What Makes a Good Idea

Everyone has an idea for something. Whether it is to create a new app or a new business. You’ve probably heard that ideas are a dime a dozen. This saying implies that ideas are quite plentiful and easy to come by. What really turns ideas into something magical and impactful is the execution, which turns that potential (the idea) into a tangible reality. That being said, ideas are still an important part of the process because they are the starting point of the journey.

📺 Watch the following video to learn what makes a good idea.

As mentioned in the video, for your ideas to have an impact, they must create value. What does this mean?

There are two ways:

  1. Solve a real problem (i.e., solve a pain)
  2. Help people do something that they like (i.e., create a gain)

Here are two examples of what this looks like when translated into a product idea:

Health and Fitness

Pain-solving idea: Personalized Weight Loss Program

This idea aims to solve the pain of individuals struggling with weight management and related health issues. It could involve creating a personalized weight loss program tailored to an individual's specific needs, incorporating elements like diet plans, exercise routines, and behavioral counseling. The focus here is on addressing the pain points associated with effectively planning and committing to a weight loss program.

Gain-creating idea: Creating a New Social Sport (e.g., Pickleball)

This idea focuses on creating a gain by helping people enjoy the process of staying fit by engaging in a new social sport. Pickleball provides individuals with a fun and accessible way to engage in physical activity, promoting cardiovascular health, improving coordination, and enhancing overall fitness levels. Moreover, the social nature of pickleball encourages interaction and camaraderie among players, fostering friendships, community engagement, and a sense of belonging.

Where do great business ideas come from?

📺 Watch the following video to learn about where great start-up ideas come from.

Here are three key points from the video:

  1. Timing is important.
  2. Other people might think the idea is bad, too obvious, or too difficult.
  3. Market size is big.

Case Study - Piggyvest

Let's take the example of Piggyvest, a Nigerian fintech company.

Piggyvest is a significant online savings and investment platform in Nigeria, with a user base exceeding 4 million individuals. It has become a leading app for saving and investing in the country, offering personal savings with attractive interest rates and a network for investing in lucrative business opportunities.

The idea for Piggyvest was sparked by a viral tweet on December 31, 2015, where someone shared their experience of saving ₦1,000 daily in a traditional piggy bank (kolo) throughout the year. Inspired by this, the founders saw an opportunity to digitize and improve this saving method. They aimed to create a platform that allowed users to save money automatically on a daily, weekly, or monthly basis, with the option to withdraw their savings after three months, along with some interest. This concept quickly evolved from a simple idea into a detailed product, thanks to the team's previous experiences with startups and their ability to execute quickly. The first version of the product was developed in just three days, leading to the launch of Piggyvest, initially known as Piggybank.ng​​.

Piggyvest was officially launched on January 7, 2016, as West Africa's first online savings and investment app, starting solely as a savings platform. After three years of focusing on savings, the platform rebranded to Piggyvest in April 2019 and began offering direct investment opportunities to its users. This expansion was part of their mission to empower everyone to better manage and grow their finances.

Throughout its development, Piggyvest has been marked by significant milestones, such as joining the Village Capital accelerator in 2017, which led to their first major funding. The program's unique model allowed Piggyvest to be one of the two companies selected for funding by the other participating companies, providing them with their initial $50,000. This funding was crucial in helping them figure out how to monetize their platform and achieve their first revenue. The journey from there involved learning from customer feedback, overcoming challenges related to trust in a new digital saving method, and achieving rapid user growth through strategic partnerships and continuous innovation.

Since its inception in 2016, Piggyvest has disbursed over ₦1.1 trillion (USD 1.42 billion) to its customers. In 2022 alone, it paid out more than ₦400 billion (USD 519 million), reflecting only a fraction of the money saved with Piggyvest, indicating the high level of trust and liquidity within the platform. The company is moving into a "money management phase," planning to offer credit services in Nigeria by leveraging its licenses from the SEC, the Central Bank of Nigeria, and as a microfinance bank.

In a significant development, Flutterwave, Africa's most valuable startup, invested in Piggytech, Piggyvest's parent company, in 2023. The investment, rumored to be around USD 3 million, is structured as a SAFE (Simple Agreement for Future Equity), allowing Flutterwave to receive equity in a future funding round. This move is part of PiggyVest's broader push to raise external funding, aiming to deepen its relationship with Flutterwave while continuing with its investment round.

The Fallacy of the “Good Idea”

We have spent this lesson discussing the importance of the idea as a starting point for the entrepreneurial journey. However, it is critical not to fall prey to the misconception that having a good or innovative idea is sufficient for business success. It is easy to fall into this trap by focusing heavily on the novelty or perceived brilliance of your idea while neglecting other critical aspects of business development, such as:

Execution: The ability to implement the idea effectively, which includes planning, resource allocation, and managing operations.

Market Demand: Whether there is a genuine need or desire for the product or service in the market.

Business Model: The strategy for generating revenue and ensuring the venture is financially sustainable.

Customer Understanding: Deep insights into the target customer base, their needs, preferences, and behaviors.

Adaptability: The capacity to pivot or adjust the business model in response to feedback, market changes, or unforeseen challenges.

Team and Leadership: The strength and compatibility of the team leading the venture and their ability to inspire, manage, and make strategic decisions.

📺 Watch the following video to learn more about the fallacy of the "good idea."