Brad Costanzo, e-commerce entrepreneur, angel investor and business growth consultant explains in the video below
For some apparently lucky startup entrepreneurs, ideas are a dime-a-dozen. For others, they come only after divine inspiration or catching lightning in a bottle by being in the right place at the right time.
If you’re the type of person who’s driven to succeed and believe you have what it takes to take an idea and run with it, jumping in with both feet and seeing your idea come to life…
Then this method is for you.
And it’s especially written for the soon-to-be startup founder who knows they have what it takes, but just don’t have the idea yet that inspires them to bring it to market.
One of the greatest opportunities awaiting driven entrepreneurs right now is the lucrative filed of SAAS (Software As A Service) or the App market.
Software now drives economy, and it’s never been more in demand, easier to create and easier to get to market than it is right now.
You understand this, but you’re thinking: “Yeah that’s great, but what if I don’t have an idea yet?”
If that’s you, then this is for you.
How To Get The Idea And Discover Your Money Making Market
There are few feelings more frustrating than having the desire to start a new business but not having the idea to get it started.
To shortcut the process, we’re going to start with picking a market that you’re either suited to serve or feel like it’s a natural fit.
Your market is important and you must enjoy the people and the issues in that market because it’s where you’re going to spend a lot of time. And some markets are better than others because they either offer more or less financial rewards.
The key is to pick one that’s lucrative, one that you enjoy and plays on your strengths.
Once you pick a market, you’re going to simply contact some of the established businesses in this market and request a short interview where you uncover some of the challenges they’re having, which may be opportunities for you to solve.
So pick a market, contact players in the market, ask them questions, solve their problems.
Billion dollar empires have been built on this business model.
What is the criteria for a good market to pick?
STEP 1: Determining Market Criteria
The ideal market will have the following characteristics for creating a software solution for them.
- The business currently pays for software solutions
- This is easy to discover. You can find out by asking them “What software do you currently pay for to run your business?”
- Industries with high prices, margins and customer value
- Companies who are making a lot of money have money to invest in their business. It’s much easier to extract money from profitable businesses.
- A large number of businesses in the industry
- A good rule of thumb is to target industries with 7,000 to 10,000 businesses (or more) across the country (or the globe).
- Successful: Startups and fledging businesses aren’t the best choice. Ideally the business is doing $250,000k minimum in revenue to be the least viable type of target.
STEP 2: CONTACTING THE MARKET
Typically you’ll make two types of contacts with your market:
Warm: You already know them or have a good referral into the person you’ll be speaking with and…
Cold: You have to meet and get a conversation with a stranger.
Your mindset going into this is important. You are not contacting these people to sell them anything (yet). You are an investigator trying to find ways to solve problems the market is currently having.
This is arguably the most fun and easiest part of the entire process because you literally have nothing to lose and everything to gain.
Treat it like a game and you’ll have a blast.
The Qualities of An Ideal Interview Candidate
Ideally you want to talk to either the business owner or manager or someone at the company with intimate knowledge of the operations so they’re also intimately familiar with the pain points and problems.
First, let’s look at a sample script for a COLD call to set up an interview appointment.
Them: Thank you for calling [company name]. You: Hi, my name is NAME and I'm a software engineer (even if you’re not). I’m conducting research on companies in the [INDUSTRY NAME] to understand some of the challenges faced and inefficiencies that might be solved with the right software solution, if it existed. There’s nothing for sale at all, but would need to schedule a short call with someone at your company, either an owner or manager, so I can ask some question and understand how best to help companies in your industry? Them: (If they say No, it’s ok, move on to the next one.) Sure You: Great, who’s the person I should speak with that might fit those criteria? Either a manager or owner or department head? Them: ME. You: Perfect, it will only take 10-20 minutes. How does your calendar look tomorrow (or even right now if you’re free?)
Them: Thank you for calling [company name].
You: Hi, my name is NAME and I'm a software engineer (even if you’re not).
I’m conducting research on companies in the [INDUSTRY NAME] to understand some of the challenges faced and inefficiencies that might be solved with the right software solution, if it existed.
There’s nothing for sale at all, but would need to schedule a short call with someone at your company, either an owner or manager, so I can ask some question and understand how best to help companies in your industry?
Them: (If they say No, it’s ok, move on to the next one.) Sure
You: Great, who’s the person I should speak with that might fit those criteria? Either a manager or owner or department head?
You: Perfect, it will only take 10-20 minutes. How does your calendar look tomorrow (or even right now if you’re free?)
THAT’S IT! (Relax, I’ll share with you some of the questions in just a moment).
Don’t expect to get everyone with this script, be happy if 10-20% say “yes” and remember, you only need one great interview to give you the next million (or billion) dollar idea.
HOW TO CONTACT BY COLD EMAIL:
Feel free to customize this email to your liking:
Subject: Quick question
My name is (YOUR NAME) and I am a software developer conducting research on how to solve a few nagging problems in the [THEIR INDUSTRY] through software that may or may not exist yet.
My reason for emailing you today is to ask what some of the biggest problems, issues or challenges you face running your business?
There is nothing for sale, I’m simply looking to uncover potential opportunities to help alleviate these issues for my next software project.
I’m happy to schedule a phone call or you can respond back, even if it’s a short reply, it’s appreciated.
Thank you in advance,
This email will get responses, and you’re free to customize it as you see fit, but we’ve found that keeping it simple is the key to getting responses. Don’t over do it in the first email introduction.
Your next steps are to follow up, set appointments and ask questions.
STEP 3: Conducting The Interview Process (Idea Discovery)
There’s no reason to make this a complex interview. You’re looking for the problems and challenges that are on the top of their mind. That’s because if they’re on the top of their mind now, they will be there when you present a solution for them to buy as well.
Start off by thanking them for being on the call and that you’ll keep it short, painless and confidential. Tell them they can answer in as much detail as they’d like, but you’re there to help them solve current problems and challenges with solutions that may or may not exist yet.
Sample Questions in no particular order
- Is there a big challenge, problem or roadblock in your business right now that you aren’t sure how to solve?
- What is the most time consuming and repetitive task you do in your business?
- What is one activity you wish you never had to do again?
- Have you lost any big customers or sales lately and for what reason?
- What software are you currently using? What do you like most and least about them?
- Is there any software you’re using that you wish it had a feature that doesn’t exist?
- The last time you stayed late or worked weekends, what were you working on?
- What is the most inefficient part of your day?
- Is there a problem you would pay money to solve if it existed right now?
Feel free to add any questions you’d like which might help uncover their pain points. Just listen closely to the answers and don’t worry about coming up with solutions on the spot.
Right now you’re just collecting data.
STEP 4: ANALYZE THE DATA
Now that you’ve talked to as many people as you feel comfortable with and collected real data…
It’s time to DIG IN!
Look for consistent problems that pop up.
Then do a Google search for those problems to find potential software solutions already in the market.
Don’t get discouraged if there’s a software for every problem you find, there’s a good chance that you can develop a better or less expensive version, or add features that one of them is missing.
The fact that the people you’ve spoken to haven’t solved this problem and aren’t using the apparently existing solution means they don’t know it exists or haven’t purchased it for one reason or another.
Now is where you brainstorm and have fun with asking yourself the question, “What if…”
NOTE: This part of analyzing the answers MAY turn out to be easy, fun and instantly rewarding. It may not.
But you’re an entrepreneur, a Founder. You thrive on challenges and ignore easy, because you know that those who are willing to do what others won’t, will get what others can’t.
But I want to leave you with a bonus method of idea discovery that actually IS easy, fun and potentially lucrative.
This idea was given to me by Dan Martell, a very successful serial SAAS entrepreneur who has built and exited multiple companies for undisclosed millions, most recently Clarity.fm.
I interviewed Dan on my podcast, Bacon Wrapped Business here where he revealed a cool SHORTCUT to idea generation.
Dan suggested going searching Twitter for the following phrase, in quotes, “is there an app for” or “I wish there was an app” or any other variations of this.
This will tap into very real conversations in social media of people specifically looking for software and app solutions to their problems.
You may have to dig a bit here too, and do this search once a day, but maybe you’ll find your next BIG IDEA!