10 Proven Frameworks For Generating Startup Ideas

Every great business starts with an idea... and understanding where the great ideas come from is core to being a great entrepreneur. Some of the most important work that you will ever do on your business happens right at the start. Before it has a name, its first investor, or its first customer. How you go about generating startup ideas, and then turning that idea into a business

Where do startup ideas come from?

Entrepreneurs find any number of sources for their great business ideas. Some ideas come almost by accident. The entrepreneur might have a hobby or solution to a personal problem, with no intention of turning it into a business, only to discover that there was broad demand for it.

More often, though, a founder will have an idea in mind for a problem that they want to solve, with varying levels of conviction on how to commercialise that idea.

And then there's the third group - people that want to be entrepreneurs and love the idea of creating a business, but are not sure of the idea to build the business around. They're the ones that need to understand the art of brainstorming business ideas and how to identify gaps and opportunities in the market.

How to generate startup ideas

While sources for startup ideas are effectively limitless, there are some proven methodologies that entrepreneurs can use that can help them crystalise and develop ideas into viable businesses.

Below are some of the frameworks that successful entrepreneurs have used in developing their business ideas. Whether you choose to adopt one or a combination of them, these approaches will help you get the ball rolling on what could be the next big thing.

Strategy 1: Think globally, act locally

One very common way that entrepreneurs can build successful businesses is to find great and proven ideas in overseas markets, and bring those to their local region.

There's perhaps no better example of that than Afterpay. These days, Afterpay is the biggest name in the buy now, pay later (BNPL) space, however it wasn't the first one. Affirm, from San Francisco in the U.S, launched two years before Afterpay, and its early pioneering success was no doubt an inspiration to the Afterpay founders.

Of course, an entrepreneur doesn't need to focus on bringing American ideas to the local market, though that is where many of them come from. The best entrepreneurs will keep a close eye on innovation the world over to look for local opportunity.

Strategy 2: Spend 21 days recording every problem you encounter

Another simple technique that works for many founders is to find a problem that they're having themselves, and then scale the solution into a business. Whether it's problems that you're encountering at work, or problems at home, keep a 21-day notebook diary of each problem or frustration that you encounter, and at the end of the period, look back at them and see if any can be spun into a business idea.

Why keep a log of 21 days? Because with a lot of problems, you'll battle through them on a regular (if not daily) basis, only to quickly forget about it once you've got a workaround. Keeping an actual log allows you to see how frequently a problem pops up.

That's what the founders of DoorDash did. The problem that they had was simple: they loved Thai food, but the local restaurants didn't do delivery in suburban areas. An app that could facilitate the delivery of food was, as it turned out, a very good one indeed, and it started because the founders simply noticed an everyday problem that, at the time, lacked a solution.

Strategy 3: Do a SWOT analysis on existing companies

Another option would be to look at existing businesses and find ways to do things better. This is particularly relevant in the apps and software market, where there are a lot of ideas, but often room for a competitor to do things better.

The SWOT analysis is a useful tool for deconstructing companies and determining whether they're ripe for disruption. Take the leading companies in a sector and conduct the SWOT analysis against each of them. If there are common threads within the "weaknesses" boxes, then addressing that is probably an opportunity for a business idea.

You can also look on the iOS or Android app store for popular and highly downloaded apps that have poor star ratings. For those apps, the idea is strong but the experience is not. They're almost certainly going to have "W"s in the SWOT analysis, and you'll be able to work out why by looking for common threads in the comments to those reviews.

Strategy 4: Use the Jobs-to-be-done framework

The jobs-to-be-done (JTBD) framework is a powerful tool for developing business ideas, in which the entrepreneur will try to understand what the customer's specific goal is (the "job"), and the thought processes that would allow that customer to use a product or service to complete the job.

Automation is a good example of this in action. Currently, automation, digitization and transformation are top of mind for many customers that are looking to drive efficiency across the business by eliminating menial tasks.

For example, Elenium Automation is an Australian startup that found a big opportunity in the COVID-19 response. Set up as a business to automate the airport experience for travellers, the company's ability to provide contactless temperature, heart rate and respiratory checks became an automated solution to a big problem, and the company has subsequently picked up a $10 million investment round to start to expand into other areas beyond airports.

You can learn more about the renowned JTBD framework, first introduced by Clayton Christensen, in the quick video below.

Source: https://www.youtube.com/watch?v=VmbSpTJXozk

Strategy 5: Uncover gaps by observing an audience

"Forget ideas, study a market."– Amy Hoy, Serial Entrepreneur

Many successful businesses start not by finding a new problem to solve, but rather observing an existing market and understanding where there are existing problems. Once you identify a problem that either hasn't got a solution, or has poor-quality solutions, you can step in with a product that speaks to that audience, in a format that they prefer.

A great example of this is Triangl. Swimwear is an oversaturated market, and conventional wisdom would have said that to launch a new brand into that market you were going to need a big marketing budget. Triangl went the other way and built an enormously successful business by recognising that its consumers were active on Instagram, that other brands weren't doing a great job on Instagram, and subsequently targeting them there. By making sure that the celebrities and influencers on that platform were getting free costumes to wear Triangl was able to successfully launch an online-only retailer for an "idea" that was by no means new.

Forums, Subreddits, LinkedIn and Facebook Groups, Twitter communities and more can be an enormous source of business ideas if you are able to tap in and understand what motivates the specific groups that are active on them.

Strategy 6: Search for an industry that is broken

Another opportunity for entrepreneurs is to look at industries that are "broken" and have a poor reputation among consumers and find ways to disrupt and innovate within them. These are usually industries that have a long history and effective monopolies that have meant they haven't needed to innovate at all.

There are three iconic examples of this that have become household names:

1) Financial Services. The incumbents had such a stranglehold on the payments industry that it was difficult for smaller businesses to accept payments. Stripe's founders saw an opportunity to facilitate easy credit card payments online, bypassing the incumbents, and built a thriving and disruptive business on making things easy for small players online.

2) The Taxi Industry. With minimal competition, the taxi industry hadn't needed to change for decades. They had, at best, minimally functioning apps, and customer service had an arrogance to it – "we'll pick you up when we're good and ready to." Then Uber came along with a highly functional app and convenience, and the taxi industry has been scrambling to catch up since.

• 3) Hotels. Just as Uber addressed the poor customer experience with taxis, Airbnb has become a solution to those looking for accommodation while travelling.

Disruption drives many of the most successful businesses. All you need to do is find out what consumer pain points are when dealing with incumbent industries.

Strategy 7: Look for technological shifts

Entrepreneurs need to be a little careful when looking to innovate with technology – just how often are great ideas failures because they were "ahead of their time?". When it comes to innovating with technology, the secret is to look at technological shifts, and what opportunities come with that.

For example, Netflix only became viable because Internet and mobile broadband speeds across the globe got to the point that streaming in high definition was affordable. Fitbit only became viable because Bluetooth connectivity reached such an advanced point that seamless communication with a smartphone was possible. AR applications on mobile phones only became viable when a critical mass of people had mobile phones that were compatible with AR.

The key here is to look for shifts in how technology is consumed, and look for opportunities that might emerge from that. Currently, the big trend is the global rollout of 5G mobile broadband. The common wisdom is that the ultra-low latency and vastly improved data transfer speeds of 5G will allow for applications that haven't even been dreamed of yet. Many of the successful entrepreneurs in the tech space over the next few years will be the ones doing the dreaming.

Strategy 8: The 10x rule

Another strategy to build a successful startup is to "10x" something – make existing businesses 10x easier, 10x faster, 10x more productive, or 10x better in some other way.

This is how Amazon got its start. It's hard to remember back to Amazon's genesis, but it was originally an online bookshop. Its initial success was that it was 10x better in that it offered a vastly greater range of books than bricks-and-mortar stores (actually many times more than 10x, but the rule stands). Why would a consumer waste time going from bookstore to bookstore to find something obscure when a simple search on Amazon would have it on its way?

Amazon has subsequently made investments to ensure that it gets products to consumers 10x faster, that its scale across all things is 10x what any other online retailer can do, and that understands its customers 10x better, so that it's always recommending the right products and promotions where other retailers are sending customers generic EDMs.

The 10x strategy might need greater resources to scale the business successfully, but it is incredibly compelling. Especially for businesses in incumbent fields.

Strategy 9: Find opportunities in non-obvious markets

Another opportunity for entrepreneurs might be to look for businesses that have failed, and see whether they were simply "ahead of their time." If that's the case, then perhaps now is the time to give the idea a second spin.

There's no better example of this than in video games. Nintendo is a generally successful company, but in 1995, it made a catastrophic mistake with the "Virtual Boy" – a virtual reality console that sold dismally and was pulled off the market just months after releasing. The world just wasn't ready for virtual reality and the technology wasn't good enough for it to work to customer expectations.

Many years later a startup called Oculus took to Kickstarter with a virtual reality headset – the Oculus Rift. It was so successful that Meta (then Facebook) bought the company for $2 billion, thus proving that now was the right time for virtual reality.

The business world is filled with these "false starts", so have a look into them, and see whether the market, audience, and technology has shifted so that they are now viable.

Strategy 10: Iteration as innovation

One final, perfectly valid option for a viable business is to iterate, rather than do something completely new. There are a lot of great ideas out there that have driven successful businesses. Taking that idea and adding something to it can result in a very successful challenger startup.

Tesla cars aren't successful because they're a completely new approach to car manufacture and design. Tesla cars look and drive like normal cars. Because they successfully replace one, old source of fuel for the car with a newer, superior source of fuel, the Tesla business has become enormously successful despite it not being that innovative.

Other advice for generating startup ideas

Once again, business ideation has no hard-and-fast science to it, and while those ten approaches above are all proven, some of the very best business ideas have come from even more unusual places.

Use an AI startup idea generator

There are a lot of these on the Internet, and most of them will spit out ideas that are garble and garbage. On the other hand, after having a laugh at how silly the AI's "idea" is, perhaps an associated idea will trigger in your mind to investigate, and that one will be gold.

Hang out with more creative people

Most entrepreneurs are good at networking with other entrepreneurs, whether that be on LinkedIn or in formal business networks. However, you could also consider joining groups that are focused around creatively minded people, as they'll give you a different perspective on things and, often, great business ideas.

Apple wouldn't be what it is today without the years that Sir Johnathan Ive spent designing products with a distinctly artistic flair.

Final Advice

Business ideas aren't enough on their own. A true entrepreneur's potential comes down to their ability to identify and solve heart-felt problems. Once you've spun up some ideas around a gap or opportunity in the market, it's time to delve a bit deeper and ask yourself, ‘is this a problem worth solving?'

Learn what characterises a "good" problem to solve and how best to recognize if your idea has any potential here.