Techniques for Generating ideas

In general, entrepreneurs identify more ideas than opportunities because many ideas are typically generated to find the best way to capitalize on an opportunity.28 Several techniques can be used to stimulate and facilitate the generation of new ideas for products, services, and businesses. Let’s take a look at some of them.

1. Brainstorming

A common way to generate new business ideas is through brainstorming. In general, brainstorming is simply the process of generating several ideas about a specific topic. The approaches range from a person sitting down with a yellow legal pad and jotting down interesting business ideas to formal “brainstorming sessions” led by moderators that involve a group of people.

In a formal brainstorming session, the leader of the group asks the par- ticipants to share their ideas. One person shares an idea, another person reacts to it, another person reacts to the reaction, and so on. A flip chart or an electronic whiteboard is typically used to record all the ideas. A produc- tive session is freewheeling and lively. The session is not used for analysis or decision making—the ideas generated during a brainstorming session need to be filtered and analyzed, but this is done later. We show the four strict rules for conducting a formal brainstorming session in Table 2.4. As you’ll see, the number one rule for a brainstorming session is that no criticism is allowed, including chuckles, raised eyebrows, or facial expressions that express skepti- cism or doubt. Criticism stymies creativity and inhibits the free flow of ideas.

Brainstorming sessions dedicated to generating new business ideas are of- ten less formal. For example, while creating Proactiv, a popular acne treatment product, Dr. Katie Rodan, one of the company’s founders, hosted dinner parties at her house and conducted brainstorming sessions with guests. The guests included business executives, market researchers, marketing consultants, an FDA regulatory attorney, and others. Rodan credits this group with helping her and her co-founder brainstorm a number of ideas that helped shape Proactiv and move the process of starting the company forward.29 Similarly, Sharelle Klaus-the founder of Dry Soda, a company that makes an all-natural soda that’s paired with food the way wine is in upscale restaurants-tested her idea by first talking to her husband’s colleagues, who were in the food industry, and then tapped into the professional network of a friend who owned a bottled water company. Through the process, she met a chemist, who was instrumental in helping her develop the initial recipes for her beverage. Klaus also went directly to restaurant owners and chefs to ask them to sample early versions of her product.30 While this approach only loosely fits the definition of brainstorming, the spirit is the same. Klaus was bouncing ideas and early prototypes of her product off others to get their reactions and generate additional ideas.

An individual’s imagination is the only limiting factor to brainstorming. Asking students to complete a bug report is a popular technique that is used in classrooms to teach brainstorming. To compile a bug report, students are instructed to list 50 to 75 conditions or “things” that “bug” them in their ev- eryday lives. Asking students to identify a number of conditions or things that bug them reduces the likelihood that they will specify only obvious things that bug them (e.g., campus parking, dorm food, and untidy roommates). Students can also be encouraged to hold focus groups with friends to brainstorm condi- tions that can be included on their “bug” list.

2. Focus groups

A focus group is a gathering of 5 to 10 people who are selected because of their relationship to the issue being discussed. Focus groups are used for a variety of purposes, including the generation of new business ideas.

Focus groups typically involve a group of people who are familiar with a topic, are brought together to respond to questions, and shed light on an issue through the give-and-take nature of a group discussion. Focus groups usually work best as a follow-up to brainstorming, when the general idea for a busi- ness has been formulated—such as casual electronic games for adults—but further refinement of the idea is needed. Usually, focus groups are conducted by trained moderators. The moderator’s primary goals are to keep the group “focused” and to generate lively discussion. Much of the effectiveness of a focus group session depends on the moderator’s ability to ask questions and keep the discussion on track. For example, a retail establishment in which coffee is sold, such as Starbucks, might conduct a focus group consisting of 7 to 10 frequent customers and ask the group, “What is it that you don’t like about our coffee shop?” A customer may say, “You sell 1-pound bags of your specialty ground coffees for people to brew at home. That’s okay, but I often run out of the coffee in just a few days. Sometimes it’s a week before I get back to the shop to buy another bag. If you sold 3-pound or 5-pound bags, I’d actu- ally use more coffee because I wouldn’t run out so often. I guess I could buy two or three 1-pound bags at the same time, but that gets a little pricey. I’d buy a 3- or 5-pound bag, however, if you’d discount your price a little for larger quantities.” The moderator may then ask the group, “How many people here would buy 3-pound or 5-pound bags of our coffee if they were available?” If five hands shoot up, the coffee shop may have just uncovered an idea for a new product line.

A relatively new service called Napkin Labs helps companies funnel follow- ers from Facebook and other sites into more intimate, more structured online communities intended to serve as focus groups. For example, Modify, the sub- ject of Case 3.1, is a company that creates custom watches. The watches have interchangable faces, straps, and sliders and come in two sizes. Modify uses Napkin Labs to get people to chime in on what new colors and designs they’d like to see, and where they’d like to see the watches sold. Each lab poses a challenge, such as “where should our watches be sold?” A dialogue is created among the participants. Each participant knows what the other ones are say- ing and can react to their comments. According to Aaron Schwartz, Modify’s founder, one lab showed a surprisingly big interest in seeing his company’s watches sold in surf shops. Other online companies, such as UserVoice and Get Satisfaction, help firms connect with their users in a similar manner.31

3. Library and internet research

A third approach to generating new business ideas is to conduct library and Internet research. A natural tendency is to think that an idea should be chosen, and the process of researching the idea should then begin. This approach is too linear. Often, the best ideas emerge when the general notion of an idea—like creating casual electronic games for adults—is merged with extensive library and Internet research, which might provide insights into the best type of casual games to create.

Libraries are often an underutilized source of information for generat- ing business ideas. The best approach to utilizing a library is to discuss your general area of interest with a reference librarian, who can point out useful resources, such as industry-specific magazines, trade journals, and industry reports. Simply browsing through several issues of a trade journal on a topic can spark new ideas. Very powerful search engines and databases are also available through university and large public libraries, which would cost hun- dreds or thousands of dollars to access on your own. An example is IBISWorld (, a company that publishes market research on all major industries and subcategories within industries.

Internet research is also important. If you are starting from scratch, simply typing “new business ideas” into Google or Bing will produce links to newspa- per and magazine articles about the “hottest” and “latest” new business ideas. Although these types of articles are general in nature, they represent a start- ing point if you’re trying to generate new business ideas from scratch. If you have a specific idea in mind, a useful technique is to set up a Google “email alert” using keywords that pertain to your topic of interest. Google email alerts are email updates of the latest Google results including press releases, news articles, and blog posts based on your topic. This technique, which is available for free, will feed you a daily stream of news articles and blog postings about specific topics. Another approach is to follow business leaders and experts in the industries you’re interested in on Twitter. The best way to locate people on Twitter you might be interested in following is by typing into the search bar relevant keywords preceded by the “#” sign. For example, if you’re interested in solar power, type “#solarpower” into the search bar. All the results will be people or companies who tweet about solar power topics.

Once an entrepreneur has an idea, it often needs to be shaped and fine- tuned. One way to do this—in conjunction with the suggestions made previ- ously—is to enlist a mentor to help. An explanation of how to use a mentor in this regard, and where mentors can be found, is described in the “Partnering for Success” feature.

4. Other techniques

Firms use a variety of other techniques to generate ideas. Some companies set up customer advisory boards that meet regularly to discuss needs, wants, and problems that may lead to new ideas. Other companies conduct varying forms of anthropological research, such as day-in-the-life research. Intuit, the maker of Quicken, Quickbooks, and TurboTax, practices day-in-the life re- search. The company routinely sends teams of testers to the homes and busi- nesses of its users to see how its products are working and to seek insights for new product ideas.

Source: Barringer Bruce R, Ireland R Duane (2015), Entrepreneurship: successfully launching new ventures, Pearson; 5th edition.

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