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Thursday January 24th 2019

How to get good ideas for startups

How to get good ideas for startups – Penelope Trunk’s Brazen Careerist

The majority of people in the US would like to be self-employed, according to Dartmouth economist, David Blanchflower. This makes sense because people who work for themselves are happier than people who work at someone else’s company, according toresearch from Estaban Calvo at he Harvard School of Public Health. However the majority are not self-employed, and one of the most important reasons for this is that people do not know how to come up with an idea for a business.

1. Read all the time, among broad sources and materials.
In a study spanning sixty years of economically underprivileged Harvard graduates, psychiatrist George Valliant concluded (in a great article in the Atlantic) that the only consistent indicator of who will be happy later in life is who did chores as a child.

This information should make almost everyone happy, since obviously just graduating from Harvard isn’t enough to guarantee happiness. It also gave me a burst of hope for our new life on the farm. The type of farm we live on has big cash flow and little incomes. I’m not sure if this qualifies us for the Harvard study demographic, but just in case, my kids do a lot of chores. They take care of farm animals and get rewarded with computer time. Not quite American Gothic. But still, maybe a path to happiness.

2. Ask a lot of questions about a lot of businesses.
You know you’re an entrepreneur if you can’t stop thinking of business ideas. I started thinking of farm business ideas from the day I discovered the farm. I asked about margins on pigs, cost of goods for eggs, cash flow during a bad harvest. At first the farmer was jarred by my distinctly non-girlfriend date-chat. But once he realized I was thinking of business ideas, he said to me: “I will never go into business with you. Ever. You would be a pain, and I’m already doing enough with you now.”

That’s when we were only seeing each other once a week so you can imagine how much he doesn’t want to go into business with me now that I’m living with him.

Still, I run all my ideas by him, which is another sign of a good entrepreneur. You can’t tell if you have a good idea until you tell people. Let others poke holes in your ideas. All ideas have holes in them. The trick with starting a business is telling enough people the idea so you have gain enough knowledge about the holes in the idea so you can see if these are the types of holes you want to figure out how to plug.

3. Identify an emotional need in the marketplace.
So I told the farmer that I’m thinking of starting a business for kids to learn how to farm. “Chores for the summer, happiness for a lifetime!” That’s my pitch. I tell him it leverages my marketing strengths because I will play to the parents being sick of parenting: They know they should make their kids do chores, but they don’t want to fight about it. I take the fight out of chores.

The farmer says that while marketing is my strength, spending day after day with twenty kids (the number I’d need for profitability) is probably not a strength.

4. No idea is precious. If it’s bad, just move to the next one.
So I keep thinking. Then I meet a guy who wants to invest in a company where I sell cheese online. There are lots of small town cheese makers who don’t market nationally. I’m thinking about that. The farmer likes that idea more than the chores one because he doesn’t know about cheese so I don’t bug him about it. He also likes the cheese model because he sees how Brazen Careerist takes investor money and spends it without making the money back. “We’ll exit on traffic,” I tell him. And he gets scared that he’s living with a member of a financial cult.

Another idea I had is to buy a herd of Waygu cattle. The farmer laughs when I tell him, and he says. “You’re going to be a rancher?”

“No,” I say. “It’s marketing. I think there’s a consumer market for Kobi beef that’s not being addressed.  And an investor will buy a herd for me to get started.”

“But you know sales and marketing. You don’t know cattle. How will you run the company?

I say, “I have a core competency in hooking up with good cattle farmers.”

5. Surround yourself with curious, engaged people
Then the investor sends me an article about Chianina cattle and writes that maybe we should buy these instead.

I send the article to the farmer for a second opinion. Saras Sarasavthy LH says that the key to being a good entrepreneur is not a certain skill set, but the ability to get people to fill in where your skills are weak. Which gives me the temerity to bug the farmer: “Did you read the article?”

“Oh. Yeah. Did you see the pictures? Look at the Angus. The best cuts of meat are at the back, and the Angus has much more meat on them than the Chianina.

I look.

6. Mix and match ideas – two old ideas together equal a new idea.
I say, “But the Chianina has more meat in the front. The brisket part, All the cheap meat the Jews eat from years of living in shtetle poverty is bountiful on the Chianina. The Chianina is the cow for the Jews!”

“No, it’s not like that,” he says. “You need fat and marbling to make good meat and the Angus brisket has that.”

“Look,” I say, “If I show these pictures on my website and say I have the best brisket, it makes intuitive sense.”

The farmer shakes his head and laughs. Then he says this type of cattle is really hard to manage. The farmer has bred his herd of Angus cattle to be very calm and easy-going. He says that’s important so he can handle them well. When he says this it always scares me: I hope he’s bored with calm breeding and that’s why he picked me.

7. Stay on the right side of honest, but recognize that there’s big money on the very edge.
The farmer says that in cattle shows (or whatever they’re called – I forget), the farmers often drug their Chianina so they don’t get too wild in the ring.

“How can people tell?” I ask.

“They can’t really. But sometimes one is drugged too much and he lies down in the ring.”

“Is that bad?”

“Yes. Of course it’s bad. People don’t want drugs in their meat.”

“Wait. I have an idea. You could do custom meat. Like, if someone wants Xanax, you give the Chianina xanax. Or Valium. We could take special orders. Then we have a calm herd with premium brisket and a market niche that caters to the Jewish fascination with psychiatry.

The farmer says nothing. He is fascinated by the Jewish penchant to do commentary on the Jews. That was what he noticed most at his first Jewish Holiday, Rosh Hashanah. The Jews at the table make Jewish jokes and talk about the politics of Israel like American talk about the politics of abortion: Everyone disagrees with everyone.

It’s the disagreement that fascinates me, though. Paul Graham, founder of the venture firm, Y Combinator, says there are no amazing ideas, there is only amazing commitment to exploring ideas. I agree. So I don’t care if my business ideas are good or not, because entrepreneurship is taking joy in the process of the banter of ideas until you land on a business model.

And I think the farmer likes that, too. I was throwing out some Percocet and he smiled and said, “Hey, wait. Maybe we should give that to the chickens.”

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One Response to “How to get good ideas for startups”

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