I have run across two schools of thoughts about how to generate startup business ideas.
The first is basically to “Start Something You Know.” Noah Kagan of AppSumo strongly endorses this approach. To quote the Silicon Hills blog, “Kagan … advises people to test their idea on friends and to find a few customers who are willing to pay for the product or service.” There is a lot to recommend this approach. For one thing, it is easier to approach friends than perfect strangers during the initial validation process: you already have built-in trust and you know how best to reach them. It is also likely that you will be passionate about the idea and more likely to stick with it through the inevitable ups and downs.
A recent Wharton Entrepreneurship blog post by Ed Nevraumont outlines a second approach: “Find a Boring Industry.” Nevraumont’s approach “means doing research and finding an area that is less explored.” This approach prevents entering crowded markets with me-too ideas that are common with the “Start Something You Know” outlook, particularly in consumer and small-business markets. Nevraumont cites “dozens” of conversations with would-be restaurant entrepreneurs that center around the same four basic ideas, and points out that restaurant owners get multiple calls per day from would-be entrepreneurs pitching them on new ideas.
Recently I have undertaken to research a “boring” industry. Very quickly, the advantages of the “Start Something You Know” approach have become evident, because I do not actually know anybody in this industry. Following Nevraumont’s advice to “do the research” means I need to forge relationships with people in that industry, get them talking, and validate that the problems I think they have are, in fact, at the “top of their totem pole.”
In my judgement, because online forums are not so popular with this industry’s participants, the most effective way to meet them is cold calling. I know, I know, nobody likes cold-calling. It is outside of just about everyone’s comfort zone. But you get them on the phone where it is harder to say “no” than it is to delete an email or ignore a search ad.
In researching ways to make cold calling more effective, I ran across Ash Maurya’s blog post from a year ago in which Robert Graham, author of the book Cold Calling Early Customers, gives tips on how to make cold calling worth the time.
Digging a little deeper into Graham’s blog, I particularly liked this post on how to offer something on a cold call to receive the help you seek in return. Also helpful is this presentation Graham put together:
If you are going to pick a “boring industry,” perhaps leveraging Graham’s advice on cold calling for customer development can help overcome the problem of not knowing anyone in that industry. As for my experience so far, I have not achieved the 100% success rate Graham got on his cold calling campaign. Following Graham’s advice, I need to go back and tweak my efforts to arrive at the right formula for getting the response I am looking for.