I read the term “wantrepreneur” recently on an article on SmartBrief. I thought this was particularly interesting because those of us who are lucky enough to have been able to turn a dream in to a business, or took a concept to creation and made a business from it, there are others out there who are not sure how to get started.
If you want to start a business, keep reading!
The author of Five Sources of Start-up Ideas, states that a recent survey showed that 90% of all business ideas were generated by at least 90% of the following five categories:
Here are the top five sources of start-up ideas:
1. I experienced a pain point in my life and wanted to solve it. By far the most popular source of ideas among respondents was a frustration that the founder experienced in his or her personal life. Ever wonder how much your own problems might be worth? Ask Kent Plunkett, who founded Salary.com when hiring a secretary and finding himself unsure of what to pay. After building the world’s largest compensation information database, Kent eventually took the company public in 2007 at a valuation of $175M.
2. I met someone talented, and we started a company together. If you’re interested in starting a company, look at those around you, specifically at your workplace or school. Others have cautioned against starting companies with business school friends as a strategy for eventual success, but the data care to differ. Of the 39 companies started since 2003 and valued at over $1B by private or public market investors, almost half were started by founders who met at school. Close proximity of like-minded individuals seems to be a key catalyst for surfacing new ideas. Cofounders Corey Capasso, Andrew Fereneci, and Dan Reich first met at the University of Wisconsin, starting Spinback together many years later before the company was acquired by Buddy Media in 2011.
3. I have a special skill or passion, and I turned it into a business. Spend an hour conducting written personal skills and passion inventory, and your next idea might be staring back at you. The founders in this category were intensely self-aware and looked for innovative ways to turn their work experience and hobbies into full-fledged businesses. Alexa von Tobel combined her passion for helping Millennials with her skill of articulating complex financial matters to start and raise more than $40M for LearnVest, an online financial planning company.
4. After working in an industry for a long time, I saw a customer need. Think your years slaving away at a corporate job will amount to nothing but a partially adequate 401(k)? If you use the experience to think hard about your customer’s unmet needs, you might be on the road to riches. The founders in this category worked in or around an industry for many years before starting a company directly related to that industry. Francois de Lame and Jennifer Fitzgerald amassed extensive experience in, and knowledge of, the personal insurance industry before starting KnowItOwl, an innovative online personal insurance navigator.
5. I researched many ideas and eventually narrowed it down to one. Savvy individuals are leveraging new sources of information, such as Quora and Hacker News, to conduct “top-down” research and use a data-driven process of elimination to arrive at a single business idea. Many were also very sophisticated in tracking proven business models and companies, with the goal of identifying breakout hits and applying them to new geographies. Founders Kimball Thomas and Davis Smith saw the value of taking the Diapers.com model to Brazil. Their latest goal? To hit $1B in revenue in the next few years.
Do you fall in to one or more of these categories! Let’s discuss.
About the author:
Daniel Gulati is a tech entrepreneur based in New York. He is a coauthor of the bookPassion & Purpose: Stories from the Best and Brightest Young Business Leaders and a contributor to the HBR Guide to Getting the Right Job. Follow him on Twitter at@danielgulati. To receive an email update when he posts, click here.