How to identify a profitable idea for your startup
If you are thinking about starting a business, you probably have some idea in your mind and have already convinced yourself that it is going to be the next big thing. I wish that would be true.
Do you know that single biggest reason for the failure of a startup is building a product that no one wants? I have listed down a few points from my experience starting up to help you identify a profitable idea.
Don't look out for unique, look out for valuable
Recently, I was talking to someone who was quite excited about the uniqueness of his idea. He kept reiterating that there is no one in the market who has done it so far. I pointed out to him that he should first find a value in the idea for the end customer and not worry so much about being unique.
You can start another Ola cabs that is highly valuable to the traveller but if you launch services for only women, then you can charge a premium amount by ensuring the safety and security of your customer. The idea is valuable, not so unique but highly profitable because you are winning your customer by valuing her safety more than offering price discounts.
Solve a real problem of the real customer
That's where many people fail. They try to solve imaginary issues of imaginary customers. They have their notions about the problem and just imagine that clients will like to use the product if they solve the problem.
I started building ERP for schools in my first startup without analysing the issues faced by them. I was churning out features for parents, teachers and school management without ever talking to them. I built a system with all the features that my competitors were selling, but no one really cared for my product.
Should I disclose why I was not able to sell the features that even my competitor was selling? Schools were not using those features. Yes, the real problem was the low usage of school ERP system because most of the teachers were not comfortable with computer software. They did not have time and the software was not solving their problems.
Rather, I should have talked to teachers and built fewer features to solve their real problems and save their time. That's where you find profitable ideas – by solving customers’ real problems.
Spend more time with creative people
Spending time with creative peopele would help you come up with brilliant ideas of your own. When you spend time with creative people, you come out of your routine thoughts. They help you think beyond. A little clue about doing the same thing with a difference can transform your rudimentary idea into a profitable one.
There are plenty of companies that did the same old thing but in more creative and innovative ways. Like Housing for real estate search, Canva for creating designs and Apple for electronic gadgets.
Find a fault in existing product or service and fix it
That is very easy to do if you are a customer of any product. You know that the product is working but needs a lot of improvement. You can take build a better version of the same product.
For example, there were many customer complaint forums where people used to vent out their frustration about the bad experience with telecom, electronics and insurance companies. There were legal firms which were dragging the companies to consumer courts. But that was not solving the problem for every consumer.
Akosha solved the problem of getting quick and better customer service from big companies.
Don't follow the hot trends
Finally, I’d suggest you don’t follow the hot trends when thinking about starting your venture. What was hot five years ago is not hot today, what is selling like hot cakes today will not exist after few years (or may be months). You cannot build an e-commerce company like Flipkart today, nor there be another Ola cabs, but you can find a lot of other interesting problems to solve around e-commerce or transport industry.
Go with your hunch, find your team and build the next big thing. Connect with me if you want to discuss anything related to starting up.