The #1 mistake to avoid when coming up with business ideas [The Entrepreneur's Manifesto]

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This article is Part 1 in The Entrepreneur’s Manifesto: 6 Simple Techniques to Startup Mastery.

Gather ’round the campfire my dear friends, for today, we begin our hero’s journey down the road of entrepreneurship with the Entrepreneur’s Manifesto.

We start by asking a super-basic question of which the proper understanding is 100% essential to startup success.

Have you ever noticed that tons of people love the “idea” of being an entrepreneur…

…but did you ever stop to think about what it actually means to be an entreprenuer?  Like, if someone were to ask you “how would you define an entrepreneur” (dictionary style, baby!), what would you say?

I think most people would say something like this:

“Yeah man, they make cool companies and come up with kickass products!”

“They make tons of money working for themselves!”

“They didn’t want to work 9-5, so they gave the middle finger salute to their boss and went to work for themselves!”

“RC, why are you asking so many stuuuuupid questions?”

Because all of those definitions are wrong, and only one definition actually matters:

Entrepreneurs solve other people’s problems, and are compensated for doing so.

The heavens created the entrepreneur for one reason and one reason only: to solve other people’s problems in a meaningful, useful and profitable way.

Did you notice that the definitions mentioned at first focus on what you want?:

You don’t want a boss.  You want to make cool products.  You want lots of money.

You want, you want, and the world says, “I don’t care!”

The world says: “I care about what want!  And I’ll pay you if you can give it to me.”

As an entrepreneur, you #1 goal is to make your customers and potential customers so friggin happy that they will gladly and gleefully take money out of their wallet and put it into your hands; all the happier for having bought what you have to sell.

If what you’re doing isn’t going to provide value to the world and allow you to be compensated for the work you do, then what’s the point?

Maybe you think this sounds super-obvious…  ”of course RC; I have to make a product people will buy to make money.  Tell me something I didn’t know, kbye!”

But I mentioned it…and put it as the #1 technique on the Entrepreneur’s Manifesto for one simple reason:

The number of misguided entrepreneurs out there–who don’t understand what the purpose of starting a venture is (to create value and solve customer’s problems)–is unreal.  

Think of all the companies out there during the Dot-Com bubble.

Pets dot com

Remember these guys?

Think of your friends who are trying to start “the next Facebook” or another college textbook rental website…ideas you can just listen to and know probably won’t work.

Why do so many people seem to not understand the #1 truth of entrepreneurship?

It comes from a deep flaw in human reasoning that I call The Curse of the Me’s.

The Curse of the Me’s

Thousands of years ago, the as revenge for a year of sub-par human sacrifices (“we said 85% lean damnit!”), the gods placed an eternal curse upon mankind; a curse designed to disrupt and slow the creativity and innovation until it ground to an abysmal and unproductive halt.

The curse?

The Curse of the Me’s.

The Curse of the Me’s sentenced its victims to the punishment of only being able to think about innovative ideas–such as starting businesses and producing value in the marketplace–from their own perspective (“me!”), and without giving much thought (if any) to the perspectives and needs of others (ironically, the people who the innovator will try to sell his product to).

The 3 manifestations of the Curse of the Me’s are well-known.

Do you notice yourself justifying your business ideas with any of these curses?

Curse #1: The “Me Me Me!”

What it is: You pursue a business idea solely based on a mix of defensive emotion (being proud of your idea), and what you want or would pay for, without trying to ascertain what the broader market would care about.

Example: You’re determined to make an iPhone productivity app that you like simply because you thought of it and it seemed “cool” to you; and even though you haven’t gone out and tried to ascertain if if would actually help other people become more productive, you know you’re on to something because you “just know it will work”, despite the fact that there are about 32,486 other productivity apps in the App Store as of right this second.

dog wag

Pay attention to me! Pay attention to me! Pay attention to me!

How to fix it:I’d say this is probably the most common manifestation of the curse I see (including my very first startup idea, which was basically Yelp with 1 or 2 changes; I thought this idea was “great” for all the reasons I mentioned above).

Now, I’m not saying it’s bad to pursue business ideas you think would be useful for you.

I’m saying that your focus has to be more than just what you want: it has to be about what your customers (or future customers) want; after all, they’re the ones paying you, aren’t they?

Instead, take your business idea and go ask 10 people you think would be interested if they actually are interested.  Read 5 Steps to Be An Entrepreneur Today to understand how to do this quickly.

For more insight on this, read this excellent article by Paul Graham on coming up with startup ideas.

Curse #2: The “Me Too!”

What it is: Taking a “me-too” approach by taking an already-existing idea and changing it slightly to benefit you / some random group of people you thought of (again, just because you think it will “help” them, even though you did no research).

Example: Basically any idea that’s “like [insert popular website like Facebook], only for [insert supposedly under-served group here such as Husky lovers and igloo dwellers who live in Brazil].  EUREKA!”.

How to fix it: These kind of business ideas are usually justified by something like “what works for Niche A (or a large group that involves many niches) will definitiely work for Niche B.”

You then pat yourself on the back, crack open a brewski, and stare off into space with a goofy grin on your face as you imagine Brazilian eskimos going batshit crazy over your new business idea.”

“Me too” businesses have a false allure because it’s easy to ignore all of the things that made it easy / easier for the original company, and ignore all of the things that will make it so much harder for you.

While it’s true that basically every successful business builds upon what already exists in some way (and as such, is not fully “unique”), that doesn’t mean taking a carbon-copy of what already exists and throwing it over into some random niche will.

Whether or not your Facebook for igloo dwellers who live in Brazil is something for the market and your potential customers to decide; not something for you to decide while staring at a blank Word document for a hour trying to write down a good business idea that pops into your skull.

Curse #3: The “I want ME to look like an innovative entrepreneur!”

What it is: You care more about personal prestige and “making something innovative” (the metaphorical “next Steve Jobs”), while caring little about what you can actually do given your skillset, and what customers actually want.  Remember, if your 1st business idea is something innovative, you’re doing something wrong.

Example: “I just know I’m an innovative, management-type person!  So whatever business idea I come up with has to be one that changes the world!”…and then you come up with something overly-complicated of dubious usefulness (“dude, I’m like Van Gogh man, I’m not, like, understood in my own time).

Van Gogh

How to Fix It: Again, this was my first startup idea.  I thought I was “so smart” because I picked up on 1 thing that Yelp was doing a subpar job at, and though I could make millions around providing a service that did that 1 thing better.

A lot of people I know like this are constantly wandering around, just waiting for a “great idea” that will “put them in with the big guys” to pop into their heads.

They dismiss other business ideas they think “aren’t innovative enough” and “won’t make enough money”, even though their own business acumen is too low to pursue more innovative ideas even if they had the chance to do so (not that they would acknowledge that their business acumen is too low, of course).

Or whatever they do come up with is so ridiculously lofty that their ability to actually execute the idea is virtually nonexistent.

If you want to be the next Steve Jobs, or out there producing products in Silicon Valley, then that’s great!

But recognize where you are now and build your skillset first to work towards that goal, instead of jumping straight in (for example, my friend who co-founded the Las Vegas startup Romotive spent years developing his robot-making skills before launching his company).

The technique is simple: Focus first on the customer, and second on you.

"Would you like fries with that?"  Ask what people want, don't assume!

“Would you like fries with that?” Ask what people want, don’t assume!

In the comments below, let me know about how you come up with business ideas?

Do you think of things you think (or know) had a market that you could actually sell to?  Or did you just pick an idea you thought seemed cool?

What happened?

 

 

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