The Art of Ideation, Part 1: Be a BUM
While exploring the idea for my NewCo, I taught a well-received online course at Oxford, OnDeck and via theHustle. The course is about one of the gnarliest challenges of business: generating and evaluating business ideas. I like to call it “The Art of Ideation.” Since I first taught the course, I’ve clarified it some, and now I’m turning it into a 5-part article series.
In this series, I’ll outline an approach to startup “ideation” that I believe hasn’t been available on the Internet to date. I hope I’ve made it both strategic and high-level but also practical and actionable. Enjoy :)
Overview
Ideation is not a straight-line path. In reality, “ideas can come from anywhere.” You never know when that light bulb moment will happen. I’ve divided the process into 5 concrete sections, but the lines between these sections are blurry and the path through them is nonlinear. One day, you may be in the Definition phase, and realize you have to go back to the Exploration phase because you got stuck. This happened to us at Udemy: we started thinking that live video lectures were going to be the “next big thing,” and in 2009, our customers weren’t having it. We went back into the Exploration phase, talked to lots of instructors, and realized that video-based courses were the future. That started a $3B company.
Sometimes the problem doesn’t appear until the Traction phase. You may be building a company, with a full team and a thesis, and realize that you jumped to the Traction phase too early. You pivot completely and have to start from scratch again. This is how Twitter, Instagram, and countless other startups were born.
The framework:
Step 1: Exploration
This is post 1 of 5, covering the topic of exploration. This is the hardest phase, because by nature it is vague and meandering. You actually are supposed to be unproductive for long periods of time and feel like you are going nowhere. So I wrote the post itself that way: it’s the least tactical of all, to mimic the reality of this phase.
The question we ask here is: how do you even figure out what you want? What market should you enter? Where does inspiration come from? I have two frameworks for this: Be a BUM x Ikigai.
Be a B.U.M.
The Bum framework is part story and part framework.
The story is this: if you are like most entrepreneurs, you are used to the hustle and bustle. You set KPIs or goals and achieve them. Often, you have 5-10 goals at once. It is hard to slow down and quiet your mind, but that’s ok because you like it when your mind is running at a million miles per hour.
However, the Exploration Phase is a creative phase. It’s not about execution. What helps you raise money, write product specs, ship code, and recruit candidates is completely useless in the Exploration Phase. You need to look inward, and that busy bee mentality only hinders you.
I highly recommend giving yourself long, unstructured time during this period. It’s ideal if you’re completely off work, but that’s not always possible. What is possible is controlling your schedule so that you have 3-5 hours regularly of “open time” where you do not have an agenda. This means that when a really famous potential business associate is interested in taking a meeting, you make them wait for when it fits into your schedule. You prioritize the time you’ve blocked out for cultivating ideas. Your future self will thank you. It means you don’t take meetings in the middle of the day if you can avoid it, because this stunts creative energy. You can never get into “idea flow” if you have a commitment hanging over your head, even a 30 min call with a friend.
Then, go to your happy place. Go for a long walk, a bike ride, etc. Do not put any pressure on yourself to achieve your goal of starting a company. The more pressure you put on yourself, the harder it will be to foster your creative brain. I’ve found 3 ways to do this:
Before Udemy, I was a college grad with no savings. I had a job at Accenture and did the bare minimum I could to get by. Mentally, my head was in the clouds for about 6 months before meeting the Udemy co-founders.
Before Sprig, I still didn’t have much money. I consulted at Lyft and started the Growth Hackers Conference. These were time-passing activities where I checked in for 25-30 hours per week and then had lots of free time outside of that.
Finally, the big kahuna. Before this company, I had ample resources and time, so I took a full 3 years off. Almost 2 years of full Exploration. Then, 1 year for the rest of the phases.
I highly recommend being independent during this time. Do not feel too tied down work-wise. If you have a family, spend more time with your kids and really dive into their lives. If not, go travel. It is OK to spend time with others, as long as you are being mindful of not using it as a crutch. You may hang out at a friend’s office, play sports, or teach. As long as the thing you’re doing is NOT intended for the goal of finding a new startup idea. As soon as you catch yourself needing the addictive energy of a life’s purpose, you must step off. The whole point of this time is to not have purpose, and to let yourself live in the purposeless state for a while.
I’ll recognize that while this whole section sounds trite, it is devilishly difficult to do. I’ve rarely met an entrepreneur in their “in-between” phase who seems truly at peace with it. The trick is to fight through that: if you succumb to your need to work, you will not have a truly fulfilling Exploration period. Instead, get through the first two or three bouts of listlessness and force yourself to become comfortable with having little to do. That is how you foster true creativity.
As long as you are true to this wistful creative phase, it is OK to do research. In fact, I’d encourage it! Follow the BUM framework for areas you should dive into:
Business, User, Market. BUM.
Business
This is a great time to crack open books about business - biographies of famous business people, for example. I’d also recommend podcasts, watching videos of entrepreneurs, and even taking classes on the subject. Do not force yourself to be directed or purposeful, just do stuff that interests you.
Examples of books I love are Zero to One, the Hard Thing about Hard Things, the Elon Musk biography by Ashlee Vance. Books you should not be reading are High Performance Management or any other book that gets you in the “zone” of managing. You want big picture bullshit, not specific actionable advice.
For audio content, I love How I Built This, TED Radio Hour, 20MinVC and countless audiobooks on Audible. Again, avoid super industry-focused podcasts that rehash news or are focused on what happened last week. That shit is noise and you want to rise above the noise during this period.
User
If you’re building a business that sells to people (either B2B or B2C), you must have deep empathy for users. How do you do this?
Become one.
Watch them.
Become a user by accomplishing daily tasks and having a “normal” life. When you have lots of free time, you’ll notice yourself naturally spending that time on activities that are quite similar to what your future users might want to do. If you tend to spend lots of time on TikTok, great. If you love playing soccer, go play soccer. If cooking is a big passion, read cookbooks and make elaborate meals for your friends and family. If you’re a coder or designer, code or design things purely for fun. So many entrepreneurs lose touch with their human side when they get into ultra-performance mode, and that kills the creativity of knowing what humans may want or need.
I personally found myself doing so many “everyday” activities that I never used to have time for. Before Sprig, I decided to build a passion for cooking and went through most of the Four Hour Chef. Before Udemy, I became obsessed with TechCrunch and read lots of Paul Graham. Before NewCo, I learned basic Chinese, improved my Spanish, learned salsa dancing, and tried to write a book.
Funny enough, as soon as I’m knee-deep in company building, these types of activities fall by the wayside. I tend to be super efficient with time, so it’s useful to remember that being a user is an actual tactic in and of itself!
Watching them involves being a fly on the wall. Entrepreneurs are used to being the center of attention, but now is the time to let that take a backseat. Instead, watch your target audience. You may not even know who that is yet, so just put yourself in lots of different positions that may get you there. If you’re at a yoga studio, give yourself the time to introduce yourself to the yoga teacher and ask questions. If you’re meeting with a friend who works at a bank, ask them about their job, what they like and what they don’t.
Again, time gives you the opportunity to have serendipitous encounters that provide you with more information. 95% of this information will go to “waste,” as far as you can tell. That’s fine.
Market
Slowly over time, you’ll start to notice areas that you think are interesting. Mental health, fine art, payments processing. Who knows? I don’t, and neither do you. As you read books about business and behave like a user, questions will start to come to your mind. Why can’t I do x? What if I built something that does y? How would the world be different if z? Have an idea notebook (digital or physical) where you jot ideas down as they come.
x, y, and z are seeds of ideas. Too many people take these seeds and assume they will end up with a great business. Unfortunately, that’s not how it works. Historically, there have been “moments in time” when a specific business idea is actually possible or practical. If you started a mental health company between 1990-2020, you probably failed. If you built a mobile games company in 2000, you were likely too early. If you get stuck on just one market, you will almost certainly be reducing your chances of finding a timely business opportunity.
Instead, have multiple markets in mind and start to explore them. As these ideas come up, go research them. Find out what other solutions exist to problems you’ve found. Create a new note for every category (x, y, z) and start to put together the solutions that you find. Think like a user: do not go and ask other VCs or entrepreneur friends, but rather ask other users with the same problem. Remember, industry analysts never build businesses. Entrepreneurs with unique insight do. That insight comes from primary work, not secondary analyses.
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That’s it? Yes and no. The whole point of the exploration phase is to chill the fuck out. Don’t over-analyze things; instead, be a bum and let it flow. Free time will give you far more ideas than the intense energy you bring to work every day.
Alongside the BUM phase is examining your Ikigai. This is a now-famous framework that’s all over the Internet, and it is extremely powerful. The word ikigai means “a reason for being.”
Why is this important? There are two parts to this:
Self-reflection and awareness.
The convergence of who you are and what can actually work.
1. Ikigai is first and foremost an exercise in self-awareness. During your exploration phase, I highly recommend putting yourself in deep self-reflection mode. For me, that involved leaving my lifelong home of California behind and hitting the road. I find I learn more about myself traveling than during any other activity. It also means therapy, psychedelics, hiking, and long conversations with strangers. New experiences tend to push you more and force you to confront realities of yourselves you didn’t know existed.
2. The second part is often overlooked by dreamers. Ikigai is insightful because it is practical. You can’t just do whatever you want - you must figure out something you want that people are willing to pay for. In business, this is a critical mindset shift for many entrepreneurs: MOST ideas you have will not actually work right now. Timing is everything.
If you did your job in the “user study” part of BUM, you’ll start to see the difference between opportunities that are timely and ones that aren’t. If users are currently trying to solve this problem in droves without a good solution, it’s timely. If not, it likely isn’t.
As an example, when Sprig first got started we thought a vertically integrated delivery-only restaurant would be the future of restaurants. It turns out we were right, but 5 years too early. Unfortunately, building the delivery infrastructure, the food production facility and the brand turned out to be too hard. Five years later, with the rise of ghost kitchens and the proliferation of food delivery apps, this idea feels far more appropriate.
Could we have known that was true? I don’t know. What I do know is that you can at least de-risk this by really being thoughtful in the exploration phase.
Force yourself to spend at least 3, if not 6-12 months in exploration before you start a business idea. Many people do this while having other jobs (ideally one that is less demanding so you have more free time). Some take long sabbaticals, as I did. It is up to you how you accomplish the aforementioned goals, but the result should be the same: purposeless, self-reflection time.
The next post is on Research - how to take this completely unstructured data and use it to help you define a market opportunity!
