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Eureka!

David Langer, a young entrepreneur, considers the challenge of coming up with winning ideas - and what to do when you have one

en·tre·pre·neur |.äntrəprənoŏr; -nər|

(noun): a person who organizes and manages any enterprise, esp. a business, usually with considerable initiative and risk.

Look for things that are evil, broken or stupid - these are usually great opportunities. Not my words, but Paul Graham's, the co-founder of Viaweb (now known as Yahoo! Store!) and Y Combinator. He was speaking at a recent conference I attended.

The point he was making is that there are essentially three main ways to come up with an idea.

First, is to copy someone else. A good example of this is German social network StudiVZ, launched in October 2005 by students at Humboldt University in Berlin. Essentially they cloned Facebook, dyed it red and translated it into German. Then in January 2007, shortly after rumours of a lawsuit coming from Facebook, the company was acquired for $112M by German media company Holtzbrinck.

Second, make an old one better. Look at Facebook. It certainly wasn't the first social network. MySpace (founded in 1999), Friendster (founded in 2002) and various other sites were already up-and-running before Facebook launched. However, they took an existing concept (a social network) and improved upon it. By initially restricting access to students at a particular university, introducing 'poking' and later on the 'News Feed', Facebook has had great success.

Third, solve real problems. This is my personal favourite - and it's the way Andy Young (co-founder of my businesses, GroupSpaces and ClickUni) and I came up with our ideas. With GroupSpaces, our initial idea was borne out of there being hundreds of clubs and societies at most universities - many of which were holding exciting events. However, in our experience, it was very difficult to find out about them after the Freshers' Fair at the beginning of each academic year. Therefore, we were going to create a website which would centralise all the news and events from these clubs and societies.

I've got an idea, what next?

Having an idea doesn't mean you have to be able to write out a 30-page business plan for it, covering your prospective company's first four years of activity. For example, initially the business plan could be as simple as "We're going to create something that makes it easier for students to get a graduate job".

The reason is, many businesses started up as one idea and ended up as something different. Paypal is a case in point. In 1998, founders Peter Thiel and Max Levchin originally intended to build a wallet application for the Palm Pilot that would allow its users to securely beam money back and forth. What they found though was that people were actually trying to use the website to send money instead of downloading the Palm application. Hundreds of people were flocking from eBay mistakenly thinking that this was a web-based method of making a financial transaction with a stranger. With only a handful of people actually using the Palm application they had an epiphany that they were building the wrong thing. So they got their heads down to build what the eBay customers were asking for and a year later essentially had the service that is available now. After they were acquired by eBay on 3rd October 2002 for $1.5bn I doubt they were regretting their change in direction. So be prepared to let your idea evolve.

At some point, you will have to focus on one stage your idea's evolution. You will need to work out what product or service you're going to provide. So having thought of some possibilities, do your homework.

Run your idea by potential customers - ask them to be honest and tell you whether or not they would buy your offering, and if not ask why not; research the market - work out who the competition is and how you will be better; and doing the maths - work out how you will make money and see whether you can undercut your rivals.

David Langer the CEO of GroupSpaces.

david@groupspaces.com

www.davidlanger.co.uk

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