Choosing The Right Startup Idea *For You*

Dan Khan
ZeroPoint Blog
Published in
7 min readOct 12, 2016

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Image credit: thenextweb.com

There are so many great startup ideas in the world. And many more great people with good ideas, but not all great ideas are equal for *you*.

Whilst we ran the startup accelerator here in New Zealand, we constantly ran into people with great ideas, and now with our new revenue-focussed incubator, ZeroPoint Ventures, we’re starting to see even more:

  • Automated and mobile farming tools to reduce the capital outlay for small farms;
  • Robots that work inside popular communications tools like Slack to automate the back office;
  • Mobile tools specifically designed to help better connections between doctors, patients, and others in that value chain.

All of these are great ideas in their respective fields (and luckily the founders are all well qualified to execute on them too).

But we’ve also seen many seemingly great ideas that failed too. Looking back over some of those failures, there’s a number of obvious things that stand out as contributing factors we can learn from.

Being Explicit During Startup Ideation

In my experience, most people don’t give enough depth of thought to the ‘idea’ part of building a company. Instead they grab onto what sounds like a good idea, then push themselves to build a product quickly, and getting it front of customers without really questioning the success factors at the idea stage.

I call this type of thinking implicit startup ideation — whereby founders come up with an idea without much thinking of how they’re going to execute on it at scale in the future (an almost, ‘build-it-and-they-will-come-mentality’).

Whilst implicit startup ideation may generate great ideas, many people don’t question whether it’s a great idea for you. What I mean by that is, what’s your personal capability to execute on that idea?

A Good Startup Idea *For You*

Why does that matter?

Well, have a think about some of those success factors for a moment.

  • How much do you know about the market?
  • What are the trends?
  • Is the market emerging, growing, or in decline?
  • How many other people are playing in that space?
  • What are some really big unsolved problems that others in that industry have been trying to solve unsuccessfully for a while?
  • Do you have some competitive insight that outsiders to the industry will take time to figure out?
  • How strong are your networks in that industry for partnerships or customer relationships?
  • How easily and quickly can you reach early customers in that market?

If I came to you tomorrow and said I’ve got the next greatest banking product, just sign up here with your email address and bank details — what are you likely to do…?

Tell me where to stick it I’d reckon! What’s my credibility in that space? Have I built and scaled companies in the banking industry before? Am I an expert in that field? Do I know the inherent problems in that field that are even going to lead me to build a startup in that space, let alone gain your trust by selling into that market?

Being explicit about your startup idea and your ability to execute on it requires a little more diligence, particularly at the idea stage when it’s easy to get wrapped up in a cool idea, build a product, then suddenly you’re a new startup in the world selling a product without much thought.

More often I see this lack of consideration come back to bite people when they leave an immature market with little competition (such as New Zealand), and then start competing in larger markets. In those markets with many more people and competing forces, the likelihood of someone dominating you who does have the requisite domain expertise, experience, and all the right networks, is much higher.

Think about it from a customers’ perspective — who are you going to choose: a new startup product spun out of a major bank by executives who bring trust, credibility, and proof points with them from years innovating inside the banking industry; or Dan’s newly stamped FinTech startup out that we hacked together over a weekend in New Zealand with no other credentials to back us up?

A Good Startup Idea *For Your Location*

Another facet to implicit startup ideation is neglecting your location in deciding which idea you should pursue. Today it’s easier than ever to build an online product that can engage users from all around the world, but should you do that from day one?

There’s a mantra bandied around in New Zealand that if you’re not building your startup to be ‘global from day one’, then you’re doing it wrong. But many people forget the environmental, social, and political factors of their location as important ingredients into their decision about which idea to pursue.

For example, I’ve seen so many ideas for social networks in my time here in New Zealand, that’s it’s not funny any more! Why do we think we can build social networks here in New Zealand? Where’s our skills base for those types of companies? Where’s our investors that understand social networks? Where are our partnership companies that can advise, mentor, and help us be successful?

Very few people understand how to build a social network at scale here so if you are looking to build a social network (and I don’t want to discourage you), you should really be at the epicenter of the world for social networking to maximise you chances of success, which in this case, would be Silicon Valley.

Same goes for other types of ventures — want to build something around online video? Your chances of success will be much higher if you moved to Los Angeles. A new type of advertising platform? Probably New York. Financial Tech venture — New York definitely, maybe pre-Brexit London. Software Infrastructure & Tools — maybe you should consider Australia; AgriTech or CleanTech — now you’re getting closer to home.

New Zealand’s Competitive Advantage

What we do have in New Zealand is a tightly connected web of small businesses that are incredibly easy to reach and connected by only 2-degrees.

We’re not yet ‘developed’ in our use of software compared to more mature tech ecosystems, and we’ve very few large enterprises here.

That’s why we think the opportunity for founders building companies in New Zealand is to be building high-margin recurring revenue software products focussed on making business to business interactions easy or helping people do their jobs more efficiently — especially if they fit over the domains we do have chops for here in NZ.

This type of company can easily find trial customers and make sales here, whilst using digital marketing to reach self-serve customers overseas, removing the barrier to our location for many types of low-touch sales funnels.

Experience Leads Execution Leads Ideation

This reminds me of one of my favourite short essays by (now New Zealander) Derek Sivers, founder of CDBaby from the early online days.

Derek reminded us that ideas are a multiplier of execution in that a bad idea poorly executed doesn’t go far, but even an okay idea executed well has legs. I also add a layer that says no matter how much execution you put into making an idea work, if you’re working on the wrong thing for you, your execution will ultimately suffer, whether that’s due your own inexperience, or in being out-executed by others.

Be Explicit About Which Startup Idea You Choose

I highly recommend anyone who’s looking to build a side-project that might turn into a startup venture one day, to not just come up with the first idea that enters their head, but to instead do some explicit startup ideation, putting in enough time before you fall in love with that idea by aligning it with your domain knowledge, industry expertise, and insights you have over that field, and ultimately choose a startup idea which you know is going to be a fit for your starting geographic location.

If you do this thinking up-front, you’ll make sure to choose the right startup idea for you, rather than a great startup idea for somebody else!

The early steps of the ZeroPoint online venture-building programme, focusses exactly on that — allowing you to find the right idea before you get stuck building something that isn’t going to give you that competitive edge into the future.

If you have an idea for a business, or want some help exploring that more, sign up for our online guided programme today — there’s no commitment in the early days and we provide a clear pathway from idea through to your first $1MM in revenue with coaching, up to $178K funding, and support throughout the journey.

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Experienced startup CTO/CPO based in New Zealand; Built startup community & accelerator space in NZ; Passionate about helping Kiwi founders go global from NZ.