Article first published as A Serial Entrepreneur’s Guide to Uncovering Awesome Startup Ideas on Technorati.
Seth Epstein, Founder and CEO SocialStay, former Founder and CEO of FUEL (acquired by Razorfish) and Emmy Award winner for his work on the X-Games, recently spoke at UC Santa Barbara as part of the Technology Management Program’s Distinguished Lecture Series. His talk was especially intriguing, as he attended UCSB, but dropped out to start a clothing design company.
In this 8-minute video excerpt from his recent talk, Seth describes the practical, hands-on methodology that he uses on a day-to-day basis to identify and vet his entrepreneurial ideas.
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You can watch Seth describe how he discovers great startup ideas below or on YouTube here: http://youtu.be/Da9vj6nAgsI
Chaos By Design
Seth is a design-oriented entrepreneur, with little desire to document details. In his entrepreneurial Tribe, he is the Shaman. Even though he is not process oriented, he has developed a simple, yet methodical approach to identifying, cataloging and vetting his entrepreneurial ideas.
In my UC Santa Barbara Entrepreneurial course, I require the students to submit a venture idea every week. My goal is to encourage them to open their eyes to the myriad of startup opportunities that surround them. To help guide the students’ evaluation of the feasibility and merit of each idea, I require them to complete a one-page form, as specified in Entrepreneurship Is A Compulsion. I was intrigued to learn from Seth’s talk that he utilizes a similar approach to capture and evaluate his ideas.
Seth notes that, "Ideas are a lot like exercising. The more you play around with ideas and you write them down, the better. The quality of your ideas is actually going to improve."
Seth’s approach to identifying great ideas is similar to the startup equation I describe in How To Identify A Great adVenture Opportunity: (Passion + Solvable Problem) * Sufficient Reward = Great adVenture. Per Seth, emerging entrepreneurs should, "Find problems that need solving… that resonate (with you). Find problems in the area you are passionate about. Just do stuff that you love to do because the problems will come find you… if you are entrepreneurial."
This process also helps Seth avoid distracting himself from the core idea he is currently executing (currently SocialStay) while still capturing the idea. According to Seth, "This is how I evaluate an idea. This is a lead up into an executive summary. When I get an idea, because I get so many ideas and I don’t want to act on them or distract myself, I have this form that I fill out. I sit down and I answer these questions. I literally just do it on my computer, really quick."
Ten Step Idea Evaluation Worksheet
Seth reduces the overhead associated with his idea creation process by quickly completing the following worksheet.
- The Idea – brief description
- Problem Solved – what is broken that the idea fixes?
- Who Has This Problem? – market size, characteristics, just me?
- How Resolved? – is the resolution economical, practical, technologically feasible?
- Business Model – how can I make money solving this problem for the identified audience? How much money can I make?
- Competition – which competitors will prove to be the most formidable? What potential competitors might arise – can they be converted to partners? NOTE: competitors validate your idea, if you lose heart after one Google search, you are not sufficiently passionate about the idea.
- Differentiation – what color are my elephant’s sunglasses, how I will beat the competition? To what extent are the points of differentiation sustainable?
- Challenges – what potential pitfalls that could cause the idea to fail?
- Resources – what contacts, capital, facilities and other assets will be required to execute the idea?
- Fit – do I have the appropriate skills and passion to successfully execute this idea?
Modify this checklist to suit your personal style and the specific nature of your ideas. The key is to document and challenge the veracity of your ideas at the time they occur to you. The format you settle upon is of little consequence, as long as it allows you to quickly and contemporaneously capture the essence of your epiphanies.
Documenting ideas in real time is an effective, disciplined approach to sorting great ideas from lame ones. The worksheets also serve as library which you can build upon and interchange ideas. In many cases, an aspect of a particular opportunity will have unforeseen applicability to a subsequent venture. You eliminate the risk of "misplacing" such insights when you take the time to document them at the time of their birth.
Seth’s process allows him to capture ideas, and only spend more time refining those that become an earbug, as described in Your Startup Idea Must Be All Consuming. As he notes in his talk, when an idea continues to recur to him over a period of time, then he knows it has validity and is something about which he is passionate. "The reason I do it, is because, if a few months later, the idea comes back to itch me, I’m like, ‘Maybe I should pay attention to that.’ It is a good way to storehouse ideas and also it is a good way to exercise your brain."
Filling out an idea worksheet is like hitting the gym. Each workout may seem inconsequential and you may be tempted to skip it, "just this once." However, the cumulative effect of formally identifying and vetting entrepreneurial ideas is akin to a consistent workout regime. The results will take longer than you would like, but eventually you will be packing on entrepreneurial muscle that will help you uncover and validate great ideas, one of which might prove to be the basis of your next adVenture.