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There are many ways to define ideation, and it all comes down to context. According to Investopedia, ideation refers to the process of developing and conveying prescriptive ideas to others, typically in a business setting. It describes the sequence of thoughts, from the original concept to implementation. Anyone within an organization can partake in it, and it can be derived from any medium or activity where ideas are exchanged. That’s the general definition.
When you drill down on what this means for startups, it means identifying big problems that are ripe for disruption and is usually separate from the go-to-market strategy. It entails a process of discovery designed to lead towards the creation of innovative, dynamic and impactful enterprises.
Here are the building blocks of the ideation process:
Choosing the right partners
Serial startup entrepreneurs know all too well that the ideation stage is hardly all theoretical. The aspect of generating an idea is merely the starting point. That idea would need to be developed and transformed into a promising opportunity through innovative thinking, market research, competitive analysis and dynamic business modeling.
One core element that can help make the ideation process more efficient is the gathering of minds with different sets of experiences combined with tacit knowledge. Your advisors, mentors and potential co-founders would best have experience in different industries and unique skill sets that complement your own. While those differences are encouraged, alignment across several fronts would also be essential. This includes core values around work-life balance, the type of product you want to invest in, how to manage the team and so forth. Align expectations clearly concerning the above as well as your exit horizon. Realistically speaking, it wouldn’t be possible to agree on every element of each of those aspects, but the goal is to not strongly disagree.
It would also be a good idea to try out some exercises with prospective co-founders or team members to get a better sense of how well you all would work together. As the saying goes, you never truly know someone until you live with them. This can be tested by putting actual, realistic business tasks into play. Ideally, these tasks would have a goal, a beginning and an end that needs to be achieved.
Additionally, founders should feel that there’s a fit between the type of technology they are experienced with, the product they are wanting to launch and their target market.
One must seek validation of ideas from industry experts, and even people that qualify to be amongst the future target audience. However, it’s important to take positive feedback with a grain of salt. This is because there is a great possibility that the people who are quick to offer compliments are just being polite. Authentic positive feedback can be identified when it’s followed up with introductions and connections to potential design partners, advisors, partners and investors. Naturally, no one would waste their colleagues’ time if they didn’t truly believe in the concept and pitch.
One known trick to gather knowledge on trends and underlying market numbers is to scan listed (public) companies’ financial statements. Those are valuable insights that are up for grabs.
Understand that need does not equal demand
During the validation phase, there needs to be a clear understanding of the need for your future product, because in the eyes of investors and potential clients, there is a big difference between need and demand. A need doesn’t necessarily represent a priority with a budget, but demand does.
While gaining the understanding of where your idea lies on the spectrum of need and demand, it would also be beneficial to have an answer to the question of, “Why now?” Proficient knowledge of macro and micro trends will prove to be extremely useful here.
All in all, the key to a successful ideation stage is the same as most other elements of running a business. It all boils down to passion, dedication and the willingness to make adjustments along the way to maintain a unique edge.