Choosing a new startup idea

I have been brainstorming new startup ideas over the last couple of months. I knew that I would have free time after a long consulting project would finish and wanted to use it to build something new.

The brainstorming process was simple: I tried to think of new ideas on most days and wrote down everything I could think of. Then I would read through the list occasionally and think further about the ideas that showed the most promise.

After a couple of months, I automatically started thinking more and more about a few ideas which excited me. They seemed fun to build out, provided good learning opportunities and I felt like I could do them well.

By going through this process, I managed to clarify that there were certain kinds of ideas that excited me the most. All of them had three things in common:

1. Fully digital
   For a startup, you can either provide a fully digital product/service or a combination of software and other services. I wanted to build something in the former category. On average, those types of ideas can grow faster as they are not limited to building out physical infrastructure or procuring any physical goods.

2. Software-as-a-Service (SaaS)
   Instead of selling its software, the startup licences usage through a subscription model. I have done both in the past and building a subscription service felt more rewarding. When selling something without a subscription, the company has to „start from scratch“ every month, as last month's sales don't neccessarily to lead to any sales in the future. Revenues for a SaaS startup may grow slower, but the company is more sustainable.

3. Business-to-business (B2B)
   Although I have sold to consumers through past projects, B2B is a stronger area for me. I have consulted for many companies and feel like I understand how managers and executives decide on investments in new software. Furthermore, this experience has provided me with a network which can help me get a new idea off the ground with early customers.

Together, these three things provide what I mentioned above: a fully digital product would be fun to build, a SaaS would provide me with valuable learnings for building a startup, and I felt like B2B would be a strong area for me to create value for customers.

Going through this process has made me feel like it will be hard to fail with a new startup which meets these criteria. Even if it never takes off, I will both enjoy and learn from the process of building it out.

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