Having multiple streams of income is an important part of living the Leverage Lifestyle, but too many people looking to start a business ask the wrong questions.
They try to come up with some crazy niche market that nobody’s serving yet because they believe that’s what it’s going to take to be successful. Or they try to enter a market they know nothing about, instead of figuring out what they already enjoy that people are willing to pay for.
Instead, work backwards.
Let’s start with what do you already know. Ask yourself the following questions:
- What are you already good at today?
- What industry do you already know intimately well?
- If you were going to start a podcast tomorrow (with no requirement to earn money from it), what would be potential topics that you feel interest you enough and that you have enough knowledge on that you could start talking for hours a day about said subject?
- If you HAD to make $10k by tomorrow, what knowledge, skill, or information do you hold that could be leveraged into getting someone to pay you for it right now?
It’s not that trying to find a market that’s ripe won’t work, because it clearly can. But that’s unnecessarily harder than finding something that has an existing market that you already know well and can execute on.
Do what you know. Don’t pursue endeavors you don’t understand because “there’s money in it.” That’s a sucker’s game. There are billions in banking and trillions in oil. I don’t know these things, so I do what I know. There is opportunity everywhere in everything; it doesn’t mean it’s for you.
Nine times out of ten it’s not the idea that’s the key to success. It’s the execution.
People start businesses all the time in existing markets with plenty of competitors, and they succeed because of their execution. So you don’t need a super unique idea to start a business; you just need a market and you need to execute well, preferably better than the existing competition.
What are people willing to pay for?
Once you’ve identified an area congruent with your skills or interests, you need to figure out who your audience is and figure out what they want. It isn’t about you; it’s about them.
If you can identify someone’s pain point and find a way to solve it, you have an idea for launching a business. Discover a pain people have and solve it—that’s how you make money. Make yourself indispensable to people who are making money and you will get it.
Let’s take a look at some of the greatest industrial innovations and businesses that were created to solve contemporary problems:
- The canning process came about from the need for food on the front lines in wartime.
- The freeze-drying process was invented to prevent spoilage and became popular with the advent of the home refrigerator.
- The home refrigerator itself also came into prominence by solving people’s needs for convenient, storable groceries.
One strategy you can run with is to choose an industry you know a lot about, interview a bunch of businesses in that industry to find out what pain point they have that they’re willing to pay to solve, come up with a Software as a Service solution (some website or software you’d create to solve their problem that they’d happily pay $X/mo), present the solution to them and presell it and get deposits like Tesla did with their consumers, use that money to build the software, then launch to them, and acquire more customers.
In short: Business is about leveraging your strengths to solve people’s problems.