How to select a great business idea

I believe founders encounter two types of business ideas:

#1- to address their own problem or passion

#2- to find solution for a problem of a group of consumers

Ideas #1 are easy to come up with, but more difficult to turn into a successful product. They often have business-oriented approach (to make money). Lots of founders and startups failed building products with little use cases at a great expense to investors (aka vaporware).

The main issues here are misdirected motivation and strong emotional attachment that rush to build/invest in a product without checking it by consumers first.

I had my share of learning through mistakes. Once I thought I got a great idea to sell an existing building product in another market segment (to beat the competition). I was so sure I didn't test it with the target consumers first. It was a big failure, and financial and emotional distress that took me few years to get over.

Idea #2 is usually harder to just come up with. It has to be discovered like a revelation or a golden nugget in a river bed. It comes as a surprise realization or unintended consequence of unrelated activity. Solution usually is not motivated by money, but by genuine interest in solving the problem.

I was lucky to stumble upon such business idea in a narrow outdoor sport market segment that was underserved and easy to market to. I've been doing well untill it got crowded with competitors.

These are the most exciting ideas to work on in my opinion. They provide a strong vision and mission, and motivate everyone involved to do their best.

Once the solution part is figured out and product is tested and launched, then it can be wrapped in a business shell.

The culture of such startup company would go above and beyond standard business requirements and seek to serve customers beyond their expectations.

To summarize, the best business idea ironically does not come from the business perspective side, but from a human experience side.

Have you had an idea like that?