How to Come up with a Business Idea (Or How I Did It, Anyway)

Six weeks ago today, I finally decided to sit down and brainstorm ideas. I was quickly losing enthusiasm for the business I was working on at the time — the business I'd been running for years. Revenue growth was glacial, churn was high, competition was fierce, and I wasn't proud enough of what I'd built to promote it with real enthusiasm. Maybe, I thought, I'd be better off working on something new.

I opened up an old Google Doc that I've kept around forever called "Project Ideas". I wasn't surprised to find it devoid of anything that got me excited, so I'd already mentally prepared for Plan B: I'd scour the web and read about how other people were making money online. Perhaps after seeing hundreds of examples, it would be easier for me to come up with good ideas of my own.

My first and only stop was Hacker News. I knew that transparent discussions about the businesses people were building is a common occurrence on HN, and figured I could get all the examples I needed just by searching through the archives.

Passive Income Search on Hacker News

One of many similar searches I did on HN.

After two days and probably 8-12 hours of research, I'd added roughly 20 ideas to my list and refined a bunch of my old ideas, too. That really struck me as meaningful — my list had grown by 100% in roughly 2% of the time it's existed. Not only that, but my new ideas and refinements were much better than the old ones. My takeaway was that short but intense, focused, and purposeful brainstorming beats years of passively hoping for good ideas to materialize. 🤔

Four ideas really stood out to me. They weren't necessarily better than the rest, but they definitely got me more excited:

  1. Teaching people to code through gaming. Earlier in the year, I helped my brother build and launch Flexbox Defense, a tower defense game that helps web developers learn flexbox. Despite being a bit rough around the edges, it got hundreds of upvotes on HN and lots of love on Twitter, so I thought there was loads of potential for improvement and for other games as well.
  2. A web application for mock interviews. I've spent countless hours in the past few years helping some of my close friends learn to code. One thing I think anyone learning to code would benefit from is an app that replicates the exact experience of going through a phone interview.
  3. Some sort of application that would combine manpower with AI. I'd been captivated all year by the idea of using real people to help power software. For example, AI is not yet good enough to be a fully competent personal assistant that can manage your email and calendar. But with a little bit of help from a real live person, maybe it can. This is definitely a "solution in search of a problem", which is not a great way to start a business. Still, it was tugging on my heartstrings.
  4. A community site that would feature detailed info on profitable apps created by independent developers. I kept thinking about the very process I was going through. If I'm sitting here combing through HN threads looking for this info, others must be, too. The fact that tens of thousands of people had been upvoting and commenting on these stories for years was all the market validation I needed.

It's obvious now which one I settled on, but at the time it was very difficult to choose. I ended up making a list and examining each idea based on 7 factors:

  1. Do people need this?
  2. Can I personally do a good job marketing and distributing it?
  3. How hard will it be to avoid churn and keep retention high?
  4. Is it meaningful and beneficial to the world?
  5. How long will it take me to build an MVP?
  6. What kind of effort will it take to keep it running long-term?
  7. Can this idea actually generate revenue?

My goal here was to take a page out of Charlie Munger's playbook and figure out what to do by focusing on what not to do. The basic idea is to invert your thinking. Instead of asking "How do I succeed?" ask "How am I most likely to fail?" and then avoid those things. Most of the 7 questions above are directedly related to things that have caused me grief in the past. They're mistakes I want to avoid repeating.

I instantly eliminated the manpower + AI idea from consideration. It was far too vague and undeveloped for me to even answer half of the questions. Narrowing down the list of remaining ideas was much tougher. At first I was leaning heavily toward both teach-people-to-code ideas, partly because the platforms themselves seemed like a fun challenge to build. I'm a hacker at heart, and I love writing code.

But there was one thing I couldn't stop thinking about. It was one of the hundreds of businesses I came across while pouring through HN threads: Nomad List.

Nomad List Website

Nomad List: Best Cities to Live and Work Remotely for Digital Nomads

The story behind how Pieter Levels (@levelsio) started Nomad List is seriously great, and where he's taken it since then is even better. I just couldn't stop drawing parallels between the evolution of Nomad List and the things I planned to do if I went with idea #4 and built a community site.

On top of that, he's been open and transparent about his entire journey, and it's very inspirational. This was just one more piece of evidence that people might enjoy reading about hackers running profitable businesses.

After a few days of thinking, I crossed the other two ideas off my shortlist, and got to work coming up with a name and a plan for what would become Indie Hackers.

It's impossible to know how things will work out, and I totally might have made the wrong decision. Even if I didn't, I'll certainly make a few poor decisions at some point. And you'll have a front-row seat, because I plan to blog about every part of running and (hopefully) growing Indie Hackers. I hope you guys will tweet me your feedback and ideas along the way! 👻

The next post or two will cover how I built and designed Indie Hackers, got the initial interviews, and launched the site to nearly 200,000 pageviews in a weekend!

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