• Idea generation methods
  • Brainstorming
  • Mind maps
  • 6_8_5
  • Painstorming
• Sources of ideas
• Turning idea into business opportunity
• Value proposition canvas

Innovation refers to the “development and implementation of new ideas by people who over time engage with others (Van de Ven, 1986).” Creativity is the key when creating new ideas and is the first step of an innovation process. Creativity refers to the development of ideas that are both novel and useful (Amabile, 1996; Baer, 2010). It can be an important source of competitive advantage. It is the ability to imagine potential future scenarios and helps you to connect different questions, problems with ideas. Creative people ask questions that challenge conventional wisdom and status quo. That is important in order to create something meaningful that makes sense. Moreover, creativity is not important only in the beginning of your business, but is the key for good decision making. If you are a creative person you are able to imagine novel solutions to day to day challenges of business life.

When you came up with a new idea, the next step is the implementation phase – converting those ideas into new and improved products, services, or ways of doing things (West, 2002). Process of innovation can be divided into two activities: the development of novel, useful ideas and their implementation. Innovation is a process of new idea creation or adoption and a subsequent effort to develop it into a new product, service, process or business model with an expected added value for a potential user. The definition of innovation describes creation of something new with added value for future customers. That is usually the path you want to follow. Creating something that doesn’t exist or is not used the way you intend in order to create value for your customers.

Brainstorming is a group activity focused on new idea generation. You appoint a facilitator that is leading the group and is capturing ideas on whiteboard in the room. In a predefined time, you try to generate as many ideas as possible. You don’t criticize ideas of others, on the contrary you try to develop ideas by positive feedback and follow-up ideas. With brainstorming you aim to build safe environment, where everyone feels like sharing his wild ideas and imaginations. If you are starting on your own and don’t have a team to help you create new ideas, you can simply brainstorm on your own. Just use a pen and paper (computer) to capture your ideas.

• Listen to ideas of others
• Defer judgement - don’t criticize
• Encourage wild ideas
• Build on ideas of others
• Go for quantity

Mind maps are popular tool for capturing thoughts, brainstorming, evaluating and planning execution. If you are on your own as a founder, mind map can be a good brainstorming method. You will need just a blank paper and pen. You start with the central concept in the middle of your paper, you write every idea that comes to your mind and try to connect it with the central concept. You group ideas based on their relation to the main topic and visually connect them with lines. If you want to generate new entrepreneurial ideas, you can start with the field you are interested in and write every business idea that comes to your mind, circle it and connect to the general topic. This tool is universal and can be used almost for everything. It helps you structure thoughts and establish relations among topics. As you move further in developing your ideas you can use the mind as well. For example, you write in the middle “Opening a restaurant in Prague” and you write everything that comes to your mind connected to the project – for example buy coffee machine, hire staff, select suppliers. You create structure by writing broader topics and brainstorming ideas in more detail and connecting them to the more general topic. Circle topics to make a visual distinction. The mind map helps you capture all ideas and visually showcases the thought process. This way you capture big picture of your project and the scope of activities that need to be done. If you are not a fan of paper and pen anymore, you will find variety of software that you can use to create mind maps. Just search for “mind mapping software” and you will find tools for all operating systems and some freeware versions.

For examples of Mind Maps see:

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This method was featured in the Game Storming book and you can read the original description here: http://www.gogamestorm.com/?p=688. 6_8_5 is credited to Todd Zaki Warfel, we made slight changes based on our experiences with the method.

We have many ideas every day. But successful business ideas are rarely born overnight. And for an idea to become a great idea, it takes considerable work and effort to develop it. Part of the reason we end up with under-developed ideas is that we stick with the first good idea we have — rather than taking the time to explore complementary approaches. 6-8-5 is designed to combat this pattern by forcing us to generate lots of ideas in a short period of time.

This activity is for 2 or more participants.

Duration
5 minutes for each round
15-20 minutes for discussion

Process
1. Before the meeting, prepare several sheets of paper with 2×3 grid. You want to create boxes big enough for participants to sketch their ideas in, but small enough to constrain them to one idea per box. Each participant will need one paper with boxes on both sides per round. You can also instruct the group on how to make their own 2×3 grid by drawing lines in their notebook.

2. Introduce the activity and remind players of the objective for the meeting. Tell players that the goal with 6-8-5 is to generate between 6-8 ideas (related to the meeting objective) in 5 minutes. Set a timer for 5 minutes.

3. Tell participants to sit silently and sketch out as many ideas as they can until the timer ends — with the goal of reaching 6-8 entrepreneurial ideas. The sketches can and should be very rough — nothing polished in this stage. They should draw one idea per box. The process should be: idea, rough sketch in a box, new idea, new box for a rough sketch.

4. When the time runs out, the participants should share their sketches with the rest of the group. The group can ask questions of each player, but this is not a time for a larger brainstorming session. Make sure every player presents his/her sketches.

6. With time permitting, repeat another few rounds of 6-8-5. Players can further develop ideas that were presented by the group as a whole or can sketch new ideas that emerged since the last round. But the 5-minute sketching sprint should always be done silently and independently.

6-8-5 is intended to help participants generate many ideas in succession, without worrying about the details or implementation of any particular idea. It’s designed to keep participants on task by limiting them to sketch in small boxes and work fast in a limited amount of time. 6-8-5 can be used on any product or concept that you want to brainstorm, and have the best results with a heterogeneous group (people from product, marketing, engineering, design…). 6-8-5 works great in the early stages of the ideation process.

We can use brainstorming to generate multitude of ideas, but we don’t have any certainty that they will be good basis for successful business. When brainstorming, you can lose connection to customers. They are the ones that will decide the fate of your ideas. When you have interesting ideas from a brainstorming session, but they lack perceived value by customers, your business will probably fail. One way to ensure success of your business is to bring real value to your customers – help them solve some problem or alleviate pain. Painstorming is a simple variation of brainstorming that can have huge results on future business opportunity. Instead of brainstorming solution – which is natural tendency, when thinking about starting a business – you take a step back and search for pains or opportunities on the market. This method was introduced by Johnathan Weaver, professor of mechanical engineering at the University of Detroit Mercy. “Engineers tend to be pretty good at solving problems, but not nearly as good at opportunity recognition and identifying problems that need to be solved in the first place.” Painstorming will help you generate problem statements based on actual customers’ pains and frustrations. Innovative products with market success can be traced back to the pain they address.

This is a slight modification to the original Painstorming by Johnathan Weaver.

As a warm up, try to think of innovative products and describe the problem or pain they address.

1. For a week listen and observe frustration in day to day task around you.
2. Write down potential opportunities where an innovative solution may generate value.
3. Also note sub-optimal ways in which people perform tasks without even noticing that the approach is sub-optimal. This may be because the task is performed in this way for years without the performers noticing there might be better ways due to new technology or change of process.
4. Write down all the problems, frustrations or sub-optimal performances based on the observed behavior.
5. Use these observations as a basis for solution brainstorming. These real life observations are great source of inspiration for your business ideas.

If you know the industry of your future business, focus your observations to the relevant environment. If you know you want to have your company in cycling, research frustration connected to cycling. You can spend some time observing bicycle line and surroundings. Make short videos of the recurrent situations. Share these videos with your team. They can identify frustrations or sub-optimal performances that you might have overlooked.

Often the founders do not systematically search for an idea. They are open to potential opportunities, but there is an element of luck involved. “Chance favors the prepared mind.” You need to be open to the possibility of starting your own business. Previous personal and professional experiences shape the types of opportunities we see. Our experiences, characteristics and values give us unique insights and shape the way we capture and interpret information from the outside world. But the idea is just the beginning. It takes substantial time and effort to develop the idea to a business model. You need to navigate different sources of information to make the right decisions about the future business. In today’s business environment it is important to be open-minded and be ready to learn from feedback that is coming from the initial market interaction. You need to be agile and flexible to navigate the marketplace and solve your customer problems.

Think what you would do better in your environment and if you can build a business from that. This way you will train your entrepreneurial alertness – a propensity to notice and be sensitive to information about objects, incidents, and patterns of behaviour in the environment, with a special sensitivity to maker and user problems, unmet needs and interests, and novel combinations (Ray, Cardozo, 1996).

Valuable is observation of behaviour of potential users. It can uncover hidden opportunities for your future business. What is helpful when creating and evaluating ideas is a wide network of contacts. People with different perspective that give you honest feedback and help you develop your idea. Your social network is not only source of information but it can be valuable source of other resources – financial, human, customers. Great source of ideas is experimentation. Taking what you have and showing it to people. This way you can observe their reactions and listen to their wishes. Designing experiments around your business idea will help you learn by doing.

Business opportunity is a possibility to satisfy market need trough a new combination of resources that will offer added value (Kirzner, 1973). It can be a situation in which new goods, services, raw materials and organizing methods can be introduced and sold at greater price than their cost of production (Shane, Venkataraman, 2000). Business opportunities have 3 central characteristics: potential economic value – potential to generate profit, newness – something that did not exist previously or wasn’t available on the market, perceived desirability of the new product or service in society (Baron, 2004).

1. Unfulfilled market needs – value sought
2. Unused or inefficiently used resources – value creation capability
3. Combination of the two

Entrepreneurs are following replicable process to turn idea to business. First they need to identify unmet market need or customer desire. Then they need to think how to satisfy this need or desire. What products or services can help customer deal with that? When they have the idea for product or service they must think what resources are needed for creating the product or service. They create a preliminary business plan. In case of very simple business ideas, this plan can be only mental with basic financial calculations. But every entrepreneur needs to determine which resources are needed for a successful start of business operations. This estimate needs to encompass also costs of delivery. When everything works out, successful entrepreneurs can replicate the process of value creation, delivery and payment in order to maintain sustainable business.

The process of turning idea into opportunity is complex and requires thinking and planning. First you need to decide on your market entry strategy. How will you get your product or service on market and more importantly, how will you persuade potential customers about the added value of your product? You need to identify resources that are needed for the market offering. What do we need in order to offer the service or product? This is not only the monetary cost, but you need to think about knowledge, skills, people - employees, partnerships that are needed to create a sustainable business. When evaluating the potential of the opportunity it is good to assess the scalability of the business. In case the business grows, what does it take to scale the operations? Based on the market estimate and value of your product / solution proposition, you propose a pricing strategy of your business. That is important for you cash flow projections. Paired with your cost estimates you have another parameter for opportunity evaluation.

• Timing
  • Too late – market is saturated
  • Too early – people are not ready or the technology is not available
• Hobby-projects – the market is not big enough to create sustainable business

VPC is an extension of Alex Osterwalders Business Model Canvas.

Source: https://strategyzer.com/canvas/value-proposition-canvas

Value proposition canvas is a simple one-page tool that helps you categorize thoughts about the product in direct perspective to customer needs. It visually pairs your solutions to pains and wants of your future customers.

Right side of the canvas represents the customer segment (persona). What you write to the canvas should be based on the behaviour you observe in the market. Do a Painstorming exercise before filling out your canvas.

The space for Jobs should include tasks that your customers are trying to get done. Connect this with the industry you aim for with your future business. If you don’t have industry preference, follow the lives of your segment in general.

Under the space labelled Gains J describe what they would love to have. What they expect, desire, would be surprised with (functional utility, social gains, positive emotions, cost savings)

Under the space Pains L writhe what they don’t like. What things connected to the jobs they want to change? 

On the left side of the canvas you describe the value you are offering to them.

In the space Products & Services write what you offer to customers. It should be a simple product or service description.

In the space Pain relievers explicitly explain how will your product or service alleviate customer pains before, while and after the customer is trying to get their job done.

In the space Gain Creators, explain how your products or services positively impact customer lives. You list explicit benefits and outcomes of using your product or service.

We can talk about Problem solution fit when the features on the left side map onto the spaces on the right side. You can easily spot any contradictions and you need to adapt your business accordingly.

We talk about Product market fit when your sales start to grow. Customers are buying and you see growing tendency.

• What products and/or services will be offered?
• To whom will the products and/or services be offered and what specific needs of these customers will be satisfied?
• What is unique and will constitute and added value for the customer when compared with what the competition offers?
• How the products and/or services will be delivered to the market – the concept of production and logistics, sales and marketing, partnerships?
• Who are your customers? What their needs do you satisfy?
• What is your current domestic and international competition and what is your advantage (unique selling point) against them?
• How big is the market? How will the market develop in the future? What is the current trend?
• How will you make money in this business? Are sales revenues and profits high enough?
• How will your customers get to know you? What marketing strategies will you use?
• Who are your key suppliers and how do you ensure cooperation with them?
• Who are the members of your team and what are their strengths?
• What are the major risks and how will you fight them? How do you plan to sustain your competitive advantage for the future?