Ever since the ancient Greek polymath Archimedes burdened posterity with the legend of the ‘eureka’ discovery, we have come to think that innovation originates in a blinding flash of insight. Not so fast, says Jeff Skinner – ideas for new ventures come in many forms, and often owe as much to determination as inspiration…

A few months ago I was asked to give a talk entitled ‘Where do new venture ideas come from?’ to a group of students who liked the idea of creating a business but didn’t have a specific idea to develop.

I accepted the assignment – then realised that I didn’t know the answer. My own experience is in science-based ventures where, as often as not, it’s a case of a technology product in search of a ‘killer application’. Not much help to those starting from scratch…

But it was too late to pull out of the talk, so I fell back on the second line of defence – learned texts on the topic of new venture ideas – with frameworks and tools to be assimilated and synthesised into a coherent story of my own. After consulting with colleagues, I zeroed in on four books by great academic thinkers.

The textbook approach

The first was Karl Ulrich’s ‘Innovation Tournaments: Creating and Selecting Exceptional Opportunities’ – a fabulous tome, mostly aimed at corporate innovators. My guess is that, while running workshops for that audience, he discovered that they struggled to generate new venture ideas, so he added a helpful chapter suggesting a few sure-fire ways of generating opportunities in a hurry, including ‘annoyance-driven innovation’ and ‘de-commoditising a commodity’ – or vice versa.

The next book – ‘Why Not? How to Use Everyday Ingenuity to Solve Problems Big and Small’ by Barry Nalebuff and Ian Ayres – was a little less mechanistic in its approach, suggesting four ways of thinking ‘outside the box’ to find identify new angles in familiar sectors. Ask yourself, ‘What would Croesus do?’, then think how you could make the same service available to the great unwashed.

Next came Steven Johnson’s ‘Where Good Ideas Come From: The Natural History of Innovation’. Now, I should say that this is one of my favourite books of all time; my cherished copy well-worn and inscribed with enthusiastic handwritten comments, highlighter pen and post-it notes. Steve takes an entirely different approach to the question. Whereas the first two texts suggest that ideas result from a ‘lightbulb moment’, he introduces the concept of the ‘slow hunch’; proposing that many ideas mature and ‘gather moss’ slowly over time, each new insight adding to the richness of the idea and becoming more compelling along the way. He suggests a number of tactics for increasing the speed and likelihood of new insights, including keeping a ‘commonplace book’ (popular in the Renaissance), immersing yourself in ‘liquid networks’, and fishing in the ‘adjacent possible’. In so doing, he puts ‘entrepreneurial thinking’ centre stage, great ideas forming – perhaps over many years – in the minds of those determined to find them.

The art of the possible

Last (but by no means least), there is Saras Sarasvathy’s ‘Effectuation: Elements of Entrepreneurial Expertise’, which introduces the concept of ‘effectuation’. Saras suggests that new venture ideas are an amalgam of a would-be entrepreneur’s expertise and enthusiasms (on the one hand) and viable opportunities on the other. It’s the art of the possible. Got lemons? Know someone who can mash them? Can you afford some plastic cups? Then set up a lemonade stall.

I’ve probably reduced the thinking underlying these four theses woefully – but that’s how it seems to me. The problem is that all four treatments sound theoretical. I began to test out these ideas with some ventures familiar to me, hoping to find resonance with one paradigm or another.

The dichotomy that intrigued me most was the ‘lightbulb moment’ vs the ‘slow hunch’; not least because this relates directly to so many entrepreneurship programmes, many of which kick off with ‘ideation workshops’ that assume the lightbulb. What if the ‘ideas-in-a hurry’ approach is specious, and the best ideas in fact form in the inquisitive but prepared mind, one insight and one observation at a time? How then should we mentor nascent entrepreneurs? Can we even mentor them at all?

From the horse’s mouth

Still lacking something definitive to say on the matter, I resorted to the next repository of knowledge, the entrepreneurs themselves – not so much the successful ones who had probably forgotten or rewritten their origins (as the late bandleader and radio presenter Humphrey Littleton once said, “Most memory is fiction”); rather, those who could remember them and – if the slow hunch was right – would still be evolving their new venture ideas.

Happily, the School has an incubator and I have the email addresses of past and current occupants. Simply a matter of phrasing the question, then. Here’s what I asked them:

I would love to know how you came up with your venture idea. Was it:

• A new technology in search of an application?
• A personal frustration or need?
• A market gap you could fill?
• An inefficiency you’ve spotted?
• A sector that intrigued you so deeply that you searched for a product?
• A service that morphed into a product?
• You saw an existing venture and realised you could do it better?
• You saw a business in the US (for example) and decided to replicate it in the UK?
• Did you apply an interesting business model to a different sector?
• Something you dreamed up at a hackathon or in a pub with friends?

The wonderful thing about our founders is that they love to share their experiences. The responses came in thick and fast. Here are a few:

• The original idea was born out the combination of my frustration with…
• Personal frustration, market failure and gap … I run every morning and that’s when I’m most creative. 
• Emerged from a very personal problem – my inability to remember the people I met while networking.
• I always knew I wanted to be my own boss but didn’t have an idea. A mentor advised, “Write one idea a day, no matter how bad it is.” I started doing that, focusing on what pains I saw … rewired my brain … and started seeing a lot more opportunities. Of course, most of them were bad.
• I was searching for something. I was disillusioned at working for others in large corporations.
• Mine was a mix of inspiration, getting immersed, applying logic learnt in a previous job to this one, and consumer/investor feedback.
• For me, it’s been a mix. I agree that it could take a long time (even years) to refine a crude idea, including subconsciously.
• The idea came from seeing a similar system at a sailing event in France. It was revolutionary … saw no similar solutions in the UK, so I found an opportunity. I refined the idea by adding data analytics to be monetised … it took four months. 
• I had the idea of being able to negotiate on an eCommerce platform, but I was convinced it could not be done … then I did the LBS ‘Creativity in Business’ module … I used my final assignment to solve the negotiation issue using analogy … at the same time, I was in Turkey buying some sneakers in the bazaar and enjoyed the process, which was cheeky and fun … [hence the idea to] ‘replicate the bazaar’.
• I’ve always been fascinated by ‘side hustles’ and seeing ordinary people make unusual profits from new, small side businesses … the mental model I use is, you either do the same thing at scale or become the infrastructure to enable it. 
• The genesis fits the profile of an idea that formed gradually over many years.

Seek and ye shall find

Make what you will of these responses (that’s the nature of anecdotal experience); my takeaways are:

• The entrepreneurial journey does feature lightbulbs, but often in the form of many little ones (insights resulting in pivots), rather than a big bang.
• Lightbulbs more often appear in the ‘problem domain’, followed by a long series of slow hunches that eventually result in product-market fit.
• For many, the starting point is the fun of the ‘side hustle’ resulting in the search for an idea; at which point the world becomes a sea of opportunities.
• Courses, hackathons and workshops can set you thinking – and even create lasting teams – but the real impact comes from the desire to recreate the same buzz with a real venture.
• Don’t be the ‘greedy reductionist’. New venture ideas ‘happen’ in many different ways. All are legitimate.

What did I end up teaching? Well, I pretty much took the students through the thinking I’ve taken you through here. Ask the question and hope it resonates. Summarise the conclusions of those who have pored over the conundrum, giving a framework along with the reassurance that they’re not alone in being mystified. Then feed them anecdotes – a few choice examples of the messy, non-lightbulb way in which venture ideas really come about.

In an ideal world, there would be some wonderfully rigorous, hypothesis-driven research on the topic, but that will have to wait.

In the meantime, seek and ye shall find. Maybe not quickly or cleanly. And certainly not without effort and curiosity. But, once you start seeing the world through an entrepreneurial lens, ideas will come. As the great French scientist, Louis Pasteur observed,

Chance favours the prepared mind, and opportunity favours the bold.

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About the author: Jeff Skinner is the Executive Director of the Institute of Innovation and Entrepreneurship at LBS. He teaches on several entrepreneurship courses at the School and leads many of the co-curricular activities supported by the Institute.