Alex Beck is the founder of Clarafinds.com a fintech comparison site to help people find and compare the best new finance products.
10 min. read
Updated October 29, 2023
Generating a business idea can be tricky, the worst thing an entrepreneur can do is assume a problem exists and build a business based on this assumption. The advice many entrepreneurs are given is to get out of the building. If applied metaphorically it’s great advice (if not it can be a mess, why would your ideal customer be walking around the streets?).
But how does one digitally get out of the building? The answer is social networks. Specifically, in the case of generating business-to-business (B2B) ideas, you want to focus on LinkedIn.
There are a number of reasons you should reach out to prospective users before starting a business. Most importantly, it helps ensure that you’re building something people will use and pay for. It’s much easier to build something around a user’s needs rather than pivoting your product to fit their needs post-launch.
So why use LinkedIn to develop your business idea? First, it’s a professional network so people expect work inquiries there. As long as your request is contextual to their industry, work, or other professional factors—there’s a good chance that they’ll connect and jump into a conversation with you.
It’s also far easier to define and narrow in on a specific audience based on location, job title, and industry. This is especially useful if you’re exploring a business idea that caters to other businesses and need to refine your focus around specific professionals or even a pool of organizations.
The best way to explore business ideas is by reaching out to LinkedIn members directly. You’ll see far more engagement, be able to follow up on specific questions, and potentially build relationships with future customers. For the purpose of this guide, we’ll be covering how to develop a strategy to directly message LinkedIn members.
Additionally, as you begin reaching out to LinkedIn members, it may be worth engaging with users on LinkedIn in other ways. Look into industry groups that you can join or start commenting on conversation threads about from users and topics that are related to the business ideas you’re exploring.
Just keep in mind that this is not your primary outreach method and will not lead to the same type of engagement as direct messaging. Instead, use it as a way to build up your presence on LinkedIn and open up natural avenues for connection. Rather than reaching out cold, you can instead reference an article a user shared, the comment they had on a post, or that you’re both part of the same industry group.
Before you start reaching out to LinkedIn users, it’s best to land on a specific industry you want to explore. You also want to do some initial market research that can inform your idea and the opportunity you’re interested in. In general, you want to understand if the industry is a growing market and how regulated it is.
If it’s a shrinking market or stagnant it will be difficult to find interested investors or contacts willing to speak about the industry. If it’s a highly regulated market that means the barriers to entry will be higher. This means potentially more expensive startup costs and confidentiality issues when you start reaching out to LinkedIn members.
Try to find a niche that piques your interest or that you already have domain expertise in. Then start looking to see if you have a close friend or family member in the industry. If not, maybe their connections are.
The best way to start refining your ideas is to look at your current connections and see if any of them are connected to people in the industry you’re interested in. These are 2nd level connections, meaning that someone you know is connected with them but you aren’t directly. You have a few options to start exploring this list of people:
If you have a connection in mind that you’d like to explore their contacts, just visit their profile. From there, click the connections hyperlink located at the top of the page to immediately generate a list of their connections. In order to filter out mutual connections, you’ll need to filter results by unselecting 1st (primary connections) and selecting 2nd connections.
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If you don’t have specific connections in mind, you can start more broadly and explore all 2nd level connections you have. Just visit your own profile, select your connections at the top and you’ll land on a list of your connections. Switch over to 2nd level connections and you’ll see a full list that even highlights who your mutual connections are.
If you identify some 2nd level connections you’d like to speak to, it may be worth reaching out to your mutual connection for an introduction.
The next step is to work out the kinds of companies you want to work with. This will help you further refine your search based on the exploration you already started in steps one and two. For this example, let’s say you’re exploring opportunities in the FinTech market. In this case, there are a few different business types worth looking into:
a) Financial services firms like banks, insurers, and payment companies.
b) Investors like venture capitalists or private equity funds.
c) Other FinTech Companies.
d) Corporates that aren’t financial services
e) Small and medium-size businesses (SMBs)
Working out what types of businesses you want to reach out to can further define your idea and the opportunity for a specific business type. Typically the smaller firms or players get fewer people wanting to speak with them and are more willing to take a call. Larger organizations on the other hand may be more difficult to connect with. It may be wise to cast a wider blanket at first and further narrow your search based on initial interactions and responses.
Now, keep in mind that different organization types will have different touchpoints. For larger firms, you’d want to look at roles like CDO, strategy, and innovation, or heads of departments or business development roles. For smaller firms and SMB’s you target their GMs, CEOs, and operations. If you need a more general selection of job titles to work through, use the following list:
Once you have an industry, mutual connections, and roles/businesses in mind, it’s time to start reaching out. Here’s how to run a refined LinkedIn search:
Go to LinkedIn and type anything into the “search” bar at the top. Then click the “all filters” tab. Here you can input the location, although this isn’t vital to narrow down on initially.
Next, you can choose company names if you have any in mind. Then choose industries to target (if you have your niche) and most vitally down the bottom the role which LinkedIn calls “Title”. Here you enter the role (role name by role name) and you get a list of people to reach out to.
Remove the search query you had or add one that is relevant to the search and you’re away.
Now that you have a list of people you want to reach out to, it’s time to connect. You can use the InMessage feature (which is a paid LinkedIn feature but gets your message to them directly) to send as many messages as you like or hit “connect” and in the message prompt add your message. Keep in mind that they will only connect with you or respond if your message resonates.
The message we use has a 30% reply rate, which is very good for a LinkedIn cold message (or cold messaging in general.) Here’s the script we use that you can adapt:
I’m writing to hopefully learn from you. I have no product to sell, I’m just hoping to learn about problems you have at work. The aim is to see if I can build a product to solve this kind of problem. Appreciate your help!
Remember, not every message will resonate. Instead, you’re looking for volume at the start to increase your chances of actually connecting with users in your field of interest. You’re trying to simplify your research as much as possible, which means looking for trends in the response you get. For example, you may get responses like:
The more people that you reach out to, the more likely that you’ll see patterns emerge. Either job titles that respond or actual problems. The process is one of gradually removing job titles or industries that aren’t responsive or have problems you can’t solve.
The aim is to get to the point where you clearly understand the person’s problem, why it happens, and what kind of pain it causes. If it’s costing that person lots of money or time or loss of sales then it’s a good contender for a business idea.
When I used this technique I had a niche in mind specifically—anti-fraud teams at banks. Initially, I started broadly with a number of job roles using the ‘title’ search. I used words like AML (anti-money laundering), KYC (know your customer), and fraud words I discovered with a bit of googling about anti-fraud teams at banks. As my team and I began reaching out, all of the feedback and responses pointed in one direction. We needed to speak to people with roles in transaction monitoring teams. Once we knew that we began getting answers like:
Which are all different ways of saying the same thing. The current tools offered to anti-fraud teams are inconsistent and lack detailed personalization. Now, this wasn’t exactly what we wanted to hear, but it was a clear unifying problem for every bank we spoke to.
It pays to never push your conversations down a road you were hoping for. So don’t ask leading questions like “do you have X specific issue?” This limits the POV of the person you’re speaking with and may cause them to avoid speaking about where the true problem is.
This process can seem daunting, however, it’s a really fast way to generate concepts and build a network at the same time. You’re simultaneously researching and engaging potential customers before building anything. This can increase your chance of finding product-market fit and building an initial list of possible users at the same time.
The approach is essentially free and gives you access to 1,000s of people you’d struggle to connect with in real life. The best part is your future customers are doing your job for you, finding a problem and telling you how much of a pain it is. All you need to do is look for patterns, ask follow-up questions, and listen. It’s amazing what people will tell you when your focus is on doing something for them rather than selling something to them.