Your Billion Dollar IdeaI was asked by a reader about how to generate good ideas. Though I have mentioned about identifying a killer idea from our work or personal life experience a few times, I never dig deep into the details. So I would like to take this opportunity to elaborate that a bit.
Basically, great business ideas are borned from understanding how the market dynamic works. To illustrate the point and without being too specific to a particular industry, let’s explore the scenario where most of us have experience about. Imagine we are trying to find a date online. Firstly, we visit a dating community we know best. This is our marketplace of interest. After scouting through the website with a few searches, we size up how many people that may fit our profile and find out the market potential.
In order to position ourselves to the targeted audience, we need to advertise ourselves with an attractive member profile and create a killer tagline to generate market interest. If the response is great, we know our profile and tagline are in the money. Otherwise, we need to come up with some ideas to tune either our profile or our tagline via a series of A/B tests. What can be missing to generate higher response rate? Is our profile too boring? Does our tagline lack the call to action? How about studying our competitors who have amazing follower base and figuring out what make them tick? What if we place our profile to another dating site, do we get the same response rate? Most of the times, the best idea can be just around the corner. The key is to learn to ask the right question by going through all the clues around us.
At the end of the day, idea generation is a number’s game. Every idea deserves a set of market testings to validate if it is viable. In order to do that, we need to be diligent on building minimum viable products or services (MVP) out of our ideas, testing them out in the targeted market, adjusting and adapting accordingly to see if any of them stick. In our example, the MVP will be a complete profile with featuring the idea we would like to test, such as a really funny headshot.
Remember though, never fall in love with a particular idea and be emotionally attached to it. After a certain period of time, we should move on if there is no sign of market demand. How long we should invest into any particular idea? It is different for each product or service. Typically, after the MVP is out for a few months and a few iterative cycles for adjustment, if there is still no statistically significant growth in sales or traffic volume on a day to day or week to week basis, that can be a good indicator to pivot or go back to the drawing board all together. It doesn’t mean our idea is not good, but usually the timing or market may not be right.
Being successful in business require the killer instinct to figure out the trend and the timing, filter out the best idea and build the product or service around it to ride the wave. Most importantly, regardless of how much you think your idea can create a billion dollar industry, it’s the team who executes on it that matters.