How to Find Better Business Ideas by Using Creative Constraints
Entrepreneurs have become the rockstars of the 21st century.
Steve Jobs made innovation look easy. Mark Zuckerberg got his own Hollywood movie. And Elon Musk has lived up to his nickname “real-life Iron Man”.
At the same time, these tech-moguls have been misleading us - they made us believe that entrepreneurship goes hand in hand with innovation, fame, and attention.
Nothing could be further from the truth.
Ask 99% of entrepreneurs, and they’ll tell you that business is quite the opposite of being creative. Most profitable businesses aren’t innovative nor exciting. And they don’t deserve a Hollywood movie either.
Most successful business ideas are just brutally effective. They solve a specific problem for a well-defined group of people. That’s it.
Maybe, but that’s exactly what you should want as a first-time entrepreneur - a solid business idea customers want to give you money for.
When looking for these kinds of ideas, it’s easy to get lost in technological knick-knacks and penniless innovation. There’s a common misconception that freedom of choice leads to great ideas. It is proven, however, that having constraints often leads to better results. This concept is referred to as creative constraints.
So, the following framework will help you to avoid idea overload and focus on proven strategies of successful entrepreneurs.
1. Scratch Your Own Itch
“If you want to change the world, start with yourself.”
Applying Gandhi’s quote to entrepreneurship could go like this:
- To find good business ideas, solve your daily life’s problems. Countless entrepreneurs have applied this technique:
George Clooney wanted to drink the perfect Tequila, so he founded Casamigos Tequila with of his 2 friends (and sold it for 1 billion dollars).
- Noah Kagan is passionate about software and marketing, so he built his multi-million dollar business AppSumo.
- Pierre Pigford was frustrated with existing software analytics tools, so he started Baremetrics (and sold it for 4 million dollars).
In all of the examples above, the founder himself served as his own perfect customer. He knew exactly what he wanted, envisioned a solution, and took action.
Daily life is full of business opportunities, and scratching one’s itch is the fastest way to find good ideas. When you’re just starting out, don’t be ashamed to tackle small problems first. Even a small innocent idea can become a huge business.
- Here are some initial questions to scratch one’s itch:
- What sucks about your current job?
- What do your colleagues and clients constantly complain about?
- What are the hardest tasks on your ToDo-list?
- Which problem do you understand better than 99% of the world?
- Which service or product would you have needed 3 years ago?
2. Follow Trends
In 1994, investment banker Jeff Bezos quit his job to start a random online book store called Amazon. When Bezos told friends and family about his decision, they were shocked. Admittedly, it was a crazy business move as the internet was still in its infancy.
In retrospect, building the first online bookstore in human history was pretty smart. But it was genius to spot the right trend at the right time. Bezos believed in the potential of E-commerce while most people were neglecting the possibilities of the internet.
Trends are the entrepreneur’s best friends. They make business life far easier - be it funding, getting customers, hiring employees, or doing sales.
However, aligning your business with current macro trends is only the first step. Spotting trends before they become mainstream is the real superpower.
How to do it?
- Build an ecosystem of input: Connect with insightful people, have a diversified portfolio of information, dabble around with new technologies, and stay away from echo chambers.
- Apply macro trends to a specific situation: for example, what does the Corona crisis mean for your local real estate market? How does AI impact the job of a lawyer? How do green technologies affect cloud computing?
3. Succeed On Platforms
Big websites like Facebook, Reddit, and Medium get most of the internet traffic. Smart entrepreneurs don’t get discouraged by these giants but learn to stand on their shoulders.
An amazing example is the SaaS product Storemapper, which was developed by Tyler Tringas. It’s a store-locator app that was initially built for the Shopify platform. Meanwhile, Storemapper is available on countless other platforms and can also be used as a standalone-tool.
Used in the right way, online platforms can give you a massive head start. They offer a huge customer base, state-of-the-art technology, and countless pain points waiting to be solved.
Additionally, platforms help to compensate for your weaknesses and focus on your strengths:
- If you don’t want to set up an online shop on your own, use Shopify.
- If you don’t have the nerve to market your product, use Facebook Ads.
- If you don’t feel ready to host your own blog, start with Medium.
There’s no recipe to be successful on platforms, but some tactics definitely help:
- Join a platform where you genuinely like the community and its culture
- Interact with the community in a respectful and genuine way
- Find a balance between following the rules and being unique
- Be patient
If you want to harness the full potential of a platform, it certainly helps to be an early adopter too.
Take Medium, for example. It’s no coincidence that most Medium top-writers have been members for at least 5 years. They benefitted from the first-mover advantage.
So, always pay attention to fast-growing platforms and analyze how they might support your mission.
4. Gain Domain Expertise
Few people know this, but the average successful entrepreneur is 45 years old, married, and has 2 kids - how come?
Older guys tend to know what they’re doing. They’ve seen a lot of things and talked to many people in their industry.
Tech-billionaire Marc Benioff, for example. He worked at Oracle in sales and marketing for more than 10
years. When the time was right, he hopped on the cloud computing trend and started Salesforce.
Experience within an industry often matters more than intelligence, innovation, and determination. That’s why a lot of entrepreneurs start out as consultants. They learn about the ins and outs of an industry, expand their network, and understand the major business processes.
However, it’s not necessary to work within an industry for 10 years. Just keep in mind that business opportunities are nearer than you might expect. Your job experience can be the field where your future business is growing on.
Some starting questions:
What do you already get paid for?
What skills are you good at?
In which areas do people ask you for advice?
Which unique insights and perspectives do you have?
5. Discover Niches
Big players like Amazon, Microsoft, and Salesforce have one massive weakness -it’s their immobility.
Big fish go for big markets and neglect low-hanging fruits along the way. These tasty fruits are called niches.
In simple terms, a niche is a subset of an industry:
- Fitness is an industry, training programs for middle-aged men is a niche.
- Real estate is an industry, real estate transaction management software is a niche.
- Agriculture is an industry, harvesting robots is a niche.
For starting entrepreneurs, niches are the perfect way to hide from the big guys. It’s so much better (and more lucrative) to be loved by a small group of people instead of being liked by a lot of people.
For example, let’s compare starting a niche blog versus starting a general blog. In comparison to the general blog, the niche blog will have better SEO, easier monetization methods, and more effective lead management.
The same is true for software products. A CRM software that targets small businesses is less likely to succeed than a software product that goes after medium-sized Yoga-studios.
To research a niche, I found the PPP-method to be very effective. PPP stands for people, platforms, and products - ask yourself who your customers are (people), where they hang out (platforms), and what they buy (products and services).
Another way to come up with interesting niches is the “X for Y”-technique. X represents a big player inside an industry and Y represents a group of people or a certain type of business. For example:
- Facebook for dentists
- Shopify for shoe-stores
- Walmart for the internet
It’s easy to fall for the innovation trap. Profitable business ideas, however, don’t require creativity.
Instead, use the power of creative constraints and focus on proven strategies of successful entrepreneurs.
You can scratch your own itch, build on platforms, follow trends early, gain domain experience, and focus on niches.
Which one of the 5 entrepreneur types are you? My free 2-minute quiz will give you the answer.