EP04 – How to Choose a Business Idea

How to Choose a Business IdeaBefore we jump into how you would go about generating an idea (or choosing an idea) to move forward with, you may be interested in a daily morning routine that you could follow to help you out in this (and many other) areas of entrepreneurship.

Our very own Carter Johnson has perfected a routine that he follows almost every morning to help get him in the game.

  • Morning blast off
  • 2-3 min. of Meditation
  • 2-3 min. of gratitude
  • 10-15 min. of reading to stay current
  • 2 min. free writing (mind dump)
  • Review long term goals (5-10 year goals)
  • 2-3 min. idea exercise (come up with as many random ideas as you can)
  • Review the day’s calendar
  • Watch a 3-4 min. motivational video
  • Review weekly scorecard (tracking important metrics most valuable to your business)

This is a very substantial morning routine that Carter follows, but it is so effective that his accountability partner can tell when he has not done this routine.  So this means that this routine affects Carter’s behaviors so drastically, that it’s noticeable to a third party.  Think about that for a moment.

Powerful stuff.

Alright, let’s start talking about ideas!


Generating an Idea

Let’s assume you’re in a situation where you’ve decided you want to create a product and you want to start selling stuff online.


Where do you start?

Well let’s talk about some great ways to generate ideas and test them out.  Most great ideas come from solving one of your own problems.

Solve your own problems

A handful of my own products were brought into existence from this very concept.  I identified a pain that existed in my own life and embarked on a journey to solve that pain point.

Here are some examples.  Back when I worked at a day job, I realized that my significant other was always texting me to ask me if I had left work.  She was always asking me this so she knew when to start dinner (bless her heart).  This meant that I was always texting while driving, as I always forgot to text her when I actually left work.

This got me thinking, why don’t I just automate this process?  So I got to work and created an iPhone app that used geofencing to automatically send text messages to anyone I wanted when I either left the geofenced area, or arrived inside the area.

Boom! I’ve solved my own problem and I can even sell the thing!

Another pain point arose when I had early meetings at work (again, back when I had a day job).  I knew I had to be at work for these important meetings, but sometimes I would hit unexpectedly horrible traffic.  Living in Canada, this happens every once in a while, the roads get covered with a huge helping of snow, and it adds 30 minutes to your commute.

The obvious solution is, just get up 30 minutes earlier on days when you absolutely HAVE to be at work on time.  But who wants to do that?  So I created a traffic alarm clock!  An alarm clock that would start checking traffic on a specific route that I had pre-programmed.  If there was heavier traffic than normal, it would wake me up earlier.

Boom! I’ve solved my own problem and I can even sell the thing!

You get the idea.

Build off of existing platforms

There are many great money making opportunities from improving someone else’s platform or application.

Take Dropbox for example, there are tons of “plugins” that were created by making use of the Dropbox API.  Take a look at this article from LifeHacker that outlines just seven popular extensions to Dropbox.

Obviously this is just one small example from a massive list of products that expose public APIs.

Another example would be Evernote. There’s an entire app store dedicated to plugins for Evernote, you can check it out here.

And remember not to discount any of your ideas.  If your idea could save someone time, or improve an existing process in some way, you could be onto something.  Everyone likes a shortcut right?

Your Unfair Advantage / Unique Selling Proposition

Another way of pursuing an idea is to look at what it is that you’re naturally talented at.  What’s something that your friends always say you’re great at?  Or perhaps something that your family says you’re good at.

The joke I always tell is that my mother always told me that I was a great teacher, but I ignored her because everyone’s mom is going to think that they’re great at everything right?

It wasn’t until I was managing a team that I realized that I actually did have a talent for teaching.  I’m great at breaking complex things down into easy to understand pieces.  That is my unfair advantage.  My unique selling proposition.

I married that talent for teaching with my passion for programming and created a successful company that has allowed me to quit my fulltime day job.  Dream come true right?  Totally!

That brings up a good point.

What is it that you’re passionate about?

What is it that you do on weekends, just for the fun of it?  What is it that you would do for free, just because you like it so much?  These are the types of activities that you can consider looking at as business ideas.  Chances are if you love doing something in particular, it probably means that you know a LOT about that subject right?

Look at Gary Vaynerchuck, he’s a guy who loves to drink wine.  Wine was his passion, he drank it, sold it, maybe even made it too.  He ended up creating an online show called winelibrary.tv where he just talked about wine, and it made him rich!

So when you pair your passion, with your unique selling proposition, and marry it with a great business plan… good things will happen my friend, just you wait.

I’d suggest you check out Tai Lopez’s blog on How to live a good life, great stuff there, lots of videos and valuable free content.

What if you have too many ideas?

Alright, so let’s switch gears.  All of the previous information was geared towards those of you who have no ideas on how to move forward.  But what if you’re someone who has far too many ideas to move forward?

How do you narrow down your list?

I’ll start with a great saying that I heard from my man John Dumas.

FOCUS – Follow One Course Until Success

How good is that?  I love it!

So first thing is first, if you want to focus on just one of your many ideas I would start by taking a look and seeing if there’s any competition out there already.

Let’s say you find a bunch of competition for idea A, and absolutely no competition for idea B.  What direction do you think you should go?

I bet you might think that idea B is going to be a winner, as there’s no competition.

And you would likely be… WRONG!

Competition is actually a great thing.  It shows that there’s actually a market for your idea.  If there was no market, then there wouldn’t be competing products out there right?

Imagine if you started a company based on a product that nobody wanted.  How long do you think you’d be in business for?  Well, I’ve started companies like that, and it only took me a couple of months before I realized I was losing way too much money.

So the universe has a way of telling you ahead of time what might work, and what might not.

Now, obviously if there’s a bunch of competition, then you’re going to have to differentiate yourself from that competition in order to grab any market share.  We won’t get into that stuff just yet, but what we can get into is helping you validate your idea.

Idea Validation

So, let’s say you’ve done your research and crossed a bunch of ideas off your list because you couldn’t find any competition out there.  Now what?

It’s time to validate your ideas with your market.  I’d say that you should order your list by passion level, so put the idea that you’re most passionate about on the top.

Grab the idea on top of your list and start talking to people that would be interested in buying that particular item.  Use the tactics we talked about earlier and tap into your group of friends, family, co-workers and acquaintances.

I wouldn’t recommend just asking your network if they’d buy your product though, as you’ll have to be a bit craftier than that.  Use your newly found sales knowledge to help paint a picture of how this product will make their lives better.  Tell a story about how you came up with this great new idea.  See how they react.  Are they immediately interested, or are their eyes headed to their watch / smart phone?

Remember, don’t just stop if someone says “Oh!  That’s a great idea, I’d for sure buy that!”  This is the kiss of death, it means absolutely squat.  That’s just a way for the person to end the conversation and walk away.  If someone is truly interested, they will give you the cash on the spot.

This is the art of pre-selling.  If someone is willing to give you money before the product is built, then they are exactly your target market.  Remember to use some risk reversal to let them know that if you don’t get enough pre-orders for this product, you’ll refund all their money.

The rule of thumb is that if you can get 3 people to preorder your product in less than a couple of weeks… then you are on to something.

Alright, so what happens if your own personal network of friends and family wouldn’t be the best target market for this product?  Well then you’ll have to push yourself outside of your comfort zone and perhaps go to some local conferences and meet ups.  I use http://lanyrd.com to find said conferences, it’s a great resource.  Also, don’t forget about http://meetup.com to find local meet ups of any random group of people you could think up!

Then get your butt out there and start mingling!  I know it’s scary, but it’s also quite exhilarating.

One other tip that Carter gives is to seek out the most negative person you have in your life.  That person that just shoots down everything you ever say.  Pitch them your idea and listen to their feedback.  Chances are everything they’re saying is also going to be on the minds of your potential customers.  These objections are great to know ahead of time so that you can address them if they come up in conversation.

Also, any objections that people have to your product (if you have a retort) should be used in your sales copy as well.  That is of course assuming you’ve found an idea you wish to move forward on.  Listing all of the potential objects along with the appropriate rebuttal is a great sales tactic.  So don’t feel defeated if everyone is just giving you reasons why they wouldn’t purchase your product.

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