How I find business ideas

What's up, everyone? This is Alex, the host of Founders Journal. As you may know, I built Morning Brew from my senior year of college until we sold the business in 2020. And now I'm building a variety of businesses in different spaces and different stages. I'm basically averaging 1 to 2 new businesses per year. And because of that, I have had the opportunity to test a ton of different products and services, ultimately landing on a core software stack that serves as my business operating system whenever I start a new company. I have my go-to banking service. I have my go-to formation service. I have my go-to domain hosting service. But probably the most important of them all is my HR service, Gusto. If you're a longtime Founders Journal listener, you know how much I think about people in the context of business. A business is nothing without its people, which means a platform that helps me manage and take care of my people is invaluable. And that means I've tried every HR platform under the sun, always with the same exact goals in mind. First, I want a product that's intuitive and delightful to use. As a non-HR person, I find the intricacies of payroll, benefits, taxes, compliance, and expenses to be painful. So I just want something that makes my life easier. Second, I want it to be affordable. I'm a bootstrapper at heart. I started Morning Brew with $0 and I started StoryArc with $0 as well, which means I don't have infinite dollars to drop on SaaS products. And third, I want a platform that acts as my one-stop shop for all things people. I want it to handle payroll, benefits, hiring, onboarding, and taxes, all while integrating with all of the other tools in my business stack, whether it be QuickBooks, Slack, or Google Workspace. Well, Gusto hit the trifecta, which is why I am a customer and use it for every single one of my businesses. Yes, this is a paid sponsorship by the amazing team at Gusto, but I would sing their praises even if I wasn't being paid to do so. So if you're looking for a platform that takes the pain out of payroll, benefits, and HR, I highly recommend you check out Gusto. And if you sign up at gusto.com/alex, you will get your first 3 months free. Now onto the episode.

What's up everyone? This is Alex Lieberman and this is Founders Journal. For those who are longtime Founders Journal listeners, welcome back. For those who are new to the show, here's the deal. Founders Journal is my audio diary made public for the world. My goal is to increase your odds of success as an entrepreneur by sharing the stories, lessons, and tactics that I experience as I build my businesses. You can expect the podcast Monday and Wednesday with episodes that are under 20 minutes in length. And if you want to get notified when a new episode comes out, make sure to subscribe wherever you listen. Today on the pod, I am breaking down startup ideas, why finding the right one is the most important choice you make in business, and the different ways that you can discover them. Lastly, if you haven't yet introduced yourself, please do so. I love getting to know the community, so please shoot me an email at alex@storyarb.com. That is alex@storyarb.com. O-R-Y-A-R-B dot com, saying hi, and I'll get the conversation going. Now let's get into it. I love thinking of business ideas, both because it's the most satisfying form of intellectual masturbation, but also because it is probably the most high-leverage choice a founder can make. And for those of you in the camp that say execution matters more than ideas, this isn't the episode for me to step on my soapbox and explain why I think you're wrong, but let's say that Marc Andreessen may be right in his 2007 essay, The Only Thing That Matters, where he says, I'll assert that market is the most important factor in a startup's success or failure. Why? In a great market, a market with lots of real potential customers, the market pulls product out of the startup. The product doesn't need to be great, it just has to basically work. And the market doesn't care how good the team is as long as the team can produce that viable product. The number one company killer is lack of market. Andy puts it this way. He says, when a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins. When a great team meets a great market, something special happens. Now, if you think there's a chance that Marc Andreessen is right and market is the most important choice you make with a business, that would suggest that your business idea is also the most important decision since market is embedded within the idea you pick. Tack on the fact that whatever idea you choose, you're likely dedicating 3 years minimum and potentially decades to the idea. It's probably wise to have a method for finding and filtering business ideas that is proportional to how big this decision is. I wanna focus the rest of this episode on finding ideas, and then I'm gonna dedicate an entire other episode to how to filter them. So how do I find business ideas? There are two big buckets: internal ideas and external ideas. Internal ideas are those that I find through my own experiences. They are problems that I personally experience in my life, opportunities that I personally stumble upon. The benefit of internal ideas is that they should be high fidelity because I experience the problems myself. The downside is that. I'm one person, so my aperture for finding business ideas is narrow if I just rely on problems that I experience. External ideas are those that I find through the experiences of others. They come from talking to experts, listening to podcasts, reading research papers, or conducting user interviews. The beauty of external ideas is they give you a ton more surface area to find the idea you want to dedicate your work to. But the risks are that they can be less precise depending on the quality of the source that you're getting these ideas from. And it also may be harder to build an external idea passionately for a long time versus one that you actually experience yourself. Let's first talk through internal ideas and all of the strategies that I use to source them. The most important behavior that I have adopted in life to mine for business ideas and store them for when the time is right is by turning my brain off autopilot and keeping a pinned note on my iPhone. Turning off autopilot is simple, but I think it is the most profound shift that any entrepreneur can make to bring awareness. Let me break it down this way. There are 1,440 minutes in a day. For the majority of those minutes, you are not consciously aware of everything that you do or all that is around you. You're not thinking about the way that you're lifting your foot to complete a step. You're not thinking about how the touchscreen on your iPhone works. You're not thinking about What if my car had full self-driving right now and I could do anything other than keep my foot on the pedal and my eyes on the road? Our brains stay on autopilot for the vast majority of a day because that is the only sustainable way to live our lives. But if you're looking to mine for business ideas, taking your brain out of autopilot and bringing awareness to the things that you experience is how you create a repository of internal ideas. And so there are 4 tools that I use to consciously turn my brain off autopilot. The first is what I call the Friction Finder, which is my tool for identifying suboptimal experiences as I go about life. When I'm using the Friction Finder, I'll go about my day and ask a few friction-focused questions. I'll ask first, why am I feeling friction in this experience right now? And I'll come up with an answer for myself. And then the second question I'll ask is, what is preventing this experience from being frictionless? Again, I'll answer that question. The next tool I use is the why ladder. I most commonly use the why ladder when I'm trying to get curious about life and there isn't necessarily an experience that is obviously painful for me. And just for context, when I use the friction finder, it's when I am experiencing frustration or pain or some like not great feeling. I use the friction finder. That's kind of my go-to tool. The why ladder is when there's nothing obviously painful, but I want to get curious about life. So with the why ladder, I just ask the question why over and over as I go about my day. So for example, why can't I have more discipline around using social media? Why don't my AirPods work when I'm talking on the phone? Why can't making a YouTube video be easier and less daunting? Why can't dress socks be more comfortable and stay up on my legs? By definition, the why ladder forces you to go from experiencing life passively to being an active participant. Next up is a game I call What If. I will ask the question, what if, in my day-to-day, especially around the activities that take up the most money or time in my life. Today it was, what if I could scan my closet and have recommendations provided of all of the outfits I could create using just the clothes that I have? Yesterday it was, what if an MRI machine could be shrunk to tabletop size so that everyone could have an MRI in their home and scan themselves as needed? Or what if I could charge my laptop wirelessly right now? The what-if exercise is an opportunity to be my most imaginative self and have my biggest ideas without any judgment or any filtering. And the final exercise I do for internal ideation is scanning for repetition. At the end of a day, I will sometimes ask myself a simple question. What did I do today that I find myself doing over and over? Because if I do it over and over, it's both likely programmable into some piece of software, and it also is likely a repetitive task that other people experience in their lives. Examples of repetition scans include checking social media 30 times per day, scheduling calls with people over email constantly, and going through my checklist on Apple Notes to make sure I'm getting done all of my tasks. So those are internal ideas. Now let's talk about external ideas. There are 2 major sources for external ideas in my life. The first is content and the second is conversation. For content, when I am looking for good business ideas, I am focusing my time consuming thoughtful content and content by thoughtful people. Thoughtful content refers to content that took hundreds or thousands of hours to create or to prepare for, and it is content that has a long shelf life. Thoughtful people come in 2 sizes. There are horizontal thinkers, people who know a good amount about a lot of things. These are people like Naval Balaji and Marc Andreessen. And then there are vertical thinkers, people who are the top 0.1% in their given field. People like Justin Maris in the US food complex, people like Palmer Luckey in defense, or Dylan Patel in AI and semiconductors. And whether I am consuming content from horizontal thinkers or vertical thinkers, my go-to content formats are the following: long-form interview podcasts where hundreds or thousands of hours of research have been done, essays that have been published on the thinker's site, and academic research papers. The second bucket of external ideas comes from conversation. I have 3 favorite forms of conversation, and they are something that I'm going to try to prioritize even more moving forward. The first type is what I call salon-style dinners, like 17th-century French salons where intellectuals, artists, and writers would engage in moderated discussion about everything from economics to politics to philosophy. Dinners that have a curated group of high-quality founders, researchers, and intellectuals have always been a hotbed for new and interesting ideas for me. The second type is employee and customer conversations. One of the best places to look for good business ideas, especially B2B ideas, is within my current businesses. Whether it's understanding the biggest pain points of agency employees' jobs by talking to the team at StoryYard, or thinking of future ideas for my AI content strategist Distro by setting up user interviews with several of our paying customers, looking within your business or your own work is one of the best ways to find ideas steeped in real problems. The final form of conversation for sourcing external ideas is one-on-one calls or coffee chats with vertical experts. I started doing something called show and tells where I will schedule time with a vertical expert, and I set the expectation that for the first 30 or 45 minutes, I will interview them about their work, the biggest unsolved problems that exist within their world, trends they're watching, and other things that are top of mind. And then they will do the same thing for me. For the second half of the conversation. So those are all of the ways in which I am basically acting as a magnet for business ideas in my life in order to land on the one or two ideas per year that I actually pursue and throw all of my energy behind. Now, 2 final notes before we finish up. First, as important as finding business ideas is, capturing them so you don't forget them is equally as important. My great business ideas will sit on ice for years before I actually decide to take action, and so keeping them somewhere is key to making that possible. For me, I have a pinned Apple Note for business ideas that I will add to multiple times per week. It works well for me, and you just need to find the method that is low friction for you. Second, give yourself grace. Have grace when thinking of business ideas, knowing that most of them are going to be crap. But that is exactly how this process should work because you want to allow any ideas to. Come to you without judgment. There will be time later for filtering and picking. This just isn't that time. And on that note, have grace to let ideas marinate without feeling pressure to start a new business or pursue a new idea by a certain date. Finding a great idea to build a business around can take years, and it is well worth the wait to pick the right one. That is it for today's episode on business ideas, why picking the right one is so important, as well as all of the ways that I think of business ideas both internally and Externally in my life. Thanks so much for listening to Founders Journal. Shoot me an email to alex@storyarb.com saying hi, hola, what's up, or whatever else takes you less than 10 seconds, and I'll get the conversation going. Thanks again for listening, and I'll catch you next episode.