HOW TO CHOOSE A STARTUP IDEA TO WORK ON.
Each year, about Tens of millions of people startup businesses, however only a handful of them succeed. Statistically, 80% of entrepreneurs starting a business fail within the first 18 months –Forbes, 50% of startups fail after operating for four years. –Statistic Brain.
While the above statistics maybe scary, a whole lot of startups have defined the odds, creating success where many have found failure. One thing that these successful startups have in common is that they both possess the startup idea that works; – I do not want to say that they have the best startup idea, because we have seen cases where the best ideas flop. If you are looking out for a startup idea to work on as an entrepreneur/ wantrepreneur, you may want to start from dotting the‘I’s to crossing the‘t’s stated below.
DO YOU HAVE A SMALLER MARKET SEGMENT YOU CAN FOCUS ON?
Your ability to answer the above stated question can help you identify your market audience. While some mentors will usually advise you to start out big or focus on a larger audience, this advise may be good but it won’t come in handy when the big companies notice that a new company is about to drag a market share with them. They wouldn’t think twice before crushing you. In order to conceal your presence while making an impact, focus on a small market that has potential of streaming big.
IS THERE AN UNDER SERVED MARKET SEGMENT OF A BIG COMPANY?
One good thing I like about the type of ideas generated from this question, is that the ideas have already been proven successful, just that the big companies are ignorantly under serving the market segment.
A typical example of a startup idea generated from this question is the story of Zappos, The founders instead of starting a general online commerce company that would compete with Amazon, they choose to focus on the retails of Shoes only. Today, Zappos is the largest online shoe retailer. In 2009, Amazon acquired Zappos for the sum of $928 Million. A typical example of a startup idea that works!
DO YOU NOTICE AN AWKWARD BEHAVIOR?
I believe Elon Musk and Peter Thiel must have asked themselves why people have to go to the bank, stand in a long queue in order to make payment, when an alternative method could be provided? Boom! That’s Paypal. Another startup idea that works!
While the principle root of entrepreneurship teaches that one has to look out for a need and provide its solution in order to run a successful business, Failed companies have also shown that it doesn’t just end in providing solution to an identified problem. Does your targeted audience want this solution that you are providing? If the answer is yes, then you are the right track.
Good Luck on your entrepreneurial journey.
Entrepreneur| I track Startups and Fellow Entrepreneurs like me, I bring them to the Lime Light|