An inspired idea is the first challenge in creating one’s own startup. It needs to be unique enough to hold a competitive advantage, whilst not being too niche where a market cannot be served. An entrepreneur may try and fail many times to build a successful start-up, finding no mercy in the gruelling sector. However, when a start-up becomes successful, the potential scalability and freedom from conventional work hours is a lucrative reward for the time invested.
Ambition must then fuel the founder to further their business past initial incubation. The founder must navigate the hiring of advisors, administrative support, and the signing of potential investors. All of this is done in the name of seeing their idea come to fruition, a shining success capturing the time and financial commitment the founder has endured.
Our guest today has undergone this founding process and is the owner of EdAtlas, a company providing holistic tutoring to VCE students. EdAtlas cares beyond scores achieved and challenges students’ perspectives on learning to help them succeed beyond the classroom. Read along as we interview Robert Liu, founder of EdAtlas, as he shares his insights into the journey of a start-up to help us decompose ideating stage from a first-person perspective.
The Beginning
Startups, typically romanticised by colours of imagination, creativity, luck, and spontaneity, are actually a structured process where the development of which follows the phases of ideating, committing, validating, scaling, and establishing.
Ideation as the beginning of the whole development process refers to the phase where the team brainstorms, filters, and develops an idea that solves a business problem, along with a business plan. As the saying goes, “ideas are the currency of life.” If good ideas can be identified precisely in the first phase, the company is halfway on its road to success.
Robert stressed that although ideating is what builds a company in the initial stage, it is more of an ongoing process that is “spread across almost everything.” Specifically, Rob used an example of launching a new app for EdAtlas to illustrate the point. “We have to ask ourselves: why are we building this? Does it actually move the needle and is it worth the efforts and funds?” Hence, the key question that should be considered when ideating is: “Is the idea going to meaningfully improve the lives of the stakeholders?”
Ideation is about spotting an undiscovered problem that is unique and coming up with a solution to it. An entrepreneur’s capability to distinguish competitive opportunities is not only important in the initial stage of company creation, but also crucial for initiating new changes throughout the company’s life. Theodore Levitt, Marketing Professor at Harvard, says it best by illustrating the importance of targeting the right problems in early start-up development. “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” Customers do not buy products, but the solutions to problems.
How terrible is your idea?
Ideation takes a combination of divergent and convergent thinking. Divergent thinking creates multiple options and a broad set of choices. It helps entrepreneurs to map out every possible problem that they wish to solve. Quantity outweighs quality at this stage because as Manuel Tanger, Co-Founder & Head of Open Innovation at Beta-i , points out, “90% of ideas are not that interesting, so you need a lot of them until you can work on the 10% that are reasonable.”
Convergent thinking takes place in the later stage where a massive number of ideas begin to narrow down. Ideas proposed are analysed one by one and are assessed based on the criteria set, and those which are not competitive enough are eliminated. Eventually, one final market friction is chosen for a business to solve.
What is the criteria set you may ask? Well, Robert had three golden rules to share.
The first is to consider whether the idea is non-replicable for your competitors. When establishing EdAtlas, Robert asked himself: what is the unique skill set that I have and other people don’t? What can I do that most people currently either don’t do, or they can’t do? Thinking about one’s competitive advantage helped Robert better understand where to invest this time and resources.
The second is to find a problem that one genuinely enjoys and cares about. As Robert puts it, “reducing greenhouse gases, making the world a more sustainable place is a huge problem, and it’s probably more important than the problem that I am potentially solving. But I’m not waking up at 7:30 am really excited about doing it.” Every entrepreneur faces obstacles and emotional downturns during the founding process — those that are truly passionate are the ones that stick it out to the end.
Last but not least, is the practicality of an idea. This includes the profitability and sustainability of a business model. At the end of the day, every business needs money to develop and grow. Having a solid financial structure from day 1 is the key to early startup survival and long-term sustenance.
Grind, Grind, Grind, etc…
Idea incubation itself is a highly-iterative process that is time-consuming and frustrating. Within 582 million entrepreneurs around the world, 20% of startups owners gave up on their ideas after an unsuccessful initial stage.
To decrease the level of disappointment towards obstacles faced by startups, it is advised that entrepreneurs should never view one strategy as the be-all and end-all.
Be prepared to change everything about your business plan at a moment's notice because, in the start-up world, that’s just another Tuesday. Flexibility when it comes to change will allow you to embrace better opportunities as they pop up. A tip from Robert is to test your ideas with people you trust. For example, Robert has regular meet-ups every six weeks with a mentor to try out his ideas. “Finding people who are in the right position in life, who will take the time and who are really invested in you, I think, that’s really valuable.”
Going forward:
If this article has been helpful and you’re dying to know what happens after you’ve got that winning idea, stay tuned for our next blog post where we’ll explore the creation of your initial founding team. What traits should a founder prioritise in the hiring process? How do you navigate payment if the project is not initially profitable?
Comments