The secret formula for finding and testing your big idea

3 min read

Struggling to find your big idea? It’s probably hiding in a whole stack of bad ones, says Netflix co-founder Marc Randolph.

“The idea for Netflix did not appear in some moment of anguish over a late fee for a movie,” Randolph says. “We were looking for that one idea and it was buried in a big pile of bad ideas.” Netflix was not Randolph’s first attempt at creating something people want and it was far from an overnight success. Through the constant process of innovation it became the most disruptive thing to hit the entertainment business since the invention of the television, toppling category leader Blockbuster in the process.

A key theme running through Randolph’s philosophy is that innovation is not the exclusive right of a select few. “It’s not only straight-A students or those with business degrees and specialist training that can achieve great things. It’s everybody,” he says. What you do need to succeed, however, is ideas. “Lots of ideas.”

The seed for what would become Netflix was born while Randolph and his partner Reed Hastings were carpooling. During their hour-long commute each day the two men would brainstorm ideas. Lots of them. Randolph would go into the office and research each one, then debrief with Hastings on the drive home. Hundreds of concepts were thrown out but they kept going.

How to find your big idea
So what techniques do Silicon Valley types use to brainstorm ideas? “One thing we might do is look at new technologies,” Randolph says. Look at tech such as mobile Big Data and the Internet of Things and ask, ‘How does that change an old-line business’. “We also look at current trends (healthcare, climate change, education) and new business models (collaborative consumption, marketplaces, and crowdsourcing) and see if we can apply new business models to old problems.” Randolph believes questions such as ‘why isn’t there?’, ‘why can’t we?’ or ‘why couldn’t I?’ surround us. If you can teach yourself to have these questions spring subconsciously and automatically into your head, then you start to see opportunity everywhere, every day. As Randolph highlights, “Ideas don’t spring out of thin air in some mythical Eureka moment. You have to be looking for them.”

Validation hacking
Once you have an idea, it needs to be tested. A simpler – and less expensive way to do this is through what Randolph calls validation hacking - the process of testing an idea without actually doing it. He cites the example of a US grocery delivery service. The founder was a young entrepreneur in his late 20s who believed an alcohol delivery mobile app could make a good potential venture. With limited capital, he didn’t have the luxury of actually building a version of the app to test it. He wanted to find out if it was a good idea without actually doing it, but how?

Testing your big idea
His solution was simple, he printed up business cards that said: ‘Need beer? Call me’. The young entrepreneur handed them out in a residential area within his demographic. He began taking orders - and discovered his idea was a bad one. Orders were small, the customers were drunk and the calls came in within a narrow window.  So was the test worth it? Absolutely. Randolph explains, “By colliding his idea with customers early, not only did he figure out it was a bad idea, with minimal time and money, more importantly, he began getting feedback about what would work.” Alcohol may not have had potential but food and groceries did. Eventually he learned enough to raise the money, build the app and then launch EasyFridge. He did all of this starting with just one idea - a low-tech business card. And that, Randolph says, is the true cleverness of innovation, “It comes from figuring out how to test things quickly, simply and cheaply.”

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