A playbook for Generating Business Ideas

Be Observant
Look and listen for people complaining and taking action to solve their own
problems or meet their own demands.
a. Complaints
One way to learn about problems worth solving is simply to be observant to
what people complain about. Wiley Cerilli, Founder of SinglePlatform, used this
technique to get the startup idea for SinglePlatform, a company he later sold for
$100 million. I wrote a full case study of how he used customer development to
start and grow the company on my Huffington Post blog. In short, small business
owners were complaining about having to manage all of their business
information across several different publishing platforms. When he heard so
many complaints he knew that they had a real problem, and therefore there was
an opportunity. Next, he used customer development to shape and validate a
solution to the problem.
b. Self Producing
You can also look for solutions that people are “hacking together” themselves. If
they’ve taken the effort to make something themselves, such as a spreadsheet,
it’s a sign that it’s an important problem for them.
If someone hasn’t take any action to solve a given problem that they have, it
might be an indication that it’s either not a major problem, or that they don’t
have any interest or motivation to solve it.

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Key Takeaways
To avoid ideas that don’t solve problems, identify problems and unmet demands.
You don’t need to start with an idea to start a business. Starting without an idea
can actually have some advantages over starting with an idea because you might
be less glued to an idea you have and more open to learning about what people
actually want.
With the right
customer
development
tactics
, you can learn what problems
people have and how you can solve them. Starting with a customer segment can
be a highly effective way to start a business. Customer development is
commonly used to test startup ideas, but it can also be used to generate startup
ideas.

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Chapter 6: Meet Known Needs
There are some things nearly everyone wants. There are some things that are
essential to most people.
These are needs that don’t need to be validated. We know that people need them.
We know this because basic math or biology would prove that it’s true, or
because people have already made efforts to solve these needs.
By starting with a known need, we significantly reduce the risk of a new
business offering. There is still a risk that the solution will not be wanted by
customers -- the solution will still need to be validated. The next chapter, “Do
What’s Working,” will cover the topic of using validated solutions to solve new
or different problems. However, starting with one unknown is less risky than
starting with two unknowns.
In my opinion, the best startup ideas are obvious. They are massive
improvements to pre-existing and widespread problems. Some of the most
successful companies of today provide products that have existed in different
forms for generations. Problems that people have been paying to solve since the
beginning of time. They are simply solving them with solutions that are
significantly more valuable. I will provide examples of companies that are
“meeting known needs” throughout this chapter.
“Great companies do 1 [or more] of 3 things: Get you laid, get you paid, [or]
get you made.” – Dave McClure, 500 Startups

This quote from esteemed investor and entrepreneur, Dave McClure, while
somewhat vulgar, alludes to his preference for companies that solve basic needs
(paid, made, or laid). Below are a list of essential, and/or validated human needs,
and companies that solve them. In some cases, you can see that companies have
been solving these needs for decades, and earning massive amounts of money in
doing so, but the solutions have massively improved over time.