How to find a GREAT business idea

Ideas will make or break your business.

Even though everyone says the opposite.

People love to give these famous examples like 👇

Slack started as a side project in a gaming company.

Twitter started as a tool for podcasts.

Paypal started as a security software company.

And yet, they all became billion-dollar companies…

People want to prove that ideas don’t matter and that only execution does.

But in my opinion, these examples show the opposite.

Because without spotting the right idea, at the right time, all these companies would be out of business by now.

So in this article, I want to give you super actionable ways of finding GREAT ideas that will generate cash.

Whether it’s to start a new business, pivot, or launch your new side project.

I’ll also share with you an exclusive document with checklists and templates you can steal to find a GREAT idea to work on at the end of this article.

How to find a GREAT idea?

You see, In the last years, I founded 4 SaaS businesses.

lempod, which I sold after crossing $600,000 in Annual Recurring Revenue.

lemlist, lemwarm, lemcal, which were valued at $150M.

And also acquired multiple companies for millions of dollars.

I’ve also helped 10s of thousands of entrepreneurs around the globe grow their businesses.

And to be honest, no matter how good you are at execution, if your idea is bad, you’ll never run a highly successful business.

In this article, I will be as practical as possible and share as many examples as possible with you.

I’ll go through:

  • What are the most common mistakes people make, and how to not waste 5 years of your life working on the wrong idea
  • What is the best way to find ideas that will generate cash, and why it’s OK to steal people’s idea
  • A 9 points checklist that came from 10s of interviews with famous multi-millionaires
  • And finally, how to transform a good idea into a great one

The 5 usual mistakes people make when starting a company

Let’s jump right into the 5 usual mistakes I see people make when they want to start a company.

Number 1:  Building something that’s not solving a real problem.

For example, Juicero raised $120M to build a high-end juicer that was essentially a very expensive way to squeeze pre-packaged juice pouches that you could actually squeeze by hand. It led to a lot of criticism and the eventual demise of the company.

Number 2:  Having a “solution” and THEN looking for a problem.

The Segway was invented as a revolutionary way of personal transportation. However, it was a solution looking for a problem, as it didn't address a specific need that wasn't already being met by existing modes of transportation like walking, biking, or cars.

Number 3: Not looking at who’s worked on it in the past.

Webvan was an online grocery delivery service that failed because it didn't adequately consider the complex logistics and low-margin nature of the grocery business, which had been a challenge for previous companies in the space.

Number 4: Looking for the perfect idea and getting discouraged if someone is already doing something similar.

Having competitors means that there’s already a need for a specific solution. Which is actually a great signal to validate an idea.

Number 5: Not being willing to share your idea with others because you’re afraid someone might steal it.

Long story short, no one will.

And even if they do, execution is what makes the difference in the long run.

But how exactly do you find an idea?

To me, there are 4 super efficient ways 👇

Number 1: Journal all the problems you’ve been facing for a month.

Back in 2019, people would be in groups of 10 to 15 people to support each other on LinkedIn when they posted.

I was part of one of these groups, and I found it really annoying to have to click manually on a link in order to go and engage on a post.

I thought it was a waste of time not to automate it, so I created lempod, and it grew to $600k in 18 months and eventually got acquired.

Number 2: Become an expert at something valuable, and then leverage this to solve a problem you’re in a unique position to see.

Before launching lemlist, I first learned how to do sales prospecting.

Then, I launched a cold emailing agency, so I knew how hard it was to book meetings with the existing sales automation software on the market.

That’s when I decided to launch lemlist, a sales automation platform focused on helping you send messages that get more replies.

Number 3: If you’re struggling to find an idea, ask yourself how you can make something that already exists and that you love... only 10x better.

Amazon, for example, started as an improvement of a bookstore. They wanted to be able to give a much larger set of choices and do it online.  

Number 4: Copy something that’s working BUT for another market OR with a differentiator.

Now you’re probably wondering whether or not it’s ethical to steal someone’s idea?

Long story short - there’s nothing wrong with this and here is why: ideas are not unique, and they don’t belong to “people”; they belong to eras.

Elisha Gray in the US and Alexander Graham Bell, originally from Scotland, both independently designed devices that could transmit speech electrically.

Their patent filings for the telephone were reportedly submitted on the exact same day in 1876.

They got the same idea at the same period because “eras”, on top of creating new problems to solve, also impact the way we think.

No idea is truly unique. Everyone copies something that already exists and adds a twist on top of it.

So how do you find great ideas to copy?

For example, if you want to build a SaaS (or software as a service), go spend some time on Product Hunt looking at all the products that are getting huge traction.

You can also go to websites like Baremetrics and look at the actual revenue of startups.

Or Acquire to see what businesses are getting sold and at what price.

The more you understand what financials can be achieved with a SaaS, the better you’ll know what to expect.

Then you can replicate this for your market or a market you know better.

9 questions to find a business idea

Now, I want to be even more practical on how to find a good idea before transforming it into something great!

You see, In the last years, I’ve talked to hundreds of successful startup founders; and I’ve realized that most millionaires I talked to had good business ideas.

And that they all followed a process that can be summed up by answering these 9 questions.

Question #1, and often the most disregarded, is the Founder market fit - meaning, are you the right person to solve that specific problem?

Sara Blakely founded Spanx because she had direct insight into the women’s apparel market. She created the product she wished already existed.

Question #2 is can you do it for at least 10 years?

If you think at all the big companies like Nike, Apple, Meta, etc. it took them more than 10 years to get to where they’re at today…

But that’s not the reason why you should ask yourself this question.

The reason is that building a business is hard, and when it gets harder, you gotta be willing to make sacrifices.

And if you can’t picture yourself work for more than 10 years on a project, the likelihood of you giving up will increase A LOT.

A good question to ask yourself is: do you picture yourself talking about the problem you solve at 5 am on TV in 10 years, or not?

Question #3 is How big is my market?

The bigger the market, the bigger the opportunity.

So when Alibaba went after the chinese e-commerce market, they knew that the market was huge.

In some cases, the market can be small, but it will expand as time goes by.

Coinbase is a really good example. They knew that the crypto market was going to explode, so they positioned themselves early on that market.

You can also start niche and expand later.

Amazon started as an online bookstore and expanded later on.

Question #4 is How critical is this problem?

Handling credit cards and spend management as a startup was a proper mess, and the market was totally underserved by traditional banks.

So when Brex launched, it was almost an instant hit.

Question #5 is, do you have competition?

Most good startups have competition.

And the reason why it’s good is because it’s already a validation that there’s a problem that needs to be solved.

Netflix, for example, started as a DVD rental service competing with Blockbuster. Later they evolved into streaming, facing competition from traditional TV networks and new streaming services.

Question # 6 is, did this only become possible?

Airbnb not only became possible with the internet's expansion, it’s also because of regulatory changes in various cities.

Question # 7 is, are there good proxies for this problem?

Peloton does home fitness. They Identified a growing trend in fitness towards convenience and technology integration, serving as a proxy for gym attendance.

Question #8 is, do you want this personally? Or do you know people who want this personally?

MyFitnessPal was Founded by Mike Lee who wanted a better way to track his diet for his wedding.

When you know the problem better, it’s easier for you to develop the solution.

But you need to be careful to validate the actual needs of others too.

Question #9 is, is this a scalable business?

Shopify provides a platform for businesses to create online stores, on top of being scalable because you can use it anywhere in the world, it also serves small businesses to large enterprises.

How to turn a good business idea into a great one?

Now that you know what a good business idea is, let's see how can you transform it into a GREAT idea.

A GREAT idea is at the intersection of an important problem, an underserved market, and something you’re excited about.

And to transform your good idea into a GREAT idea, you must focus on what I call a profitable market.

A profitable market has 4 key parameters 👇

Number 1: Level of pain, or how pressing it is to solve a specific problem.

The higher the pain, the more money people will be able to spend. For example, if I sell water to people in the street VS in a desert, the intensity of the pain is not gonna be the same.

Number 2: The purchasing power of your target audience.

You want to target only people who can afford your product or service.  

If you’re selling $10,000 watch and you target people making less than $2K a month, it will obviously not work.

Number 3: The ease to target, or how easy it is to reach out to the people you’re targeting?

If you target salespeople, technically there are a lot. Now if you focus on VP sales, there’s gonna be less people. And if you only focus on CEOs of companies with more than 5000 people - it will be even harder to get in touch with them.

Number 4: The growth potential.

How many new CEOs of companies of 5000 people are gonna appear each year? Not many. But you’ll have millions of new sales reps each year. Overall, it’s always best to have a market that’s growing and ideally underserved.

Overall the formula for a GREAT idea is the following

Market Need is the degree to which the business idea fulfills a significant need or solves a problem in the market.

Unique Value Proposition is the uniqueness and strength of the solution or value proposition offered by the business idea.

Competition is the intensity and capability of existing competition in the market.

Execution Risk is the risks associated with the execution of the business plan, including operational, financial, and market risks.

Each factor can be scored from 1 to 10. Great ideas score above 10.

Let me give you some examples 👇

Example 1: a bad idea.

Let's say someone wants to start a business selling ice cubes in Antarctica (I know, sounds crazy, right?).

Here's how it would score:

Market Need: Very low, people in Antarctica don't need more ice.

Unique Value Proposition: Low, it's just regular ice in a place full of it.

Competition: Low to medium, not many would think to sell ice there, but it's not really needed.

Execution Risk: High, logistical nightmares, no real demand, etc.

Example 2: a good idea.

Now let's take a look at a widely known and successful business: Netflix and how they shifted from DVD rentals to streaming in the early 2000s, when internet speeds were improving and consumers were starting to look for more convenient, on-demand entertainment solutions.

Here's how it would score:

Market Need: High, there was a growing desire for on-demand, easily accessible entertainment without the need to physically rent DVDs or wait for mail deliveries.

Unique Value Proposition: High, Netflix offered an online streaming service that allowed unlimited viewing of a wide range of TV shows and movies for a fixed monthly fee. This was a big shift from the traditional pay-per-rental model and eliminated the need for physical DVDs.

Competition: Medium to low, at the time Netflix introduced streaming there were few major players in the online streaming market, giving them an early mover advantage.

Execution Risk: Medium, transitioning from a DVD rental model to online streaming involved technological risks, the need for secure content licenses, and infrastructure development for reliable streaming.

You will be able to find all the important parts of this video, including unique checklists and resources, on this notion document.

Every week I’ll publish new articles on how to build and grow a B2B business that generates millions of dollars.

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Peace, love, and profit ✌️