accommodation is a gigantic market. Renting for foreigners, on the other hand, is a niche that is underserved.
Step 3: Speak with at least 50 people in that niche
Go out and chat with as many individuals as you can in that niche. You may find them on LinkedIn, Twitter, Reddit, Facebook, etc.
It depends on your kind of niche.
Get answers to the following questions:
- What are their pains?
- What are some things they wish didn't exist?
- What causes them to be stressed?
- What are some things they wish were better?
To condense, keep track of responses and tag key identifiers.
Step 4: Gather information and evaluate it
Zoom out and evaluate the findings after you've logged the responses from all of your chats.
Common themes will start to emerge.
What are the most pressing concerns in your field?
What are the issues that the big players aren't addressing?
Your business ideas are the tensions and pain spots that rise to the top. Allow the statistics to lead you to the flow state.
This strategy has proven successful for several businesses with huge valuations.
In a nutshell:
- Find a Large Market
- Find a niche that is underserved
- Speak with at least 50 people in that niche
- Gather information and evaluate it
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