Why Your ‘Genius’ Start Up Idea Probably Isn’t
And what do about it
As a young entrepreneur, I often find myself caught up in the excitement of chasing the next big idea.
I’ve spent countless hours brainstorming and pitching potential start ups, convinced that each one will be the next big thing. But as I’ve grown in my career and learned from my successes and failures, I’ve come to realize this:
simply having a good idea isn’t enough
The truth is, the vast majority of start ups fail. According to a study by CB Insights, nearly three-quarters of start ups will either pivot or shut down within their first five years. So what separates the successful ones from the rest?
I think it all comes down to a clear focus on solving a real problem in a meaningful way. In other words, it’s not just about having a good idea, it’s about having a good idea that addresses a pain-point or challenge that people are facing and that is capable of generating a profit.
This may seem like an obvious point, but it’s amazing how many start ups I see that are chasing the next big trend or trying to solve a problem that nobody really cares about. These businesses often have flashy websites and slick marketing materials, but when it comes down to it, they aren’t really solving any real problems or providing any real value.
So how do you go about finding a profitable start up idea? I’ve found that the following framework has been helpful for me in identifying ideas that are worth pursuing:
Step 1: Identify a Fast-Growing Underserved Niche
The first step to finding a profitable start up idea is to identify a fast-growing underserved niche. This could be a specific industry or market segment that is experiencing rapid growth, but that is not yet saturated with competitors. By targeting a niche that is in high demand but has few existing options, you can differentiate yourself from the competition and potentially capture a significant share of the market.
For example, let’s say you’re interested in starting a business in the health and wellness industry. Instead of trying to compete with the thousands of other fitness companies out there, you could focus on a specific niche like vegan meal delivery or virtual fitness coaching for busy professionals. By targeting a specific and underserved niche, you can stand out in a crowded market and potentially tap into a more loyal customer base.
Step 2: Identify a Big Pain-Point for Your Target Market
Once you’ve identified a fast-growing underserved niche, the next step is to identify a big pain-point for your target market. This could be a problem or challenge that your potential customers are facing, and that they are eager to solve. By focusing on a pain-point that is important to your target market, you can create a product or service that addresses their needs and helps them achieve their goals.
For example, let’s say you’re starting a vegan meal delivery service. One pain-point that your target market might face is the time and effort required to plan, shop for, and prepare healthy vegan meals. By providing a convenient and hassle-free solution to this problem, you can create value for your customers and differentiate yourself from other meal delivery options.
Step 3: Understand How Most People Currently Solve the Problem
To truly understand the pain-point that you are targeting, it’s important to understand how most people currently solve the problem. This could involve researching existing solutions, understanding the pros and cons of each option, and identifying any gaps or weaknesses in the current market. By understanding how most people solve the problem, you can better position your product or service as a superior alternative.
For example, if you’re starting a virtual fitness coaching service, you might research how most people currently get fitness advice from either joining a gym or hiring a personal trainer. By understanding the pros and cons of these options, you can tailor your service to address any weaknesses or unmet needs. For example, you might offer more flexible scheduling, personalized workouts, and ongoing support to differentiate your service from traditional gyms or personal trainers.
Step 4: Understand Why Existing Solutions Don’t Work for Some People
Once you’ve identified a big pain-point and how most people currently solve it, the next step is to understand why these solutions don’t work for some people. This could involve identifying common obstacles or challenges that prevent people from achieving their desired outcomes, or understanding why certain solutions are not as effective as others. By understanding these challenges, you can develop a product or service that addresses these issues and provides a better solution.
For example, if you’re starting a virtual fitness coaching service, you might find that people struggle to stay motivated or find the time to workout. By understanding these challenges, you can create a service that offers customized workout plans, online support groups, and virtual coaching sessions to help people stay on track and achieve their goals.
Step 5: Develop a Different Solution
With a clear understanding of the pain-point, existing solutions, and the challenges that people face when trying to solve the problem, you can now develop a different solution. This could involve creating a new product or service that addresses the pain-point in a unique and innovative way, or it could involve improving upon existing solutions by adding new features or addressing weaknesses.
For example, if you’re starting a vegan meal delivery service, you might create a service that offers personalized meal plans, ingredients sourced from local farms, and eco-friendly packaging to differentiate yourself from other meal delivery options.
Step 6: Build Your Solution with 50%+ Margins
Finally, to ensure that your startup is profitable, it’s important to build your solution with 50%+ margins. This means that your product or service should generate at least 50% more revenue than it costs to create and deliver. By focusing on profitability from the outset, you can create a sustainable business that can thrive over the long-term.
By following this framework for profitable start up ideas, you can identify a fast-growing underserved niche, identify a big pain-point for your target market, understand how most people solve the problem, understand why existing solutions don’t work for some people, develop a different solution, and build it with 50%+ margins. By taking these steps, you can create a business that is well-positioned for success in today’s competitive landscape.
Conclusion:
So the next time you’re brainstorming start up ideas, take a step back and ask yourself: is this idea truly addressing a real problem or challenge in a meaningful way? Will it generate a profit? By keeping these questions in mind, you can increase your chances of success and create a business that is truly valuable and meaningful to your customers.
