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2 - Ideation

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					2. Ideation


   There	
  are	
  thousands	
  of	
  businesses	
  out	
  there,	
  it	
  
   seems	
  like	
  the	
  only	
  way	
  to	
  succeed	
  in	
  business	
  is	
  to	
  
   come	
  up	
  with	
  an	
  incredibly	
  original	
  idea.	
  Right?	
  
   Wrong.


   In	
  this	
  chapter	
  we	
  talk	
  about	
  the	
  fallacy	
  of	
  the	
  
   good	
  idea	
  and	
  what	
  really	
  ma>ers	
  when	
  it	
  comes	
  
   to	
  business	
  poten?al.


   I	
  also	
  weigh	
  the	
  merits	
  of	
  sharing	
  your	
  idea,	
  and	
  
   present	
  a	
  handy	
  checklist	
  to	
  help	
  you	
  vet	
  
   the	
  strength	
  of	
  your	
  business	
  idea.


   Finally,	
  I’ll	
  review	
  the	
  
   differences	
  between	
  a	
  
   lifestyle	
  and	
  a	
  liquidity	
  
   business,	
  and	
  how	
  they	
  affect	
  
   the	
  direc?on	
  your	
  business	
  
   will	
  take	
  you.
The Fallacy of the Good Idea


 Ideas	
  Don’t	
  Ma>er

  How	
  many	
  ?mes	
  have	
  you	
  heard	
  somebody	
  say	
  “I’ve	
  got	
  a	
  great	
  idea	
  
  for	
  a	
  business?”	
  or	
  “I	
  want	
  to	
  start	
  a	
  business,	
  but	
  I’m	
  wai?ng	
  for	
  the	
  
  right	
  idea.”	
  I’m	
  here	
  to	
  tell	
  you	
  that	
  ideas	
  don’t	
  ma6er,	
  execu:on	
  
  does.


  The	
  truth	
  is,	
  most	
  successful	
  businesses	
  out	
  there	
  weren’t	
  born	
  from	
  
  from	
  amazing,	
  original,	
  genius	
  ideas.	
  They	
  were	
  cul?vated	
  by	
  great	
  
  teams,	
  owners	
  and	
  an	
  extraordinary	
  work	
  ethic.




                                                                                                                          Chapter 3: Ideation
  I’ve	
  seen	
  some	
  ideas	
  I	
  thought	
  would	
  never	
  work	
  become	
  top	
  
  businesses,	
  and	
  I’ve	
  seen	
  what	
  I	
  thought	
  were	
  great	
  ideas	
  fall	
  apart.	
  


  Don’t	
  get	
  too	
  caught	
  up	
  on	
  your	
  idea.	
  Too	
  many	
  people	
  say,	
  “Oh,	
  I	
  
  want	
  to	
  start	
  a	
  business,	
  but	
  I	
  don’t	
  have	
  an	
  
  original	
  idea	
  yet.”	
  Don’t	
  fall	
  into	
  this	
  trap	
  
  of	
  wai?ng	
  for	
  a	
  brilliant	
  light	
  bulb	
  
  moment.                                                                        Quick Tip
                                                                                    Get some tips from
  If	
  you’re	
  looking	
  for	
  an	
  idea,	
  remember	
  
                                                                                    an investor how to
  this:	
  the	
  best,	
  most	
  successful	
  businesses	
  
                                                                                    settle on the right
  are	
  based	
  on	
  taking	
  something	
  else	
  that's	
  
  successful	
  and	
  figuring	
  out	
  how	
  to	
  do	
  it	
                    business idea.
  different	
  and	
  be6er.
Sharing	
  Your	
  Idea

 It	
  can	
  be	
  difficult	
  to	
  decide	
  if	
  and	
  when	
  to	
  share	
  your	
  idea.	
  There	
  are	
  
 two	
  schools	
  of	
  thought	
  when	
  it	
  comes	
  to	
  this	
  dilemma:



 1)	
  Keep	
  your	
  idea	
  secret	
  out	
  of	
  fear	
  it	
  will	
  be	
  stolen
 2)	
  Share	
  your	
  idea	
  with	
  everybody	
  for	
  feedback



 Guarding	
  your	
  idea	
  is	
  an	
  temp?ng	
  approach,	
  because	
  it	
  prevents	
  
 people	
  from	
  taking	
  your	
  idea,	
  or	
  cri?cizing	
  it.




                                                                                                                       Chapter 3: Ideation
 However,	
  by	
  telling	
  everyone	
  your	
  plans,	
  you	
  open	
  up	
  to	
  a	
  variety	
  of	
  
 valuable	
  opportuni?es	
  including:


 1) 	
  Making	
  connec:ons	
  with	
  people	
  who	
  might	
  be	
  able	
  to	
  help	
  you	
  
 2) GeSng	
  valuable	
  feedback	
  from	
  a	
  large	
  pool	
  of	
  people
 3) Adding	
  social	
  pressure	
  to	
  follow	
  through	
  with	
  your	
  goals



 The	
  final	
  benefit	
  is	
  key	
  because;	
  if	
  you	
  have	
  any	
  integrity	
  and	
  self-­‐
 worth,	
  you’ll	
  be	
  more	
  likely	
  to	
  actually	
  kick	
  off	
  your	
  business.	
  Put	
  
 yourself	
  in	
  a	
  posi?on	
  where	
  you	
  feel	
  as	
  much	
  pressure	
  as	
  possible	
  to	
  
 follow	
  through,	
  and	
  you’re	
  more	
  likely	
  to	
  get	
  through	
  the	
  hardest	
  
 part	
  of	
  running	
  a	
  business:	
  star?ng	
  it.
The Idea Checklist


  □   Does	
  it	
  solve	
  other	
  peoples’	
  problems

  □   Do	
  a	
  lot	
  of	
  people	
  have	
  this	
  problem

  □   Am	
  I	
  passionate	
  about	
  the	
  idea

  □   Am	
  I	
  willing	
  to	
  commit	
  the	
  next	
  5-­‐10	
  years	
  of	
  my	
  life	
  to	
  this	
  idea

  □   Are	
  others	
  successfully	
  doing	
  something	
  similar

  □   Does	
  it	
  have	
  too	
  many	
  compe?tors

  □   Can	
  I	
  do	
  something	
  substan?ally	
  different	
  or	
  be>er	
  than	
  others

  □



                                                                                                                       Chapter 3: Ideation
      Can	
  I	
  build	
  the	
  businesses	
  on	
  my	
  capital	
  resources

  □   Could	
  I	
  have	
  an	
  product	
  and	
  customers	
  in	
  90	
  days	
  or	
  less

  □   Are	
  poten?al	
  customers	
  giving	
  overall	
  posi?ve	
  feedback	
  over	
  
      75%	
  of	
  the	
  ?me

  □   Do	
  I	
  have	
  a	
  background	
  &	
  skill	
  set	
  compa?ble	
  with	
  this	
  business

  □   Do	
  I	
  have	
  compe??ve	
  advantage	
  on	
  how	
  to	
  get	
  customers

  □   If	
  I	
  don’t	
  start	
  this,	
  will	
  someone	
  else

  □   Can	
  I	
  court	
  mentors	
  who	
  have	
  been	
  successful	
  doing	
  something	
  
      similar

  □   Does	
  it	
  have	
  a	
  high	
  likelihood	
  of	
  success

  □   Does	
  the	
  business	
  risk/reward	
  match	
  my	
  personal	
  risk/reward

  □   Does	
  it	
  help	
  me	
  fulfill	
  my	
  purpose	
  
Lifestyle vs. Liquidity Business


 Lifestyle	
  Business

 A	
  lifestyle	
  business	
  is	
  a	
  smaller	
  company	
  
 that	
  is	
  usually	
  funded	
  personally	
  or	
  
                                                                   Examples:
 through	
  a	
  bank	
  loan.	
  Lifestyle	
  businesses	
  
 steadily	
  generate	
  profit	
  throughout	
  their	
  
 life,	
  and	
  are	
  built	
  to	
  be	
  sustainable.          A boutique shop,
                                                                   a small-scale
                                                                   retail store, a
                                                                   salon, a




                                                                                      Chapter 3: Ideation
                                                                   specialized
                                                                   consultancy, a
                                                                   daycare
Liquidity	
  Business


                                                          A	
  liquidity	
  business	
  is	
  a	
  high-­‐
  Examples:                                               growth	
  business	
  idea	
  that	
  
                                                          oien	
  requires	
  large-­‐scale	
  
   Websites, mobile                                       funding,	
  including	
  angel	
  and	
  
   technology such as                                     venture	
  capital	
  rounds.	
  This	
  
   apps, large scale                                      business	
  usually	
  makes	
  the	
  
   manufacturing or                                       most	
  of	
  its	
  money	
  through	
  a	
  
   production                                             large	
  liquidity	
  event.




                                                                                                             Chapter 3: Ideation
   Resources Recap
     • 	
  	
  Se>ling	
  on	
  a	
  business	
  idea	
  (video)

     • 	
  	
  When	
  to	
  share	
  your	
  business	
  idea	
  (video)
     • 	
  	
  Is	
  your	
  business	
  fit	
  for	
  venture	
  capital?	
  (video)	
  
         • 	
  Bonus:	
  (Startups	
  Lecture)
     • 	
  	
  The	
  Idea	
  Checklist	
  (Doc)

				
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