The Next Great Business Idea: Six Questions for Founders to Ask Themselves

Branching out on your own, founding a business, and earning money with your own startup company – this is perhaps the greatest freedom of all that our economic system offers. It’s a system that basically consists of nothing more than the interplay of two forces: supply and demand, or in other words, enterprises and clientele.

One well-known economic concept states that every new supply of a product or service creates its own demand. Smartphones are a good example of this because no one had ever asked for them, but today nobody can do without one. But how do you come up with a new product or service to supply, and how do you get step by step to a good business idea and your own company?

A startup creates its own demand only when a new business idea satisfies one or multiple consumer needs or does that significantly better than existing suppliers can. This means that whoever wishes to found his or her own company should first develop a proprietary business idea and think about how he or she can create a product or service offering that wins over and lastingly retains customers. Whoever would like to found an enterprise but hasn’t yet identified a good business idea for it can also go at it systematically. One good tip is to ask yourself a series of questions:

The journey to the liberty of self-employment starts with your own skills because they very often can lead you to new business ideas. It’s very simply about recognizing what you’re good at and knowing what you would like to do, where your creative talents lie, or what you are particularly knowledgeable about because those are the things that you can probably do better than others. Many good ideas lie dormant in your own capabilities. But a decisive inspiration for a business idea can also come from anything that repeatedly irritates you and other consumers in everyday life. This brings us to the second question.

It’s hard to imagine office life without yellow Post-it Notes. Arthur Fry, an American scientist, got the business idea for Post-it Notes when, singing in his church choir on Sundays, he noticed to his aggravation that every time he opened his hymnal his bookmarks fluttered to the floor. That reminded him of a new adhesive that a colleague of his had invented but for which a suitable business idea had not yet been devised by the company they worked for. From that moment on, it didn’t take long until the world’s first self-adhesive yellow sticky notes came onto the market in 1980. Although the management of 3M, the company for which Arthur Fry developed the product, initially wasn’t enamored with the idea, Post-it Notes eventually became a blockbuster. This example illustrates that a successful business idea needn’t always be particularly complex, but can instead be one that simply solves an annoyance for as many people as possible.

Another approach can be to think about what will be of concern to society tomorrow. What will life be like a decade from now? What is important to people? On the basis of these and similar questions, you can conjecture where existing and future demand on the part of consumers is headed, where startup companies will arise, and what products and services they may offer. Sustainability, environmental protection, and the demographic projection that more and more people will live increasingly longer lives are major themes at the moment. They have a massive impact on our society, especially on the health and care system, but also on traffic and transportation as well as on building practices.

You don’t necessarily have to have a completely new business or a totally crazy startup idea to break into the market. The business idea for your own company can even be based on an age-old handicraft that you can adapt to address newly emerging demand. Let’s take hairstylist handwork as an example. Hairdressers have only just recently discovered the male (and whiskery) part of the population. Fashion trends have prompted men to let their beards roam free again these days, and the zeitgeist has been stoking male vanity for some years now. In line with this, many male salons and barbershops are sprouting up at the moment, mainly in urban areas. Classic economics would say that startups here have further developed an established service and tweaked it for a new target clientele.

Many successful ideas from startup companies were triumphant precisely because they made an improvement on a product already in existence. In economics parlance, this means that the founder had a business idea on how to better satisfy a specific need. He or she perhaps even developed a new technology to do that, like James Dyson did, for example. The British engineer came up with the idea for his eponymous bagless vacuum cleaner and invented the “dual cyclone” technology that drives it. Legend has it that he was always annoyed that the suction power of conventional vacuum cleaners decreases as the dust bag fills. He spent more than 15 years tinkering with an alternative until, after having developed 5,127 prototypes, he finally brought the first model onto the market and opened his company in 1983. Today Dyson employs more than 12,000 workers and generates around 5 billion euros of annual sales revenue.

You can make improvements not only on products, but also on services. Successful ideas for startups can literally be lying in the street. If, in a university town, there are not yet any affordable cafés with WLAN and plug points close to campus, it might be an innovative idea to open one. Perhaps instead of billing for coffee consumption, it would charge by length of stay or by electricity usage. Here’s a tip: Sometimes such an innovative idea isn’t even necessary. Sometimes all it may take is simply more of the same. Open a child daycare center in a metropolitan neighborhood that many young families are moving to but which has only one such facility thus far. Or open an outpatient care service in another underserved location where many elderly people live. If the new daycare center features a yard unlike the other one, or if the outpatient care service operates with more efficient methods than the first one employs, all the better.

The better a good business idea satisfies demand, the greater the chances are that an aspiring founder of a new enterprise will be successful. That’s why the second big step on the way to becoming a self-employed entrepreneur is to precisely analyze the market, which entails asking more questions: How much competition does my business idea face? How can I operate more efficiently than the competition? How high is the demand, and how will it evolve in the years ahead? Is the business model in step with the zeitgeist and in line with consumers’ values? How much money are potential customers willing to pay for my innovative product or creative service? How much money would I like to earn with my business idea? The answers to those questions are crucial to devising the business model concept and calculating the potential revenue and profit.

The more that startups know about the target group for which they want to manufacture a product or offer a service, the more aptly they can develop the design, ad promotion, and pricing of a business idea and describe it in a business plan. Or as classic economics would put it, the better a supply of something satisfies demand, the more customers will make use of it.