How do you come up with a business idea?
Aspiring entrepreneurs often get stuck in the business idea phase — that is, they’re confident they could run a killer business, make a ton of money, and live the good life — if they could only come up with the right idea.
If that’s you — the idea seeker — I’ve got good news for you: coming up with new business ideas is actually pretty easy.
It’s what comes next that’s hard!
But today, let’s go through some of the proven methods you can use to come up with your first (or next) business idea.
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1. The Rip, Pivot, and Jam Method
I first heard of this method from one of my favorite podcasts, the Tropical MBA show.
Here’s how it works:
- you look at another successful business, and copy their business model (rip) …
- but apply it to a new industry or vertical (pivot) …
- and then hustle like crazy to get customers (jam).
We saw a couple of examples of this in the last year, including Sarah McAffry’s clothing consignment business in Ep 640.
After making $800 selling her kids’ clothes at an event, she realized there were plenty of kids’ consignment events but almost none for adults. She now earns $10K+ per event.
Another great example comes from Chris Andrews in Ep 632. He ripped the concept of food tours he’d seen in Savannah, Georgia, and pivoted it to Mobile, Alabama.
While food tours were common in major tourist cities, nobody was doing it in Mobile with its 300 years of history and rich food scene.
I even used this method myself — I found a wine club directory and review site, and pivoted that model to create my virtual assistant directory. I literally used the same website theme at first, just swapping out the content for the VA industry.
It’s about finding what works in one market and thoughtfully adapting it to another.
2. The Sniper Method
Some businesses are like shotguns and others are like sniper rifles.
Let me explain.
When you fire a shotgun, it sprays out a wide net of ammunition. In contrast, a sniper rifle fires a single deadly projectile.
Both weapons have their time and place, but for entrepreneurs just starting out, it makes more sense to think like a sniper.
For example, Carter Osborne initially offered tutoring services for a broad range of subjects—everything from SAT prep to precalculus, history, and English.
But he eventually realized that his passion and skill lay in helping students craft compelling college essays, and he positioned himself as the go-to college essay specialist in his area but also grew his business into a $100k side hustle.
Similarly, Kate Johnson took a generalist approach early in her bookkeeping business before narrowing her focus to clients who used FreshBooks accounting software, she simplified her operations and grew her business simultaneously.
I used The Sniper Method when I was building my first official side hustle, a comparison shopping site for footwear.
There were dozens of other comparison shopping sites out there, like NexTag, PriceGrabber, and Shopping.com, but they all were shotguns. They tried to include every product under the sun, and as a result, left opportunity for a sniper like me.
(It’s purely coincidental my site was eventually called ShoeSniper.com.)
I reasoned that by focusing solely (pun intended) on shoes, I could deliver more accurate search results, negotiate exclusive deals, and appear more relevant to customers.
3. The Shovels in the Gold Rush Method
Perhaps you’ve heard the advice, “In a gold rush, sell shovels.” The phrase comes from Sam Brannan, allegedly California’s first millionaire, who brought news of gold to San Francisco.
But before he made his announcement, Brannan bought up all the picks and shovels in the city, so he could resell them to hopeful prospectors.
And even though this happened more than 150 years ago, gold rushes still happen all the time. We’re just not looking for literal gold in the ground anymore; we’re looking for it in the form of the latest trend or hot fad.
In online business, I’ve seen gold rushes around ebay, niche sites, self-publishing, t-shirts, Amazon FBA, and more. And every time, some of the best businesses to come out of these rushes are the supporting services.
For instance, a ton of businesses have been built exclusively to serve Amazon FBA sellers. These are product research services like Jungle Scout, inventory management tools like Inventory Lab, and price scanning tools like Profit Bandit.
So to use the Shovels in the Gold Rush method, you just need to find a gold rush to support. Maybe that’s Airbnb hosts, maybe it’s Crossfit “box” owners, maybe it’s people getting into the latest network marketing trend.
Think of what common problems they have? Or, if you’re in the gold rush yourself, what problems do you have?
For example, Liz Wilcox took the trend of online newsletters and built a simple $9/month membership model around that. Her service provides weekly newsletter template inspiration.
It tapped into the growing demand for email marketing solutions as more and more people started sending newsletters.
Devyn Ricks capitalized on the general rise in demand for virtual, interactive classes — a gold rush in itself — and built a side hustle teaching video game sessions and social hour activities for kids in a safe, monitored environment.
4. The Intersection Method
The Intersection method aims to find potential service business ideas at the intersection of:
- Your skills
- Your interests
- Your network
For example, I started a freelance book editing business using this exact method:
- I thought I was a decent writer and a decent proofreader (hey, I was an A-student in English), even though I’d never been paid for it.
- I was interested in reading non-fiction (specifically business) books, and had even written a handful myself.
- I was in Facebook groups with other self-published authors.
It worked well and was a fun little side hustle experiment. I read some great (and some not-so-great) books and earned some extra cash.
One cool example came from David Paxton, who combined his passion for golf, skills in sourcing deals, and engagement in a popular golf subreddit to launch Daily Golf Steals and earned $2k in his first month.
Scott Adams, the creator of Dilbert, described a similar approach by combining his slightly above-average skills in cartooning and humor to create a successful comic strip.
Even the popular author James Clear combined his 90th-percentile writing skills with equally strong marketing expertise to produce “Atomic Habits,” a book that has sold over 20 million copies worldwide.
Lastly, Kristi DaSilva found success by focusing on ClickUp and HoneyBook systems, using her organizational skills to become one of the first certified pros.
To play around with this concept, get out a piece of paper and make 3 columns.
In the first, list your skills.
It might help to refer to your resume for this one. For instance, I’d put down experience from my past jobs like ski instructor, shelving books, painting houses, and inside sales, plus some of what I’ve learned on the side like WordPress, SEO, and podcasting.
In the second column, list your interests outside of work.
What do you enjoy doing? For me this column would include items like playing softball, skiing, traveling, learning, or even parenting.
In the last column, list out the who you know, or rather the types of people you know.
I don’t mean listing out everyone by name, but look for common threads on where they work and what they do.
Today, my network includes a lot of bloggers, podcasters, authors, freelancers, and ecommerce sellers, but I could also include engineers (my wife’s coworkers), photographers, parents, and car dealers (from my old job).
Next, you can play the matchmaking game to see if there might be an intersection to combine items from the 3 columns into a potential business idea.
Note: You can actually substitute a platform like Fiverr for your network if you don’t have any connections with potential clients. This is what Kendell Rizzo did when she combined her skill of copywriting with her interest in crowdfunding to create a lucrative side hustle ($100k in profit in 18 months).
5. The Scratch Your Own Itch Method
Solve your own problem, the saying goes, because other people are probably facing the same issue.
This one is easy. For the rest of the day, just keep a mental note of all the things that frustrate you, that you spend money to solve, or that you wish you didn’t have to deal with.
All of those are potential business ideas.
Lou Rice, a new mom, needed a hands-free way to hold her Kindle during late-night feeds. After dropping it on her baby’s head, her husband crafted a silicone strap.
Realizing nothing like it existed, they launched a stylish version now earning $50k a month.
Garr Russell turned his unused RV into a rental business after a disastrous family camping trip. A Craigslist listing brought instant inquiries, changing his problem into a six-figure business.
6. The Expert Enough Method
What do your friends, family, and peers ask you for help with?
Are you the go-to person in your circle for tech support, photography, handyman work, accounting, BBQ technique, travel planning, or something else?
If people are asking for your help, they think you’re Expert Enough. (Now they might not be willing to pay for you advice, but that doesn’t mean others won’t.)
Hugo Ortega turned his experience as yacht crew into a resource for aspiring “yachties.” He packaged his knowledge about getting started in the industry into an online course, helping others navigate this niche career path.
Harry Duran built a podcast about vertical farming without prior expertise. He simply followed his curiosity, interviewed industry leaders, and landed sponsorship deals — even before releasing an episode.
7. The Probing for Pain Method
The Probing for Pain method can be incredibly profitable if you know how to ask the right questions.
How this generally works is calling up a business owner — could be someone you have a previous relationship with or someone you’ve never met — and asking questions like:
- Tell me a little about your business?
- What’s the biggest challenge facing your industry over the next 5 years?
- What does a typical day look like for you?
- What’s the most frustrating or time-consuming part of your business?
What you’re trying to do is uncover an expensive problem, as Jonathan Stark would call it.
John Logar is the master at this. Maybe it’s the friendly Australian accent, but he has a gift of getting people talking.
In my conversation with John, he broke down how he pre-sold $120k worth of software (that didn’t even exist yet!) starting with no list and no ideas — using only the Probing for Pain method.
How to Come Up With Business Ideas: Your Turn
Which of these business idea generating methods could you use?
Hopefully this post has your gears turning!
Let me know your favorite in the comments below.
Want more? Here are some of my favorite business ideas for kids (and grown-ups too).
Episode Links
- The Tropical MBA show
- Ep 640 with Sarah McAffry
- Ep 632 with Chris Andrews
- Ep 601 with Carter Osborne
- Ep 386 with Kate Johnson
- Ep 600 with Liz Wilcox
- Ep 611 with Devyn Ricks
- Ep 583 with David Paxton
- Ep 627 with Kristi DaSilva
- Ep 589 with Lou Rice
- Ep 625 with Garr Russell
- Ep 602 with Hugo Ortega
- Ep 586 with Harry Duran
- Ep 154 with Jonathan Stark
- Ep 126 with John Logar
- FreshBooks accounting software
- ShoeSniper.com
- Ebay
- Niche sites
- Self-publishing
- T-shirts
- Amazon FBA
- Jungle Scout
- Inventory Lab
- Profit Bandit
- Service business
- Books I’ve Written
- Daily Golf Steals
- Dilbert by Scott Adams
- Atomic Habits
- Fiverr
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