Tom Dekan

I’m currently in between projects, a minister without a portfolio. It’s been two weeks now, and I’m itching to dive into something new.

I don’t follow the “spray and pray” approach to startups. I think that you greatly increase your chances of success by being intentional about the problem you want to solve.

TLDR:
1. Coming up with business ideas requires disciplined thinking
2. Use a framework to reject startup ideas to increase your chance of success.

The work to find the idea

To identify the ideal next business venture, I must dedicate focused time in thinking about business ideas and planning my next project.

Active thinking means:
a) being away from the internet
b) alone
c) writing (can anyone really think without writing?²)

The success criteria is to come up with a shortlist of 2-3 promising ideas, and a plan for how I could start them.

Ideas require work

It’s untrue that great ideas simply pop into the mind passively. Inspiration does not strike without first being primed to think about a particular topic.

I need to engage in active thinking to generate great ideas. Concentrating on generating ideas, through writing, is the only reliable way to prime my mind to generate valuable insights subconsciously. This active work involves directing myself to think about particular problems alone; without internet; and in writing form.

After this initial thinking, related ideas will start flowing into me. The process is like directing a calm lake to form a flowing river. But it all starts with intentional thinking and effort.

Great ideas don’t come from nothing. Going for a walk in nature won’t produce any worthwhile ideas alone. Travelling to a new place won’t produce ideas alone (and can actually be very distracting as well as derailing your habits). I must first do the thinking work intentionally.

First test: The Dolphin test

Stage 1: The first test is to see if the idea passes a basic checklist.

This stage is a very fast filter to sift out ideas that are clearly not worth investing time into. I’m calling it the ‘Dolphin test’ because you are like a fisherman quickly checking that you haven’t caught any dolphins in your net.

I’d say that most bootstrapped founders are ensnared here, choosing to spend time producing a) something so phenomenally small (e.g, a carousel maker, or b) something that they’ve seen lots of other people making on twitter.

The process: Write a one-line response to each.

1. Big enough: the problem is worth spending my limited lifetime addressing
2. Interesting: I’m interested in the problem in itself
3. Fits me: I am well-suited to solve the problem, particularly more than other people
4. Profitable: There is a clear road to $10k profit / month for me
5. Fits the self-funded business model: The business must be feasible within the constraints of being self-funded.

Second test: The Anchovy test

Stage 2 involves doing the disciplined thinking of writing about your idea. Here, you are like a fisherman checking your net in detail to see whether you’ve caught an anchovy (which you want) or a different small fish (which you don’t want).

My process: Answer the 14 or so short questions here Bootstrapped Business - Anchovy test.

I wrote this for me based on my experience in selling my previous company and the excellent talk by Jason Cohen¹. This is a set of questions to guide my thought process.

Conclusion

If your idea passes this 2-stage framework, then congratulations! You are now guaranteed to have a successful high-revenue business.

Only joking. But, by applying this framework, you will reject ideas that are very likely not to achieve your aims. Applying this framework leaves you with ideas that are much more likely to succeed.