How to find your next big idea and make it happen, from a CEO who's done it
Courtesy of Travis Schneider
- Travis Schneider oversees all aspects of strategy, sales, and business development at PatientPop. Before cofounding the company, Travis cofounded and served as the CEO of ShopNation. He also cofounded and served as the CEO of StarBrand Media.
- When it comes to creating a thriving business, he says that potential founders should work backwards and find big problems in big industries. Then, talk to people who would be customers and see what they think.
- Build the earliest version of your solution and test it with customers. And validate how much people will pay.
- When it comes to investors, "go big and go fast," he says. Be strategic about who you approach.
- Visit Business Insider's homepage for more stories.
How do you find a big idea that can translate into a thriving business? By implementing a process where creativity meets validity: A step-by-step approach to identify a solution, and then proving that it's a success story in the making.
Here's the process my business partner, Luke Kervin, and I used to most recently found PatientPop, a healthcare tech company helping providers do better business.
Work backward: Identify the (big) problem first
An idea becomes a business only when someone is willing to pay for it. (Preferably, a lot of someones.) Your first step to getting there requires working backward: Find a legitimate problem that already exists in a large industry or category.
What's a legitimate problem? One that causes pain or chaos - perhaps a pressing issue that results in a loss of revenue. It has to be something that people really feel, either emotionally or financially. Minor annoyances aren't good enough - few businesses will part with money to address an inconvenience.
It's impossible to build a billion-dollar business in a million-dollar market, so identify a big problem in a big industry. When you go where there's potential to help many, people will go along with you - especially investors.
Validate demand with future customers
Once you've found an addressable problem, have a target market that both sees and experiences this problem and is willing to pay to solve it.
Get out there and talk to potential customers. Simple, friendly conversation is one of the easiest, cheapest ways to understand the business viability of your idea. Ask: Do you have this problem? What impact does it have on your day, year, or bottom line?
Then, explain your solution and get immediate, honest feedback. See if your future customers think your idea will help solve their problem. Find out how they address the issue today. Their response will reveal your future competition.
Validate your solution with an MVP
Next, create and test your solution with potential customers. You'll likely need to reach out to your network or spend a little money to build a minimum viable product - the earliest version of your solution - to give people something tangible to try. If your MVP investment seems expensive, compare it to the costs of jumping into a business prematurely and failing.
When you test your solution with future customers, also validate the sellability of the solution. With PatientPop, Luke and I quickly created business cards and a few pieces of sales collateral and acted as sales reps out in the market to see if we could generate buying interest. This was enormously insightful, as it helped us test overall market demand, sellability, and even pricing.
Validate your sales model and pricing
During the company's earliest stages, it was fine for Luke and me to act as CEOs and salespeople. But to truly prove a sales model, you have to hand the reins to an actual sales rep. In fact, two sales reps if you want to do it right.
Rely only on one and you'll never know if a lack of customer interest is due to your product or your rep. When we started PatientPop, our first rep couldn't close any business. But the second rep crushed expectations, confirming the need for the solution and validating the sales model could scale with a team. He also became one of the most successful sales executives in the company's history.
If we had based our assessment on one salesperson's performance, we might have thought the solution wasn't resonating. And we'd have been wrong. The market was clearly there, and we moved forward with pricing.
The key to pricing: Don't sell yourself short. There's a conventional line of thought that a new service needs to sell for the same as - or less than - the competition. That's not true. We came out of the gate selling at a higher price than others and quickly gained a reputation as a company with a premium solution. In turn, we could invest more in product development and keep delivering premium value.
Fund your big idea
As you seek out investors, go as big as your idea. Don't play a small game, or spend much time optimizing ways to best minimize dilution. Just go big and go fast.
Focus on strategic investors - they often see your value faster than most and can bring you worth well beyond dollars. Our first company, an entertainment-focused venture called StarBrand Media, took off once Warner Bros. invested in the business. The key partnerships they brought proved critical to our success.
Similarly, with PatientPop, we raised a seed round of investment capital from an established healthcare tech company, athenahealth. The partnership gave us immediate industry credibility and access to talented people interested in helping us develop and grow.
As you undertake each of these steps, remember the one element that runs through them all: honesty. Don't wear rose-colored glasses or you're likely to overlook problems and spend a lot of time and money doing so. Be honest about your results and whether there's any "there" there. When you can prove your ability to address a considerable business problem, you've found the elusive next big idea.
- A Google employee of 11 years says he and his wife stared at each other in 'disbelief' when they realized they'd both been laid off by the company
- Mark Zuckerberg reportedly said he doesn't like seeing 'managers managing managers,' fueling speculation of more layoffs
- The future of banking is entirely digital
- Study find out the potential cause of dementia
- Odisha Health Minister shot at by police officer
- Rajinikanth issues public notice on infringement of rights, warns legal action
- Govt likely to float global tender for HPV vaccine in April; Merck, Serum Institute may participate
- Finance Ministry to stick to privatisation of already announced CPSEs next fiscal