What's the Big Idea?

We had to do some brainstorming for one of our courses today. It was a good exercise because it's not that often that you get a group of smart people together and devote 1.5 hours solely to brainstorming startup ideas. No idea was too small or weird to discuss, so we went through everything from improving nail salons to bike ordering to online dating to social networks to men's socks.

I usually think of 2 ways to find startup ideas: thinking of problems and how to solve them, and thinking of great business models and how to apply them in new ways. In the first you find problems in your life or the lives of others and think of ways to solve them (say, it's annoying to buy socks all the time, why not subscription socks?), and in the second you apply great business models in new ways (birchbox is a great model, what about a birchbox for kids' toys?)

What I'd be interested to know is, where do entrepreneurs usually come up with ideas typically? Is it through methodically thinking through problems and how to solve them? Is it taking inspiration for great ideas and applying them elsewhere? Is there a process to coming up with great startup ideas, or is it usually more pure inspiration and luck?

The No-work, No-risk startup

Today we discussed a case involving a TV Guide board game startup, in which an entrepreneur, starting with little more than an idea and strong industry knowledge, put away about $2M (in 1984 dollars) in a year, without hiring any employees and by taking on almost no risk. Sounds a bit absurd when put this way, but he was able to pull it off due to a few things:
- Doing a licensing deal with a very strong brand (TV Guide)
- Hiring 3rd parties to do all the work, and paying on commission instead of salary (almost all costs were variable instead of fixed costs based on sales)
- Using his network and the network of his partners extensively to find the right partners

The main risk the entrepreneur took on was reputational, and this was only if he didn't follow-through with his promises. In his eyes, even if the game flopped, his partners would understand as long as he delivered on his obligations and showed that he was giving it his best effort.

In addition, he took a risk in trusting TV Guide when pitching his idea to them. However, as people often say, ideas are easy to come by; it's all about execution. If someone else can easily copy your idea and do it better than you, you may not be the best person to do it. A classmate mentioned that in the case of Facebook, Mark Zuckerberg ripped off the idea and ran with it, so why should entrepreneurs trust others with their ideas? In the TV Guide game case, he had very strong industry background, a well thought out plan for how to execute it, and a good network, so TV Guide trusted him to execute the plan; also, he knew that TV Guide faced reputational risk if they stole his idea.

How common is it to find situations like this where you can execute no-risk endeavors?