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Idea Generation 101: Full Guide

Idea Generation 101- Full Guide1

Idea generation passes through three periods:
1. It can’t be done.
2. It probably can be done, but it’s not worth doing.
3. I knew it was a good idea all along!

 Arthur C. Clarke

We are used to thinking of idea generation as of something that comes sporadically and unpredictably. And even after we’ve had that eureka moment, we rarely know what exact steps should be taken in order to bring this idea to life.

Fortunately, there are techniques that can turn idea generation into a systematic process and there are strategies and tips that will help you manage and execute the best concepts.

Idea Generation & Goal Setting

Setting a goal is a great place to start. After all, the execution of an idea has to lead to something and it’s up to you to ensure that you stay relevant and make positive change happen in your company. Moreover, 14% of individuals who have goals are ten times more successful than those who do not have a specific aim.

Do you want to improve efficiency? Make your product better? Attract a new audience?
When coming up with a goal, you can use the SMART method. You have higher chances of achieving the aim if it is Specific, Measurable, Achievable, Relevant, and Time-based.

How to set a SMART goal

According to Gail Matthews’ Goal Research Summary, to go the extra mile, you should write down your goals, sent your commitments to a friend (or a team), and make weekly progress reports to accomplish much more.

So, before continuing with any of our idea generation techniques, make sure to set and write down your goals.

Idea Generation Techniques

If you want the creative process to be effective, it should be collaborative. Try to involve different roles (from trainees to the CEO) and include team members from different departments.

Once you have gathered everyone together, you can check out the idea generation techniques listed below.

Creativity challenges

Recently we published an article about efficient creativity challenges that help teams to generate more creative and innovative ideas. Give at least one of these 4 Quick Creative Challenges a try.

Opposite thinking (reverse thinking)

Use this technique, if you feel like the team is stuck and finds it challenging to think outside of the box. The exercise might sound ridiculous, but this is exactly what will help get rid of limiting assumptions and get the creative process going.

Try to come up with ideas that are opposite to what you are actually looking for. For example, if you want to make your app more user-friendly, set a reverse goal and write down everything that will make it more difficult for the users to navigate the application (like highly specific terminology and a counterintuitive set-up panel).

Brainstorm cards

The Board of Innovation has come up with 52 cards that will help you generate useful and up-to-date ideas that consider new technologies and social trends.

Simply define your problem and then pick a card. You’ll have around 20 minutes to write down all the ideas that come to mind.

Card examples: ‘What if your product was designed to only be used once?’ ‘What if direct advertising was forbidden?’

Ask the client

If you are creating a product or service for your consumers, why not ask them directly what they’re looking for?
Customer co-creation is a widely used and effective technique. For example, in 2018, IKEA launched ‘IKEA co-creation’ – a platform that directly asks customers for idea suggestions and that collaborates with university students to find the best possible solutions. The Swedish giant also provides customers with prototype shops and labs that they can use to test their creations. Moreover, participants will get a cash reward, if their idea is implemented. 

Idea Screening & Validation

Now that you have a long list of ideas, how do you find out which ones will work and which ones should be dumped?

Ask questions according to chosen criteria that are relevant to your business

Criteria ExamplesQuestion ExamplesWhy It’s Important
Product benefitsHow many ways can a customer benefit from this product? Do the benefits help the target audience or another audience?63% of customers expect companies to know their expectations and unique needs.
AudienceIs there an audience growth potential? Will it help bring in a new audience while still serving the old one? Does the product meet the needs and wants of the target audience?Acquiring new customers is up to 25 times more expensive than retaining the existing ones.
While audience growth is great, focusing on existing customers is more cost-effective.
Market/IndustryIs the market for the product/service oversaturated or completely new?
Is there a need for this product/service?
How many direct competitors are there?
A saturated market shows that the market has a lot of opportunities. The key to success – is change.
While you’re still in the early stages of idea development, it is easier for you to make quick decisions and the necessary changes.
Manufacturing/developmentIs the manufacturing/development process quick and easy or complicated and slow?
How will the manufacturing costs affect the price point of the product/service?
Your speed-to-market will have a direct impact on the product’s/service’s success. It helps you be ahead of competitors and save plenty of resources.
ProfitabilityWhat are the possible areas of expenditure? How much profit will this item/service make?Try to figure out what your ideal profit margin should be. To measure the profit of one single product, for example, use the gross profit margin.
BrandingDoes the product/service comply with our brand’s identity?Companies that consistently take their brand’s identity into consideration, are 3.5 times more likely to receive strong brand visibility. Moreover, having a great brand brings down training and hiring expenses by up to 50%.
ImprovementCan this product/service be improved in the future?
What improvements can make it better?
How much would they cost? 
Existing products should be reviewed once new technologies or materials are available. Changes in consumer needs, in laws and regulations, and production costs will also lead to product revision and further improvement. 


The idea might not be worth pursuing if the audience benefit is low or non-existent, there are too many flaws that would require future investments, or if you won’t earn enough money from the product/service.

Quantitative research

Answering a few questions together with the team is certainly not enough. The ideas that have passed the first stage have to be validated once again. 

Quantitative research is a systematic investigation of your ideas. It is performed by collecting and analyzing quantifiable data to test hypotheses and find correlations.

Here are some analyses that you can perform.

SWOT analysis

SWOT analysis is one of the most popular types of product analysis out there. It stands for: 

  • STRENGTHS – the characteristics that give you advantages over the competitors. Use them to expand the market position. 
  • WEAKNESSES – the characteristics that make your business disadvantageous relative to competitors. Strive to remove them.
  • OPPORTUNITIES – elements in the external environment that let you formulate and implement strategies to increase profitability. Leverage them.
  • THREATS – elements in the external environment that might endanger the profitability and integrity of your business. Mitigate them.

The person identifies all features for each criteria. After writing down all the strengths, opportunities, weaknesses, and threats give every point a relative weight and then compare them (put the most important S’s and W’s against O’s and T’s).

Such a ‘confrontation matrix’ confronts your businesses’ strengths and weaknesses with the market’s opportunities and threats. Assess the effects and come up with a suitable marketing strategy (or find out that the idea is not viable after all).

Only you get to decide what total score is good enough.

PRO Tip: let every team member complete a confrontation matrix and then compare the results and discuss.

Example of a confrontation matrix

Market analysis

The needs and requirements of your target audience are constantly changing. New trends emerge on a regular basis and your company has to be able to keep up with all these changes.
Market analysis will help you gain a better understanding of what is in at the moment. Ideally, you would be able to find a gap between what is offered by your competitors and what the audience wants to receive. That is your chance to occupy the free niche.
Take a look at our step-by-step guide on performing an insightful competitive analysis.

PESTLE analysis

PESTLE stands for Political, Economic, Social, Technological, Legal, and Environmental circumstances.
It allows you to analyze the whole environment in which your product/service will be operating from different angles.
To go the extra mile, you can add another ‘E’ for Ethics.

FactorsDefinitionWhat they include
PoliticalHow the government intervenes in the economy.How the government can influence the economy.Fiscal policy, tax policies, trade tariffs, and so on.
EconomicRefer to the financial state of the economy. ARe connected with services, money, and goods.Foreign exchange rates, economic growth patterns, FDI, interest rates, inflation rate, etc.
SocialThe effects of people and groups influencing one another.Population analytics, demographics, cultural trends.
TechnologicalRefer to the ways new technologies and practices can affect businesses.Research and development, automation, innovations.
LegalRefer to the ways the law affects how customers behave and businesses operate.Labor laws, safety standards, consumer laws, etc.
EnvironmentalRefer to abiotic and biotic factors that influence living organisms.Environmental offsets, climate, geographical location, global changes in climates, and so on.
EthicalInclude all the actions that influence employee behavior inside the company with the outside environment (customers, competitors, partners).The factor that businesses can influence. Determine your ethical guidelines and follow them.

Rate every external factor. You can assess its impact over time (long-term or short-term), by type (positive or negative), and dynamics (will the factor’s importance increase over time?).

Rate the factor’s potential impact on the business (high or low) and the likelihood of such a scenario coming to life (high or low).

You can download a helpful worksheet here

Now, you should perform another SWOT analysis, as all these factors can result in both opportunities and threats.

These analyses will help you evaluate the idea from three different perspectives: your own company, the market, and the global environment.

Qualitative research

An easy way to screen and validate the ideas is by asking the actual users and consumers.

  • Reviews and testimonials
    Study the reviews of your products and your competitors’ products to gain more insight into what the audience thinks.
  • Surveys
    Surveys are great as they can be sent to a wide range of people. However, the response will be limited by the number of questions.
  • Focus groups
    Unlike surveys, the discussion in focus groups is not limited by a piece of paper. Even though you can bring together only a certain number of people, gaining different perspectives and thoughts on the new product/service in the form of a discussion can be useful.
  • In-depth interviews
    Such intensive individual interviews provide much more detailed information than surveys. There should be no more than 15 questions that will be guiding the interview. Customers, community members, and staff can become potential sources of information.
How to conduct an in-depth interview

How to Put an Idea into Production

Prepare a business plan with a realistic budget

1) Plan for “day one”. This includes the facilities’ cost (the cost of your business location), fixed assets (equipment, furniture, etc.), materials and supplies (don’t forget about advertising materials), and other costs (like salaries, licenses, permits, and so on).

2) List your monthly fixed expenses. The most common examples include rent, phones, credit card processing, employee pay, advertisement, and the website service fee.

3) Add variable expenses – production costs, raw materials, commissions on sales. Service businesses usually include fewer variable expenses.

4) Estimate monthly sales. You might want to do three different options: the worst-case scenario, the best-case scenario, and something in-between (the likely scenario).
If you are making products – determine a breakeven point.

5) Create a cash flow statement. How much money will be going in and out of your business after the implementation of this idea?

Produce a prototype (MVP)

No matter how genius you think your idea is, you can’t dive right into the actual product development stage. Sometimes, it might be enough to create a prototype or an MVP to figure out if the idea is going to work or not.

A prototype puts your idea into something tangible. It helps you communicate more effectively with the engineering and design teams. The prototype might be digital or even a paper sketch.

The essence of MVP

An MVP, in its turn, is a Minimum Viable Product – the simplest version of your idea that still manages to solve the problems of the customers/users. An MVP helps you get user feedback, find your ultimate product-market fit, and start building anticipation around the upcoming launch.
Airbnb, for example, started as a very basic website (AirBed&Breakfast). It helped people that came to San Francisco for a design conference find places where they could stay. The website had to solve the problem of the high cost of short-term rentals by providing people with alternative accommodations. And that’s what it keeps on doing to this day.

Now that you have your business plan and MVP ready, you can put it to the test.

How to Test Your Idea

  • Focus groups
    Focus groups are, once again, an amazing way to test your idea and gather valuable feedback from the target audience.
    Don’t forget to state your goals, find focus group members (between 8 and 10), develop a script with the questions, and find a professional moderator to lead the conversation,
  • A/B testing
    This is a method of comparing two versions of your product to find out which one performs better. You would want to split the consumer traffic randomly between the two variations and collect data about the product’s performance. Then simply compare the numbers and pick the idea that performed best.
  • The Wizard of Oz role-playing
    This methodology is usually used in lean programming and software development. Every ‘round’ helps improve the next development stage. The cycle can be repeated until the development is completed.
    All you need is a script and two people. One will be playing the role of the end user (who may or may not know that they are playing a role) and the ‘wizard’. The latter will be testing how the user might interact with the product.
  • Soft launch
    A soft launch is a ‘rehearsal’ of the global launch. It is your chance to collect more data and fix any bugs. We have discussed all the steps of a soft launch in this article.
  • Crowdfunding platforms
    We are used to thinking of crowdfunding platforms as a way of raising money. However, this can also become an amazing opportunity to test and validate your idea. Here, you would have to focus on the key concept of the idea and on the right way to promote your product.
    Present the prototypes to the audience and see what they think. You will certainly gain valuable feedback, even if the idea fails. But you might end up receiving all the necessary funding, so crowdfunding is definitely worth a try.

What’s Next?

If you are satisfied with the results of these tests, you are finally ready to turn your idea into a real product/service (the more complicated part).
These are the examples of only a few other stages that you would have to go through.

  • Finding people that will invest in your idea
  • Finding new team members 
  • Preparing for launch
  • Launching your product or service
  • Promoting your business
  • Adapting and improving

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Helpful Idea Management Software

To help make sure that you don’t get overwhelmed by the number of ideas coming your way, we have come up with a list of helpful idea management software.

  1. Ideanote – makes it easy to collect, develop, and act on the best ideas.
  2. Coda – features pages with infinite depth, buttons that take action inside or outside the doc, and tables that talk to each other.
  3. Miro – helps you build and develop ideas with the team as if you were in the same room.
  4. Perfomante’s Collaborative Teamwork – take the video ad creation process to a new level. Distribute the workload and allocate team resources more efficiently.


Now you are familiar with every stage of the idea development process, starting from the generation and ending with testing and production.

Every fifth small business fails within the first year. By the end of the 5th year, about 50% of businesses would have failed.

The most common reasons for failure include:

  • Lack of funding
  • Inadequate management
  • Ineffective business planning
  • Unsuccessful marketing initiatives

No idea is perfect from the very beginning. Bringing a eureka moment to a working concept is a long and tiring process. Performing all the tests mentioned above will help you avoid at least a few common reasons for failure. In any case, all these analyses and surveys are a great place to start.

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