
Making a business out of them is the hard part.
The biggest mistake new entrepreneurs make is treating their ideas carefully. I was guilty of this. I wrapped them up in bubble wrap, hid them from the world and then slowly and quietly started working on them on my own.
Luckily for me, I learned thatâs a terrible way to deal with business ideas early on.
From about the age of 10, I was determined to start a business. I was the first kid to set up shop on the side of the road and spend the day throwing stones at a target, waiting for the neighborhood moms to stop by and buy whatever I was offering that summer.
Year after year Iâd pedal off different things: fruit, toys, cards â anything. I came to realize how hard it was trying to get new customers. The hit rate of a car that drove past and stopped was really low. So I figured it would be easier to sell to fewer people and have them buy from me more than once than constantly trying to sell to everyone â like a grocery store does.
So one day, when a mom from my school who had bought from me before stopped to grab a bag of my avocadoâs â the flavor of that summer â I asked her: âI hate sitting out here all day wasting time. What could I sell you most days that youâd need?â Her reply was simple, âWell I buy bread and milk almost every day.â
So thatâs what I did. For the next few weeks, Iâd go buy bread and milk and deliver it around our neighborhood on my bike. I started with one paying customer, and soon grew as I got hold of my momâs phone book (remember those?) and SMSâd everyone on it in our area.
I learned a super valuable lesson from that: Market research. If I wasnât a chubby little boy sitting on the side of the road, Iâd likely never have sold any plums, birthday cards or toy push cars. The only thing on my side was the âlook how cute and entrepreneurial he isâ factor. But by asking someone what they wanted, I was doing a form of market research. And from that, I was able to do less work, sell more, make more money, and spend more time playing with my friends.
My dad helped me synthesize my experience into one of the most valuable lessons of entrepreneurship I learned. I remember him saying so clearly, âYou canât sell something that people donât want. Ask people what they want, then be the best at selling it to them.â
Iâve kept that as a guiding ânorth starâ for any new business I want to start. I never spend a single cent or second on a new business without first validating the idea thoroughly.
This is the process Iâve learned and developed over the years. It takes you through the entire pre-launch process, step by step.

1: A Why
Hereâs the difficult truth: Starting a business is hard.
If it were easy, everyone would be entrepreneurs who own their own businesses. If you can overcome the hurdles along the way, the reward of owning and building your own business is well worth it.
However, you need something to lean on when times do get hard. You need a why. Why am I doing this? Why should I keep going?
Task
Write a description of your life as you imagine it in 5 years after youâve started your own successful business.
What does your day to day look like?
How much financial freedom do you have?
What are your stress levels like?
How much time do you get to spend with your family?
Include everything that is important to you. Include pictures, emotions and vivid descriptions. The more life-like the better.
Thatâs your âwhyâ. Thatâs what youâre going to refer to every single time things start getting tough.

2: A Problem
The most common mistake most first-time entrepreneurs make: Starting with a solution. That little boy on the side of the road selling sour plums started with a solution.
Every good business is built off the back of a problem that people need to solve, and will pay money to do that.
The customer might not know that problem exists yet (think of when Facebook was founded, no one knew they needed it), but every good business solves a problem.
Task
What problem are you solving? Write it down.

3: A Solution
Youâve got your problem, now you need a way to solve it.
The strength of your solution is going to be a big determining factor in how successful your business is.
When you think youâve found a good solution to the problem, consider these:
- Do you have the skills/know-how/drive to make that solution come to life?
- Does your solution suit you as a person?
- Does your solution suit your desired lifestyle? (Think about step 1)
Task
If youâve answered those three questions and youâre still positive about how youâre going to solve your problem, youâve found âproduct-founder fitâ.
If you are unsure about one of the three answers, start brainstorming. How can you solve the problem (step 2) in such a way that after these three questions youâll still be excited about the project.

4: A Customer
Now you need to find out if someone is going to buy your solution to their problem.
A lot of first-time entrepreneurs could save themselves a lot of wasted time, effort and money down the line by doing this thoroughly. But they donât.
The reason is, thereâs a stigma attached to business ideas. Most people think you should hold them sacred and wrap them in bubble wrap until itâs time to make money.
Thatâs absolutely the worst way to handle a business idea.
Before you make a business out of a potential solution, you need to thoroughly test it. Put it through its paces. Pick it apart from every angle possible. If it stands up to that â itâs a good one. If it doesnât â great. Youâve saved yourself a lot of time and money and you can free up some mental bandwidth for finding the next problem that needs to be solved.
Task
Go to where your customers are and ask. You can do this in so many ways, among these:
- Cold email,
- Quora,
- Reddit,
- Phone call,
- In-person (conferences, meetups, etc.).
Youâd be surprised at how forthcoming people are with advice/input when you ask them for it.
Hereâs a great cold email example for a B2B Saas product:
Hi [First name]
Sorry for the out of the blue email.
I know youâre busy, so Iâll cut straight to it: I need your input on something important. Itâll take less than a minute of your time.
Business owners like you have to deal with [problem youâre solving] a lot. Iâm building software that helps you solve that by doing, [x], [y] and [z].
Would you pay for something like that?
Thanks for your help here â I really appreciate it.
â [Your Name]
PS: If youâve got any input on how I can make this a better solution for you, please do let me know.

5: Customer Profile
Weâve dealt with the what, the how â now itâs time for the who. As in, who is going to buy your product.
The biggest mistake people make is not clearly defining their target audience. Remember, youâre solving a specific problem for a specific person. You canât sell that problem to everyone.
Targeting a very specific customer is going to be helpful. It will help you target your marketing message, build your brand, and find product-market fit as soon as possible.
Task
The best way to make sure your company is aligned with who they are targeting is to create a very specific customer profile. This is a very in-depth description of who your customer is, what they do, what their habits and interests are, and how they interact within your market.
When I create customer profiles, I like to think of them based on how you can target your customers using metrics and search intents on the internet, along with a few other data points.
Hereâs an example:
Demographics
- Male
- Mid 30's
- Married, 2 young kids
- College Degree
- Lives in San Francisco
- Earns $5 000+ monthly
- Works at a VC fund as a medium-level analyst
Buying Habits
- Compares options before buying
- Doesnât like to waste, so buys food more frequently, in smaller quantities
- Shops online for convenience
- Price conscious, but would prefer to spend more on a quality product
- Prefer to pay a bit more to support local businesses
Psychographics (yes, thatâs a word)
- Outdoors person
- Likes having his own time
- Driven, intrinsically motivated
- Values financial freedom â has a rainy day fund
- Values time with family

6: Customer Analysis
You know who your customer is. Now, itâs time to check that youâve got product-customer fit.
Itâs all good and well having a great product, but if youâre trying to sell it to the wrong people, youâre not going to make any progress.
Task
Answer these questions, sequentially:
- How many customers are there, like the one youâve described above?
I like to use search metrics to quantify this.
If youâre selling an anti-anxiety blanket, youâll get a pretty good sense of the demand for that product by looking at the search volume for keywords like âanti-anxiety blanket buyâ or âbest anti-anxiety blanketsâ or âbest blankets for anxietyâ.
If you use a tool like Google Ads, they have a Keyword Planner which will also suggest keywords that are similar. Build a list of keywords and then check for the search volume.
Depending on what youâre selling, anything above a few thousand hits per month on very intent-specific keywords is a good signal to continue. - Can your customer use the solution?
Itâs all very well making anti-anxiety blankets, but if you live in the worldâs hottest country in the tropics, youâre probably better off finding a better solution for treating anxiety. - Where can you find/reach those customers easily?
Think of both digital and in real life.

7: Problem-Solution Fit
Problem-solution fit is basically answering the question of: âDoes my solution actually solve the problem that I built it off of?â
It sounds fairly self-explanatory. But a lot of founders can get this wrong. They build something which they think solves the problem perfectly, but for a variety of potential reasons, actually fails.
Youâre finding a solution for the people who have the problem â not for you.
The main question you need to ask yourself here is: Who is this for?
If youâve properly defined your customer above, then this step is a lot easier. If youâre trying to be everything to everyone, this becomes difficult.
Task
Find 10 customers from every corner of the niche youâre targeting. Engage with them and validate that they do have the problem youâre setting out to solve:
âDo you battle with creating profitable Facebook ads?â
If yes, continue.
If no, disregard and find someone else who is in your target market.
âIâve built a solution to that problem. It helps you create profitable ads by doing x, y and z. I have two questions for you:
1. Does that solution help solve your problem?
2. Would you use that solution?â
And thatâs it. Take that feedback and tinker with your solution until youâve got a fit. Youâve got to get your hands dirty here. But it will be worth it down the line.

8: Industry Analysis
Thatâs most of the hard work done.
Now you need to know what arena youâre stepping into. What does the industry youâre jumping into look like? Where are the companies that are succeeding (and more importantly), where are the companies that are failing?
Be prepared for this to take you a solid day of reading and researching. Itâll be worth it. Youâll learn from other companiesâ mistakes so you donât make them yourself, and capitalize on other companiesâ successes without having had to have find your way there.
Hereâs a good way to get started:
Task
Ask yourself this: If I were one of my potential customers, how would I find the service/product Iâm providing?
Would you Google it? Ask on a forum?
Do that. And find the 5 (or more, if you want to be more thorough) competitors in the space youâre entering. For each company ask the following questions:
- âWhat are they doing well (positives)?
- What are they doing poorly (Negatives)?
- What is their product?
- Where is their market (place)?
- How do they get their product to that market (Distribution)?
- How do they advertise their product (Marketing channels)?
- What can you learn from them?
- What should you not copy from them?
Hereâs a template:

If you come out of this step still optimistic that youâre entering a space that you can compete in, and your value proposition is unique from any otherâs out there â then carry on to the next step.
If you feel a bit disheartened by this and realized that there are other much bigger companies solving the problem you are, you have three options:
- Ask yourself how you can service the niche better. What could differentiate you from those big businesses?
- Niche-down even further. Go into a sub-sector of the audience that the big company is targeting and build a solution specifically for them. Once you have a foothold, you can then expand.
- Move on. Thereâs no shame in it. Youâll be on to your next idea in no time at all.

9: Startup Capital
One of the most daunting things that face most entrepreneurs: Where do I get the capital to start?
If you donât have any savings or an additional income that can get your business started, it can be a major hurdle.
This is why Iâm a big fan of internet (specifically information) businesses. They require almost no capital to get started (You can literally do it for <$100) and the only investment you have to make is time.
And because theyâre cash generators, theyâre very easy to bootstrap with literally no capital investment.
If you are looking to start a business which does require startup capital, hereâs what Iâd consider doing:
Crowdfunding
A successful crowdfunding campaign does three things:
- Leverages the distribution of an already-established âeCommerceâ site to get your product in front of lots of faces;
- Gives you valuable feedback on your product and what resonates with your audience, before youâve spent anything on production;
- Gives you some money to get a product out the door, and your business off itâs training wheels.
Starting a cash-generating side business
As mentioned above â an information business is a great cash-generator that can be started with less than $100 in the bank account.
The internet makes these opportunities available!
Saving
Itâs hard, itâs not sexy, and it can be painful. If you want it enough, youâll do it. Remember â this is money you should be comfortable saying goodbye to.
Services business
Theyâre not idealic, but they work. And if you do them right, they can generate a nice income which can get you started on your journey.
The pro (and con) of a service business is that all you need is your time. If other people value your time, you can charge them for it. This is a great way to build up a bit of rapport with your audience, as well as generate cash you can save.
Preferably, choose something related to the business youâre going to start.
Angel investors
This would be my last resort, simply because it requires a large amount of effort and very seldom garners any results.
Most angel investors are looking for extremely high growth-potential businesses that are going to be the next Airbnb. 10X return on an angel investment is not considered remarkable.
To get an angel investor on board you are going to have to likely have some sort of proof of concept, or a track record. Youâll have to put together a pitch deck, show that the idea you have has gained traction already and is poised for massive growth.
If you feel you can do all of that, angel investment might be a good way to get your business started.
Also remember that when youâre taking on external investment that early, you are diluting your company at a very low valuation. Because the investment is super risky for the investor, they take a very large stake in your business for not a lot of money. If you are going to go on to build a very large business, itâs likely youâll regret having given up that amount of it so early on.
You can check out https://angel.co for more info on angel investment.

10: Personal Trait Analysis
Because youâre likely going to be going on this journey by yourself, you need to understand what youâre going to be up against.
By doing a strength and weaknesses audit on yourself before your start, youâll know what youâre going to:
a) Be good at (and therefore want to do), and
b) Be poor at (and therefore shy away from).
As an example, Iâm excellent with product. Iâm technical, creative and thorough. But Iâm terrible at selling. I donât like it, Iâm not good at it and because of that â I donât do nearly enough of it.
Thatâs what this is going to show you. Itâs going to help you realize when youâre plodding along ticking off boxes that give you the impression that youâre making progress, but in actual fact, youâre just doing the things you like doing, in lieu of making real progress towards your goals.
Task
Do an audit of your strengths and weaknesses. List them, and their associated category (People, product or innovation). Those are three guidelines based on three areas of building a business â you might want to add more.
Be brutally honest with yourself. Itâs going to guide you in where you need to spend time, and spend less time.
Download the template here.

So, if youâve ticked the ten boxes above, youâve got a business idea thatâs based on a validated problem people have, with a solution that people are willing to pay for, and enough people to sell it to.
Youâve got an idea that is worth turning into a business.

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Interested in becoming your own boss?
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