What To Do When You Have a Startup Idea But Don't Know Where to Start

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Dec 22, 2017
I’ve written a fairly popular post about this topic that I’ve linked to at the bottom, but here is a summary.

Determine your goals and check your passion

Generally, when I talk to people they have one of three goals for their startup idea:

1) They just want someone to listen to their brilliant idea but have no desire to actually build it

2) They are trying to build a small project for fun (typically as a side project)

3) They are trying to build a scalable startup

Make sure you are honest with yourself and understand your goals before spending too much time moving forward.

Next, make sure you LOVE the market you’re going to be serving.

It doesn’t matter if you love the solution or the technology you want to build it on. Assume that the product and technology will be completely different in 1–2 years time.

It doesn’t even matter if you love the specific problem. The problem will definitely change over time. Will you change along with it?

Assume that your business model will change multiple times over the next few months or years. Are you passionate enough about the market to commit the next 5–10 years of your life to it if your company succeeds?

List out your assumptions

When you think about your startup idea, you are envisioning a world that doesn’t yet exist. In order to create that world in your mind, you have to make certain assumptions about things that don’t exist and haven’t happened. Those assumptions carry no risk in your fantasy world, but in reality they can.

It’s foolish to think that your risky assumptions about the problem, solution and market are all correct. Spending your time and money based on those assumptions is irresponsible. Spending other people’s time and money based on those assumptions is downright unethical.

List out all your assumptions and systematically go through the riskiest ones and validate them.

There is a fallacy that validating assumptions means that you’re proving them true. But, this isn’t science, it’s business. Assumptions that are validated become less risky assumptions. There are no truths. As an entrepreneur, your job is to reduce the risk enough to where you can justify moving forward.

Prioritize your assumptions

There is much debate over what assumptions to validate first. You almost definitely have risky assumptions for your problem, solution, and market.

In general, you want to prioritize the assumptions you want to validate based on risk, not based on type. It’s ok to interleave between validating market and product.

That being said, in almost all cases, you should validate your riskiest assumptions about the problem and the market before spending time validating your assumptions about the solution.

If you, yourself, are experiencing the problem and have an intimate knowledge of it, then I would lean towards getting a better understanding of the market first.

On the other hand, if you know a lot about the market already, then I would lean towards getting a better understanding of a particular problem that is worth solving.

If you don’t have a good sense of either the market or the problem you want to solve, you might be pursuing the wrong idea. Again, you need passion for the market you’re going to be working in. If you don’t know the market well, stop pursuing the idea and start researching and learning more about it first.

Validate the market

So, how do you validate the market without a product?

Well, since you have no product, you can’t really validate that your exact product, as you envision it, would fulfill a specific market need. But, you can test whether there is market demand for a particular value proposition.

A value proposition is a description of how you will make the customer’s life better. Constructing a value proposition requires you to have some sense of what the problem and solution are.

How do you present a value proposition to test market demand? You describe the value proposition and make an offer. You can offer information in exchange for an email. You can offer a pre-order in exchange for money. You can offer a future discount or credit in exchange for inviting friends.

You can make these offers using landing pages, online ads, contests, or a good old-fashioned sales pitch.

You really don’t need to have a product to offer somebody something. The entire premise behind crowdfunding, for example, is based on the notion that you are offering somebody something that doesn’t exist.

If that doesn’t convince you, have a chat with any sales person who has worked at any software company, ever. Ask them about how much “vaporware” they’ve sold (i.e. software and features that doesn’t exist yet).

In my last startup, we got hundreds of consumers and dozens of small businesses to sign up for our e-commerce marketplace before we even launched. We signed up consumers by offering store credit (for a store that didn’t yet exist). We got small businesses to list their products by offering them a reduced commission rate (for a store that didn’t yet exist).

Don’t be afraid to offer people things you haven’t built yet. Research can only take you so far, but asking people to take some action will help you understand the market demand.

Validating the problem

Assuming that you’re comfortable (enough) with the market, you’ll want to make sure you’re solving a real problem before spending too much time building a solution.

Time to dust off you interviewing skills. You need to get out of the building and talk to people.

I’m not going to dive into the mechanics of interviewing in this article. There are several great articles that I’ve listed below. There are even entire books dedicated to this topic.

But, I will give you some high-level advice:

Don’t talk about the solution — At this stage, you’re interviewing customers to understanding the problem. Don’t worry about proposing a solution, or trying to sell anything.

The founders need to do the interviews — Problem interviews cannot be outsourced. Would you really commit years of your life solving a problem that someone else said they validated on your behalf?

You don’t have to have a solution in mind to run interviews — Doing interviews and narrowing in on the problem can help you come up with a specific solution. Start talking to people as soon as possible.

Know if you’re talking to the user or the customer — Users use, customers buy. Sometimes they are the same like someone buying an app for themselves. Sometimes they are different like someone buying an app for their child or an executive buying a SaaS product for their marketing team. Know who you’re talking to.

Don’t ask people their opinions — Answers to opinion questions such as “what they think about X?” or “what would do if Y?” are generally not useful. People aren’t good judges of why the do things. For past behavior, ask people to describe the last 1–2 times they encountered the problem and how they solved it. Don’t even bother asking them what they think they would/will do in the future.

Interview in pairs— Writing and taking notes during the interview can be awkward. Most people will behave differently if you’re trying to record the conversation. I like to have an interviewer that is focused just on the conversation and a scribe who is just taking notes.

Capture the customers exact words and emotions about the problem— The exact language your customers use to describe the problems they face and their feelings about the problems are extremely valuable. It is highly likely that the words they use to describe the problem during these interviews will resonate with other people who face the same problem. When you go to craft your marketing material, you’ll likely want to use their exact words to describe the problem.

I’m done with my interviews, now what?

The outcome of your problem interviews will be one of the following:

1) You found no problem worth pursuing

You were absolutely wrong about your problem hypothesis, and you didn’t learn about any other compelling problem worth pursuing.

Congratulations! You just saved yourself a lot of time and money by invalidating your problem hypothesis.

That being said, you might have been interviewing the wrong customer segment. You may want to reevaluate whether you should rerun the interviews with different people. Or, you can try to come up with a new problem hypothesis or switch to an entirely different startup idea.

2) Your hypothesis about the problem was invalid, but you discovered another problem worth pursuing

You were wrong about your problem hypothesis, but you learned about another compelling problem.

Congratulations! You have a problem that you can pursue. Remember my spiel about loving the market because the problem might change? Well, things just changed, sooner than you thought. Since you love the market, this shouldn’t bother you too much. Go after the new problem you’ve identified, or switch to an entirely different startup idea.

3) Your hypothesis about the problem was valid

You hit on a very specific problem that seems extremely compelling and it is obvious to you and those you spoke to that a solution needs to be created.

Congratulations! You were right. But don’t let it go to your head, you aren’t even close to having a viable business yet, there is a ton of hard work ahead of you. You still have to validate your assumptions about the solution and the market. Then, if you nail those, you have to build a product, launch it, achieve the highly sought-after product/market fit, and scale the company. You have years of hard work ahead of you.

Javid Jamae in his opinion shares his experience on startups and not knowing where or how to start.