Look around you. Everything man-made you see started as an idea. How will you change this world? Because with a scalable business, you will impact many lives, and will make your dent in the Universe.

Many rightfully say: “ideas are dime a dozen”, and “it’s all in the execution”. But your initial idea will frame and guide much of what’s coming. And even more importantly:

Some ideas are scalable, some are simply not.

One simple fact that every small business owner should appreciate is: it takes as much effort to create a small company as it does to create a large one. As a small business owner you probably have your head down, grinding through all the work you have to do executing your original idea. Just a little more time and it will get better.

However, if the idea has you as the epicenter of all company activity, it will never get better. You need to dedicate time to proactive development activities such as idea generation.

Generating good ideas takes time and energy. This is why you hate to let go of your last good idea, your “darling”. However to be able to scale you have to be willing to “kill your darlings”. In fact, chances are, after you read the first lesson you have realized that you have to abandon your latest idea, or at least modify it severely. Even if you don’t, in reality scaling means constantly refining and expanding upon your ideas.

Are You Out of Ideas?

How do you come up with a new idea? Your original idea was the only idea you’ll ever have.

Nonsense.

It may sound like a philosophical topic, but idea generation is actually a practical process. Below you will learn a number of practical steps for idea generation and then how to refine your ideas with your team.

Where and When do Good Ideas Come to You?

We are wired to respond to threats. When a charging elephant is racing through your village you do not have time to carefully consider all the options. You just need to get out of the way.

Problem is that in most of our work situations we are constantly dodging elephants. The mindset for dodging elephants is not the mindset you use to come up with a killer idea. In his book Hare Brain, Tortoise Mind: How Intelligence Increases When You Think Less, Guy Claxton explains why this is. Hare brain is quick reactive thinking. Trying to find the shortest path to a solution. Tortoise mind is more about finding lateral and previously un-thought of associations.

Tortoise mind is almost unconscious. These thoughts occur when you expect them the least. Waking in the morning, taking a walk, or sitting on the toilet. Supposedly Thomas Edison, the great American inventor, would sleep in a chair with a ball bearing in his hand. When he fell asleep the ball bearing would fall out, crash on the floor and wake him up. This is when he would have his best insights.

It is as if the hurly burly of the day clutters you mind with knotted concerns that obscure the view of the best solutions. Sleep pushes this clutter out of the way.

Another aspect is what Nathalie Goldberg in Writing Down the Bones describes as pulling threads. She suggests writing down topics to write about one after another for a few minutes without stopping to think about them.

Try this. You will be amazed and what you come up with.

The same is true for ideas. Go ahead and list out 10 ideas. Focus on getting as many ideas down on paper in 5 minutes. Don’t worry if they are nonsensical or stupid. No one else is going to see them.

Is the 5^th or 6th idea really good?

Was the 5^th idea even in your head when you started? This is the pulling threads part. You have to pull the thread that is currently occupying your thinking to get to the next thread. This helps you to shift from Hare Brain to Tortoise mind.

Practical Steps to Generate Ideas

• Go over the business idea evaluation sheet and read the subsections below to get inspired
• Think about your previous ideas and why you ruled them out
• Take a break – a walk, a nap, or anything other than thinking about generating a scalable business idea or work of any kind. Even sleep on it.
• If nothing comes to you during this break. Sit down and write out ideas just focusing on getting 10 ideas listed in 5 minutes. Do this listing first thing in the morning or just after your break.
• Take the best one of these and write out another list starting with this idea
• Choose what you think is the best idea
• Flesh out some details in an outline form
• Check your outline against the business idea evaluation sheet. If it gets a low score, look at your lists or start over again.

Not even sure where to start?

Start with your customers frustrations. What do they complain about? What could be better?

1. List 5 different areas of your work and private life, or lives of people you know well.

2. For each area, list 3 things that frustrate you or others, or you wish were better

3. Brainstorm better ways to deal with these situations.

You can generally help people solve frustrations in 4 different ways.

1) Providing Knowledge

Are you good at teaching others? Do you possess some rare or often needed knowledge? Or an experience with a complex process? This is a great way to start and could prove to be a stepping stone towards other products.

A typical way of selling knowledge is selling consultancy or training. But these are not scalable (= require scarce talent to deliver). Here are products that can scale:

• E-book
• E-course
• Membership website for your niche
• Business templates for a specific sector

To make this work, you need build an audience. You need to reach large number of people and win their trust. There are ways you can do this on scale, and we’ll cover them later in the course.

Right now, do some thinking.

Think: your knowhow. What can you teach others? Do some things come easier to you than other people?

Think: what do I want to learn1?

¹You don’t need to be the renown expert right now. Think of this as a learning opportunity.

2) Creating and Selling a Product

A scalable business is made up of simple and repetitive products. Often, in the center of a scalable business is a product you create once and sell to many.

• Build a software product (e.g. mobile or a web app…). It can scale beautifully as the cost of delivery is virtually zero.
• Customize, resell or upsell an existing product. There are plenty of scalable business that do well in reselling existing products (just look at Amazon). Can you come up with a cool new way to sell or reach large audiences of people?

Think: existing markets, existing product categories1

Lis products you or people around you are using today. Pick something that frustrates you, and you think you can do better, faster or cheaper.

Narrow down and simplify until you are able to explain it in one sentence.

¹ Look at sites like betali.st with new startups, browse through apps on the app store, product categories on websites selling software…

3) Collecting and Selling Data

Maybe you have a clever idea on how to create access to data that would be valuable to others?

• Research/study, industry reports, benchmarks
• Data on customer behaviour, likes and dislikes
• Make data available through APIs to other services

4) Being an intermediary

Look at existing markets you know. Is it difficult for people to find good service providers? Can you build a more efficient market place?

Watch out: this type of business often suffers from a chicken and an egg problem. Before you can become valuable for one type of a customer (chicken), you need the other type (egg) in large numbers. And vice versa.

How to Tweak an Existing Idea

If your existing idea could use some tweaking, think if any of the following alternates could bring in some scale:

• Solve the same problem in another customer segment
• Go for a lower-end segment of the market
• Split your current offering into smaller offerings
• Create alliances: co-marketing, co-creation, white labeling
• Introduce a new source of income that will scale better
  • Subscription per user per month
  • Usage based (per transaction, per capacity…)
  • Pre-paid credits. Virtual currency

Not Alone? Good for you!

Maybe you are not alone in this endeavor. This is great news! Here are some tips on how to put your minds together.

Isn’t it Best to Work out Ideas in a Brainstorming Session with Your Team?

First and foremost you have to lose the notion that good ideas are generated in free form “brainstorming”.

Johna Lehrer in his blog post Groupthink on the New Yorker website provides an excellent overview of the history of brainstorming. He also briefly outlines experiments with college students that show traditional brainstorming is not the most effective way to generate ideas. Two groups of students were given a problem (like improve some aspect of campus life). One group’s members were asked to first write something down before discussing it in the group. They did much better than those who were given the problem fresh when they first met.

Why?

Probably because when you generate an idea in a group you focus on defending your idea. When presented someone else’s idea you focus on how you can improve, modify, or criticize it. In which case an idea is thought about from numerous different perspectives as opposed to everyone thinking about their own separate ideas. Therein lies the value.

Structured debates do not happen on their own, someone has to lead. It is important that input is received from most people in the room. Quiet types are often the best at synthesizing or combining different viewpoints. It is particularly satisfying when two ideas get melded together to create an idea that is greater than the sum of the two ideas on their own. So, make sure you ask the quiet types what they think.

The key is not to have “brainstorms” but rather structured debates.

There is a lot said about Steve Jobs running Apple by making all the decisions himself. He did to a degree, however not without structured debates. In fact, it was in such a structured debate that the name iMac name was chosen. Ken Segall in his booked Insanely Simple points out that Steve Jobs wanted a different name, rejecting iMac the first time it was presented. No-one else liked the name Steve Jobs wanted. So, he laid down an ultimatum to come up with something better or it would be the name he wanted. Ken Segall was wise enough to present the name iMac again. The second time it stuck, Steve Jobs gave in.

How to Structure a Debate on the Ideas that have been Generated

• Have everyone who has generated ideas send them around to the group in a short outline or summary. If there are too many ideas you or someone else should do an initial selection
• Plan a meeting or teleconference to discuss the ideas
• Remind everyone of the scalable idea criteria
• Start with one idea and ask everyone to comment
• Extend discussion deeper by asking questions when someone else makes a point
• Frequently ask others by name to comment. If you know someone has particular expertise or interest in a topic be sure to ask him or her.
• Make sure you hear from everyone in the meeting.
• End the discussion on each idea by summarizing and making a judgement if it is scalable. Ask the others if they agree.
• End the session by going over all the ideas in a brief 2 sentence summary
• If there is a clear winner then say so
• If not make a plan for deciding between different ideas. What do we need to know or test to decide between two or more ideas?
• End by deciding what the next actions should be .

Conclusion and Next Steps

Whatever you do, think about idea generation as a practical process, not some warm-and-fuzzy, you-just-do-it type business activity. Please do share your tips on generating ideas with others in the course. Just comment below.

Once you generate a couple of ideas, go back to the first lesson of the course to evaluate and choose the one to go forward with.

Next lesson will teach you how to make the one choice that makes difference between a hobby and a business.