A playbook for Generating Business Ideas

Key Takeaways
Don’t let not having an idea prevent you from becoming an entrepreneur. Use
one of the four methodologies in this book (“Meet Known Needs,” “Ask Your
Customers,” “Do What’s Working,” and “Scratch Your Own Itch”) to get your
next business ideas.
There are many risks associated with building a business. But one of the most
significant risks is building a product people want. This book focuses on
methodologies to effectively and efficiently learn what people want.
To apply the “Do What’s Working” methodology to identify your next business
idea, pick a company you see that has traction (validated market demand). If you
are passionate about the problem it’s solving and the customers it’s serving, feel
it has the potential to meet your goals, and if you have the skills and assets to be
able to compete, you could start a similar company.
Entrepreneurs have been solving “known needs,” and earning wild profits in
doing so, for generations. To apply the “Meet Known Needs” strategy to
generating your next business idea, think about what people have a deep need
for, and how you can develop a solution that is ten times better than anything
that exists today.
To apply the “Ask Your Customers” methodology to generating your next
business idea, pick a customer segment you want to serve, and conduct customer
development interviews in order to determine what their problems are. Starting
with a customer segment you want to serve and a problem they told you they
have, rather than a startup idea, reduces the risk of there being a disconnect
between what you think they want and what they actually want.
To apply the “Scratch Your Own Itch” methodology to identify your business
idea, think about what problems you have, what unmet needs you have, and what
products you wish you had that don’t exist yet. By starting with a problem you
have, you reduce the risk of trying to solve a problem that no one has. After
identifying an idea for a product you want, make sure other people want it too by
practicing customer development.

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By developing an idea that solves a problem you have, solves a problem people
told you they have, solves a problem that people have been solving for ages, or
is comparable to an existing idea that has validated demand, you greatly improve
the chances that your idea has demand.
Competition, ability to monetize, and ability to build the technology are a few of
many risks that startups face, but they are probably not as great as the risk of
building something no one wants.
The 20th century startup strategy was to (1) generate an idea, (2) build a product,
and (3) see if it has market demand. Lean Startup has taught us to (1) generate an
idea, (2) see if it has market demand, and (3) build a product if it does have
demand. In this book, I propose (1) generate an idea based on what market
demand data you have or can get quickly, and (2) iteratively develop the product
to ensure it meets demand.
To evaluate a business idea’s market potential before it has validation or
traction, consider whether it satisfies a known need or is similar to another
product or service that has been validated.
There are nearly infinite business opportunities out there for everyone. Consider
your goals when deciding which opportunities are best for you.
To avoid spending a bunch of time and money on something no one wants, and
to build products that are valuable to your customers, practice customer
development and iterative product development.

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