This is our step-by-step process of how we were looking for ideas that made millions of dollars in revenue.
Over the past few years, we’ve heard hundreds, if not thousands, of business pitches, reviewed many ideas, and did extended market research on many of them.
While most of those ideas sounded good in the beginning, we have decided not to take part in them. The reason was really simple, we just didn’t have enough confidence, based on our experience and strategies, that they would succeed.
Market research opened for us new perspectives. From potential business models and pricing strategies to creative inspirations and even completely different product ideas.
But market research could be used not only to prove that your idea is worth testing, but they are also insanely helpful to start looking for inspiration and something that you would love to build.
We’ve managed to create a process (or a system, if you will) where we were able to efficiently analyze the market, collect the ideas, and use our custom-made frameworks to evaluate them.
Without this, it wouldn’t be possible to have a success rate of 40% from something that we’ve agreed to test to become a successful and profitable business with at least $1M in revenue.
We believe that one of the first things to do before trying to find the idea is to try to be as objective as possible and silence your inner voice which is definitely looking for some confirmation bias. It involves favoring information that confirms previously existing beliefs or biases.
For example, imagine that a person holds a belief that left-handed people are more creative than right-handed people. You will subconsciously ignore facts and look for the ones that support your thoughts. People usually like ideas and ignore the facts and that’s the first step to potentially wasting your money.
While it’s important to be inspired and open yourself to any idea there is, it’s also very important to check hard facts and understand if there is potential hiding beneath the shiny surface.
We’ve found out that the longer you have the idea in your mind, the better it sounds even if nothing has changed. That’s why it is crucial to list down the ideas, and be prepared to review and update them at least once per quarter.
We are proud of the 40% success rate that we previously had to kick off new ventures, but it might still sound a bit low. If you are putting so much effort into market research, why is it only 40%? That means if you decide to test and launch 10 ideas, only 4 of them will show you the traction that you are happy about.
You’ve probably seen this before, but on average, 90% of startups survive one year. Some of them have angel or seed investments, and human resources and still fail. Yet, more experience definitely helps.
Before achieving this success rate we were struggling with different businesses. Basically, any mistake you can think of, we did it. Wrong team members, too optimistic business plan calculations, focusing on wrong priorities or wrong markets, etc.
One of the reasons and inspirations to write this book was to help others avoid the mistakes that we made in the past.
We thought that in order to succeed you have to be first in the market, offer unique value propositions, great pricing, and, basically, stand out from the crowd, and that sometimes could be expensive.
The truth is that in most cases unless you are good in a specific niche and have a great understanding of innovations in the area and know how to do it, you can just follow the market and take a couple of percent of the market share to thrive.