The ideation process for businesses
The diagram above reflects the circular nature of ideation. It is something that all businesses should be doing regularly, not just in the start up phase. It is through ideation that businesses can adapt and stay in business. An idea that was perfectly marketable two years ago, may now be irrelevant or even impossible. Constantly looking for new ideas, refining them and testing the viability of these ideas, is the hallmark of sustainable businesses
The three types of ideas
New ideas are usually borne of necessity or from sudden technological advances. The impact of the Covid-19 pandemic will likely trigger a distinct acceleration in the fourth industrial revolution and hence new business ideas. Then there is disruption – an idea that turns an industry on its head. Examples such as Airbnb, Uber, Skype, Amazon, literally changed human behaviour. In business, most ideas fall into the category of improvement… a better solution or version than currently exists. For instance, the electric car is still a car, but in response to climate change, it will likely replace the petrol guzzlers. Creating a better iteration of something may not sound quite as sexy as being a disruptor, but it can still be a great business idea.
Where can I get ideas from?
“You can’t have good ideas unless you’re willing to generate a lot of bad ones.” Seth Godin
Good business ideas are the basis for products and services that make money. It’s simple, without an idea, there is no business. While you may not consider yourself to be creative, humans are naturally creative beings. It’s what we do. But as with everything, practice makes perfect.
Starting with a blank canvas is rarely successful when generating ideas, most people get their ideas from a pain point they are experiencing themselves, or they are inspired by articles, books, the news, conferences/webinars, listening to customers, conversations with people or the proverbial ‘aha’ moments such as apples falling from trees!
Asking the question ‘what if?’ is a useful source of ideation.
How does Ideation work?
A bunch of people come together who are either experts in the field, or a mix of experts and people with no credentials other than that they are willing to ask: “what if?” This is a process where ideas are thrown around and collected, with no ‘buts’ allowed. The aim is to build on each other’s ideas. Once the ‘storming’ is finished, only then do you begin to screen ideas out and look at what is doable. Social media is becoming a popular vehicle for brainstorming & testing ideas.
This activity goes well beyond what your ears do. It’s about being curious and non-defensive. What are the things that people (including existing customers) are talking about? What irks them? Customer complaints are a mine of valuable information, if you’re prepared to find out what is the specific pain point. What is important to them? What is your own experience of a particular product or service? When you next hear yourself or someone else say, “I wish they would…” ask yourself, “what if?”
The “5 Why Analysis” was introduced by Toyota. Employees were encouraged to ask “why?” at least five times to get to the root of a problem. A customer once asked me to give his staff customer service training. I applied the five whys in my meeting with him and thereby established that his bullying management style was actually the problem.
The world is literally at our fingertips, thanks to smartphones. Find out what is going on in your own industry, but also in other fields. Whether it is attending trade shows or watching webinars or staying abreast of the news, the more informed you are as a person, the more material your brain has to work with when trying to join the dots. For example, a customer pain point is that things take too long… Ask who is best at speed? Not, who is best in my industry, but who in the world, is best at speed? Formula 1 teams, Fighter jet teams, Usain Bolt, even horse racing may come to mind. Then ask, what is it that they do that I can apply to my business? Challenge your thinking – is it impossible or is it just difficult / never been done before?
No, it’s not a word, but it is a great source of ideation. Many entrepreneurs have successfully turned a hobby such as cycling, running, gaming etc. into a viable business. If you are a keen hiker, you know more than anyone the pain of blistered feet. If you can offer the solution, you already know the market and you are doing something you love to do. That said, your idea must be able to make money, otherwise, it remains a hobby.
How do I know if it’s a smart business idea?
These are useful questions to ask yourself and/or potential customers to test your idea:
- Does it solve a problem/need? – Why?
- How big is the problem? (A mild irritation or a real pain point?) – Why?
- Is the need big enough that the customer will pay? - Why?
- Can the customer pay now?
- How many customers?
- Can I accurately describe the problem and match the solution to it?
- What makes me unique in my market? - Why? (Is my idea superior or just another…)
- Will I be able to maintain my competitive advantage or is my idea easily replicable? – Why?
- Do my skills and experience suit the idea? - Why? (If you are not a chef or you have never worked in a restaurant, why are you opening a restaurant?)
- Does the idea excite me? – Why?
- Can I produce a prototype and physically test the idea?
- How long will it take? – Why?
- Do I know how much it will cost to provide the product or service? – Why?
- Can I sell the product or service at a profit?
“Ideation without execution, is delusion.”
Robert S Sharma