Idea Generation
for Entrepreneurs
Stephen Daze
Dom Herrick Entrepreneur in Residence and
Visiting Professor
uOttawa, Telfer School of Management
https://pmfshow.buzzsprout.com/1889238/9572245-how-to-come-up-with-an-idea-mallorie-brodiefounder-of-bridgit and https://mistral.vc/the-product-market-fit-show/episodes/how-to-come-up-with-anidea-bridgit
Fundamental Premise
“
Entrepreneurship is neither a science nor an art.
It’s a practice.
- Peter Drucker
”
Generating business ideas is nothing more then practice
surrounded by some core principles.
Ideas and their Value
 Ideas don’t determine success – executing on the idea does.
 There are 8 Billion people in the world, someone else already has the
idea – some are ahead of you, some behind you and some at the
same stage.
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Ideas and their Value
 Usually not shared enough out of fear.
1. Idea will be stolen.
- Are infrequently stolen; but could be stolen at any time.
- Ideas can’t be “protected” – if they could, there’d only be one of everything.
- You give up a lot by not talking to people about your idea. Think of the risk
involved in driving, or flying vs. what you’d give up by being “safe.”
- There are 8 Billion people in the world..
2. Someone will judge me.
- Good, this is helpful - feedback is good!
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Foundation Elements of Entrepreneurial Idea Seeking
Job/Hobby/Great Business Idea
Interest:
- Excited
- Stay awake
- Want to learn
- Passionate
- Want to help
Great
Business
Idea!
Personal
Assets:
- Network
- Expertise
- Resources
Opportunity:
- Gap/need
- Customers
- Economics ($)
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Start with a Problem, Not a Solution
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Based on the work of Gary G. Schoeniger, The
Entrepreneurial Learning Initiative
Entrepreneurial Skills
Problem identification skills
- empathy and engagement
- observation and associational thinking
- curiosity and inquiry
Problem solving skills
- creativity and innovation
- critical thinking
- experimentation mindset
- collaboration and teamwork
- adapting and improvising
- networking
- communication
- resourcefulness
Self direction
- internal locus of control (confidence and esteem)
- ambiguity tolerant
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1
Idea Generation Principles
Idea Generation Principles
A
Good Business Ideas Generate Enough Revenue.
They have a value proposition for a critical mass of addressable customers.
Value
Proposition
1. There is enough pain for someone to pay for a
solution; and,
2. Relative to competition.
Critical Mass
Big enough market to matter: to make money and to
allow for pivots when your first idea doesn’t work!
Addressable
I can reach them with my revenues greater than
expenses.
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Idea Generation Principles
B
Ideas evolve over time or start as mistakes
Ideas don’t come out fully formed, they only
become clear as you work on them. You just
have to get started.
Mark Zuckerberg
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Idea Generation Principles
B
Ideas evolve over time or start as mistakes
Ideas evolve over time
Start as mistakes
(eg. Facebook, Blackberry)
(eg. 3M Sticky Notes.)
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Idea Generation Principles
IKEA- Ingvar Kamprad founded IKEA in 1943
at his Uncle Ernst’s kitchen table. IKEA was
basically an acronym of his
name Ingvar Kamprad and Elmtaryd, his
family farm and the village Agunnaryd. At
first the business was typically mail-order
and included only small household goods
such as picture frames, wallets, nylon
stockings, pens and wallets.
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Idea Generation Principles
Nintendo: The Nintendo Corporation’s
domination of the gaming industry didn’t start
with their first video game console. They have
actually established themselves 70 years before
the first video game came to life, in the 19th
century when they brought back the popularity of
card games to Japan. A new card
game, Hanafuda, was invented, by Fusajiro
Yamauchi (Nintendo founder) which used
images instead of numbers, making it difficult for
gambling.
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Idea Generation Principles
Netflix : The genesis of Netflix came in 1997 when I
got this late fee, about $40, for Apollo 13. I
remember the fee because I was embarrassed
about it. That was back in the VHS days, and it got
me thinking that there's a big market out there.
So I started to investigate the idea of how to create
a movie-rental business by mail. I didn't know
about DVDs, and then a friend of mine told me they
were coming. I ran out to Tower Records in Santa
Cruz, Calif., and mailed CDs to myself, just a disc
in an envelope. It was a long 24 hours until the mail
arrived back at my house, and I ripped them open
and they were all in great shape. That was the big
excitement point.
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Idea Generation Principles
C
Ideas can come from anywhere, most often we see good
business ideas starting with one (or more) of the following:
Personal Pain
I have a problem that needs solving.
1.7m
merchants
170
countries
$1.2B
Revenue
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Idea Generation Principles
C
Ideas can come from anywhere, most often we see good
business ideas starting with one (or more) of the following:
Market Gap
A critical mass of customers are looking for solution.
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Idea Generation Principles
C
Ideas can come from anywhere, most often we see good
business ideas starting with one (or more) of the following:
Interest
I love this so much, I can see myself working on it 24/7.
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Idea Generation Principles
C
Ideas can come from anywhere, most often we see good
business ideas starting with one (or more) of the following:
Insight
I understand the industry and see where it is going.
$4B Revenue
1998
2020
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Idea Generation Principles
D
Ideas are truly innovative when you invent brand new solutions
and industries rather than make an existing one a bit better.
Guy Kawasaki: “Jump the innovation curve.”
Guy Kawasaki on Innovation (4:14 – 6:47):
https://www.youtube.com/watch?v=Mtjatz9r-Vc
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Idea Generation Principles
The best business ideas satisfy most (or all) conditions
- If your current idea doesn’t, look to evolve it sufficiently such that it does.
Good Business Ideas
Necessary conditions:
a. Can make money (or not lose it): has value (value proposition) to a critical mass of
addressable customers.
And
b. Evolve over time.
c. Usually start with one or a combination of:
o Personal pain (I have a problem that needs solving.)
o Market gap/need (Others will pay for a solution.)
o Interest (I can see myself doing this 24/7.)
o Insight (I understand the industry and the trends.)
d. Jump the innovation curve.
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Idea Generation Principles
The best business ideas satisfy most (or all) conditions
- If your current idea doesn’t, look to evolve it sufficiently such that it does.
Good Business Ideas
Necessary conditions:
Can make money (or not lose it): has value (value proposition) to a critical mass of
addressable customers.
And
Evolve over time.
Usually start with one or a combination of:
o Personal pain (I have a problem that needs solving.)
o Market gap/need (Others will pay for a solution.)
o Interest (I can see myself doing this 24/7.)
o Insight (I understand the industry and the trends.)
Jump the innovation curve.
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2
Other Considerations
Other Considerations
Expanded Thinking: Business Opportunities
What are the businesses
associated with coffee?
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Any more?
Coffee Marketing Chain
Production Initial
processing
Smallholder
Medium-sized farmers
Collection
Trader
Initial processing
(wet)
Manufacturer
Assembling
Curing
(hulling, grading)
Intermediation
Trader/Agent
Cooperative union
Manufacturer
Auction/Brokers
Shipping
Roasting
Distribution
Consumption
Large farms and
estates
Exporters
Domestic roasters
Wholesalers and retailers
Domestic consumer
Importing consumer
Other Considerations
Design vs. User Experience
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Other Considerations
Opportunity Recognition and Leveraging One's Experience
https://ecorner.stanford.edu/videos/opportunity-recognition-and-leveraging-ones-experience/
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Other Considerations
Think big, start small
Successful companies often start with executing very
well on an initial concept that is the beginning to a much
bigger offering.
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Other Considerations
Innovative Ideas with the User in Mind (4:40 – 6:55)
https://www.ted.com/talks/steven_johnson_where_good_ideas_come_from#t-257714
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Idea Assessment
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Idea Assessment Considerations
1
Idea
• What is the problem hypothesis? Why is it a
problem?
• Are there potential solutions (v.1)?
• What’s compelling about this idea for you?
• What “assets” can you mobilize to help you?
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Idea Assessment Considerations
2
Market
• Who specifically has this problem? Do they hold
the budget to pay for a solution? If not, who does?
• What is the size of that market?
• What does the competitive landscape look like?
• What would a sale look like – ie how would it work?
• Do you have any advantage?
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Idea Assessment Considerations
3
Any Big Issues
• What key resources are required?
• What are the rules? Regulations?
• Any big logistical issues?
• What risks: economic, political etc?
• Any big concerns?
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Idea Assessment Considerations
4
Revenue Model
• Who pays you; how do you get paid; how do you
make money?
• What are the big fixed costs? What are the
incremental costs each time your produce one?
• What is your pricing plan?
• Do you have any advantage?
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Generating Ideas
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Start with a Problem, Not a Solution
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Exercise
PART 1
1
Generating business idea. They don’t have
to be good.
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So, Start with Problem Seeking
1. List customer segments (groups of people) you belong to:
A. Old guy
B. University employee
2. Pick industries you know something about, or are connected to:
A. Consulting
B. Teaching
C. Coffee
3. List things you are passionate about:
A. Music
B. Basketball
C. Entrepreneurship
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4. For each of the three, list three possible problems that each of these
groups are having. Don’t consider solutions yet.
- Teaching:
1. hard to network with like minded peers; 2. hard to find most up
to date methods; 3. dislike marking
- University employee:
1. don’t have access to food options at south end of
campus; 2…; 3..
- Music lovers:
1. may not see when relevant concerts are coming to
their city; 2…; 3…
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5. From the 9 problems, think about the possible ways to solve this problem.
Don’t consider the details of possible solutions, just the broad opportunity to
solve that problem.
eg> how can I determine that enough people want new food options at the
south end of campus – not: provide food options at the south end of campus
not: food truck, food delivery, Thai food restaurant etc.
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6. Now that you have 9 possible business ideas, find the one that fits the
following models best:
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Ideation and Creativity
Group
PART 2
2
Everyone share your idea and talk about
how it satisfies the conditions.
3
Take note of +/- and indirect feedback.
4
Prepare to share your idea and or learnings
from sharing.
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Pitching Your Idea (vs your business)
Cover off:
- Problem/gap hypothesis
- Assumed market
- Assumed solution
- Revenue model
University professors don’t have easy access to caffeinated beverages during their lectures
so we believe we could provide a delivery service using existing coffee providers on
campus and students looking to earn extra cash by making deliveries. We’ll make money
from service fees using a subscription revenue model.
Or..once you know what you are actually offering to whom:
“My company, _(insert name)_, is developing _(a defined offering)_ to help _(a defined
audience)_ _(solve a problem)_ with _(secret sauce)_”.
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Volunteers?
(Does anyone want to share their idea to try to build a team for this class?)
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Questions?
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