The web is plenty of articles and resources on how to start a business and how to make money. However, there is an issue. Those resources give you plenty of advice and give you many options.
But a few help you start a business you’d be for the long term. Indeed, building up a business from scratch isn’t a simple task. Quite the opposite, It is a rollercoaster, which if you’re lucky it will take five to ten years to take off.
Thus it is critical that you not only start a business with great potential. But that you’ll also love what you’ll be working on and the problem you will try to solve. Therefore, finding a successful business idea means three primary things. It starts with solving a problem but then figuring out whether:
- That is something you like
- Something that you’re good at
- And that you can be paid to do
For that matter, the Bud Caddell’s diagram helps us in finding the sweet spot between these three key elements. If you do find yourself within that sweet spot, you can say you’re going after the right business idea and that you’re ready to become an entrepreneur.
Start with the problem in mind
As highlighted in the interview I had with Ash Maurya, author of Running Lean and Scaling Lean, and creator for the Lean Startup Canvas:
One of the biases that that many entrepreneurs fall run into is this premature love of the solution. Like the first principles in science, you almost have to deconstruct an idea. We have to start with the basics. In this case, when we look at our business, we have to break it down into customers and problems.
He calls this problem/solution fit.
Create your lean canvas
To help entrepreneurs clarify their minds on one page, you can use Ash Maurya, Lean Startup Canvas.
While this is an incredible tool, it focuses on how to get there.
Before you start using this incredible tool, you need to answer three primary questions.
Is this a problem I want to solve?
For most entrepreneurs, business is not a matter of choice, but rather an opportunity. However, in today’s world, where barriers to entry have become very low (digital businesses can be created relatively quickly and with meager investment), the competition is fierce.
Thus, endurance has become a critical element. And to make it through your business you need to love the problem enough to keep going for at least five to ten years.
Am I good at it?
As competition is fierce, it is critical that the solution you offer bring value to the table. For instance, when Brin and Page launched Google (initially called BackRub), it was argued that it was 10X better than any other search engine out there.
However, the Brin and Page not only fell in love with the problem of indexing and ranking a whole web (which at the time was way smaller than it is today) but they were pretty good at it (Google was born as result of their thesis as P.h.Ds).
Can I be paid for that?
No business model can be called viable if it lacks the monetization strategy or the profit formula. That’s because usually a business model to work in the long run has to be scalable and repeatable.
As we’ve seen to make a digital business take off so that you reach the so-called ramen profitability, it might take a few years. And if you don’t like or love the company you’re after it is very hard that the business itself will be successful. That’s because you’ll hardly have the willingness to put through the hard times.
Key takeaway
Starting a digital business, today has become fairly quickly. However, starting and growing a successful business is as hard as ever. That’s because, with the advent of the web, the barriers to entry have been lowered and pretty much anyone can test its entrepreneurial skills.
However, this also generates the confusion that you can build a business very quickly. However, to build a successful business from scratch, it might well take five to ten years of struggle. Therefore to understand if you are up to this struggle, you need to answer three basic questions:
- Is this something I like (love)?
- Am I good at it?
- Can I get paid for it?
If you’re able to find the sweet spot, you’re ready to start!
Key Insights
- The Importance of Finding the Right Business Idea: Starting a business from scratch is a challenging and time-consuming process. To ensure long-term success, it is crucial to find a business idea that not only solves a problem but also aligns with your passions, skills, and potential for profitability.
- Bud Caddell’s Sweet Spot: The Bud Caddell diagram helps entrepreneurs find the sweet spot between three key elements: solving a problem they love, something they are good at, and something they can be paid to do. Being within this sweet spot indicates that you have found the right business idea to pursue as an entrepreneur.
- Problem/Solution Fit: Ash Maurya, the author of Running Lean and Scaling Lean, emphasizes the importance of focusing on the problem before jumping to the solution. It’s essential to deconstruct ideas and analyze the potential customer problems that the business aims to address.
- Use the Lean Startup Canvas: The Lean Startup Canvas, developed by Ash Maurya, is a valuable tool to help entrepreneurs clarify their business ideas on one page. However, before using this tool, you must answer three critical questions to assess the viability of your business idea.
- Endurance and Passion: In today’s competitive business landscape, endurance and passion are vital for long-term success. Loving the problem you are solving will keep you motivated to overcome challenges and sustain your business for five to ten years.
- Value Creation: For your business idea to succeed, it must bring value to the table. Being good at solving the problem and offering a solution that stands out in the market are essential components of value creation.
- Monetization Strategy: A viable business model must have a clear monetization strategy or profit formula. Achieving ramen profitability, where your startup makes enough to cover founders’ living expenses, is an important milestone in the early stages.
- The Reality of Building a Successful Business: While digital businesses can be started relatively quickly, building a successful business takes time and effort. It’s important to recognize that success might not come overnight, and the journey may involve several years of struggle and perseverance.
Three Basic Questions to Determine Business Viability:
- Is this something you love and are passionate about?
- Are you skilled and proficient in addressing the problem?
- Can you develop a scalable and repeatable monetization strategy for the business?
Case Studies
Business Idea | Description | Passion | Proficiency | Monetization Strategy |
---|---|---|---|---|
Sustainable Fashion Brand | Create a fashion brand that focuses on eco-friendly and sustainable clothing, targeting environmentally-conscious consumers. | Yes | Yes | Sell sustainable fashion products through an e-commerce platform, subscription boxes, or physical stores. |
Fitness and Wellness Coaching | Offer personalized fitness and wellness coaching services, leveraging your passion for health and fitness. | Yes | Yes | Charge clients for one-on-one coaching sessions, create online courses, and sell fitness-related products. |
Digital Marketing Agency | Start a digital marketing agency, providing services like SEO, content marketing, and social media management. | Yes | Yes | Bill clients on a retainer or project basis for digital marketing services, targeting businesses seeking online visibility. |
Health Food Delivery Service | Launch a health-focused meal delivery service that offers nutritious and convenient food options to busy individuals. | Yes | Yes | Generate revenue through meal subscriptions or one-time orders, focusing on health-conscious consumers. |
Language Learning Platform | Create an online language learning platform with interactive courses and resources to help people learn new languages. | Yes | Yes | Charge users for access to premium language courses and offer additional resources through a subscription model. |
Sustainable Home Products Store | Open an e-commerce store selling sustainable and eco-friendly home products such as furniture, decor, and cleaning supplies. | Yes | Yes | Sell eco-conscious home products online and promote sustainable living to a broader audience. |
Virtual Event Planning Service | Provide virtual event planning services for businesses and individuals looking to host engaging online events and conferences. | Yes | Yes | Charge event organizers for planning and executing virtual events, offering packages and customization options. |
Pet Care and Grooming Business | Start a pet care and grooming business, offering services like pet grooming, pet sitting, and pet supplies. | Yes | Yes | Earn revenue through grooming services, pet care packages, and selling pet-related products in-store or online. |
Personal Finance Blog | Create a personal finance blog where you share tips, advice, and resources to help individuals manage their finances. | Yes | Yes | Monetize through affiliate marketing, sponsored content, and digital products like financial planning guides. |
Online Art Gallery | Launch an online art gallery platform where artists can showcase and sell their artwork to a global audience. | Yes | Yes | Generate income by charging artists a commission fee on sales and offering premium gallery features. |
Related Innovation Frameworks
Listen Also:
- History of SpaceX
- History of AOL
- History of PayPal
- History of WeWork
- History of Ethereum
- History of Trader Joe’s
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