How to Hack Your Way to a Big Business Idea

One of the most common and highly publicized Silicon Valley myths is that the biggest, most innovative companies start from an instantaneous moment of experiencing a problem followed by a lightbulb flash where the billion-dollar solution formulates, perfectly, in your brain. But what many serial founders and venture capitalists understand is that entrepreneurship is, in fact, more often a thoughtful and iterative process that is meticulously planned over a span of months or years.

Most would be surprised at the number of companies where the business actually comes first and the visionary story is backed into later. Included here are some ideas to get aspiring entrepreneurs started. Try working through these steps and see what you can come up with. (Previously published on Forbes.com)

1. Explore markets with the greatest potential.

Venture capitalists think about three core areas when evaluating a company: team, product and market. Reasonable people can argue about which of the three is most important, but if you start with a large market versus a smaller one, your likelihood for success increases exponentially. Consider which groups, either economically or by sheer number of membership, have the greatest spending power. There’s no right way to do this, but consider taking a design thinking approach—use a white board and sticky notes and throw up anything that comes to mind. Sort them and remove the less interesting ones later. A current, high-focus group is baby boomers/senior citizens. As the largest consumer group by age, solutions that serve this population will be critical in the next five to ten years. There are other markets that are sizable, but are also highly tapped, like financial technology. Thousands of fintech companies have been started in the last five or so years. But the important point here is knowing this trend started when people began to notice finance and banking were expansive markets with a lot of unhappy users.

2. Think about the chosen market’s biggest pain points.

The next step is to uncover the most pressing pain points for which people in your chosen market would pay hard-earned of money to resolve. This task can be done even if the market isn’t large by number. That said, if the market is not wide and deep, founders will need a high-value product for which a small number of people have a high willingness to pay. So explore this. Think about it in terms of how many customers it would take to hit a certain revenue target. If you want to reach $10,000, consider how many customers you would need if they pay $5 or $100 each.

3. Talk to potential customers.

After you’ve identified a market and pain points, talk to potential customers. Even if you think you know the scope of the problem, there’s likely more to learn. Countless companies have failed thinking they know how to solve a problem without being completely sure there’s even a problem to be addressed. If you have an idea in mind, formulate your customer questions around understanding the core of the pain point: What is the underlying cause? What about the structural or economic environment make it such a tough issue to solve? What solutions currently exist in the market? Why are those solutions falling short? Is there a technology gap that could help bridge the need and the solution? Has the customer created a makeshift solution on their own?  All of these questions help uncover what the true need is and provide potential insights to start working toward a solution. The biggest key, though, is not starting with the solution in mind ahead of your interviews. Go in with a desire to understand the problem and the customer persona. 

4. Consider your skillsets.

With an identified market, problem and customer, it’s time to determine how your specific background and skillsets can translate in a meaningful way to the solution. Maybe you were a former teacher, worked in banking, or spent time as a marketer. Do any of those skills make sense for this company? If they do, put it in the story. But if they don’t, connect with someone who does have a background that could work on the company. They could join as a cofounder or you can simply pass the idea to them and work on something else. Everything isn’t for everyone, that’s okay.

5. Test the product.

Do some quick mockups of potential solutions and test them with your customer type. See how they respond. Do they love them? Hate them? Are they indifferent? There are some great online options that let you create samples of what an app would look like on mobile or help visualize a landing page for a product. This is also the perfect time to run some cheap ads to check the interest level. These tests can help clarify who and where to target for your go-to-market strategy and add to the narrowing of your critical customer type.

6. Iterate. Keep at it.

Make little tweaks to your mock-ups based on the feedback from your tests. See what happens when the wording or colors are changed. Note how people respond when they are allowed to take the reins on minimum viable product (MVP) versus you walking and talking them through it. If the customer insights show that the product has struck a nerve, don’t let up! Keep digging. If the insights show you’re consistently falling flat, fail fast! Trash it (or throw it on the shelf) and start again. 

7. Create/Complete your story.

If it all works out, figure out how to make it all make sense. Move the puzzle pieces around so that the market, the product and the founding team that you’ve put together make sense for this company. Here’s the thing, the work now has been done to create a compelling company—talk about that. Talk about why the team fits, why this market is perfect to capture and how you’ve identified the right problem and the right solution. 

What’s most important for founders to walk away from this piece with is this: if you don’t have a lightbulb moment with a crystal clear, billion-dollar company in mind, that’s okay. If you do it right, most venture capitalists honestly won’t know (or care) the difference between a lightbulb business and a more thoughtfully planned business with a story that came later. This approach is just flipping the business-building assumption on its head: inducing versus deducing. Now go and create the company you never dreamed of!