3 Things Your Business Idea Must Have To Succeed — as Proven By Famous Harvard Business School Startups There are different ways to come up with business ideas, but the successful ones share these factors.

Every startup starts with an idea.

But how do many BIZ Experiencess actually come up with those ideas? The reality may surprise you.

We are angel investors who spent the last couple of years interviewing 18 Harvard Business School alumni on their experiences starting companies, for a book called Smart Startups.

For the HBS grads-turned-founders we spoke with, there was no "light-bulb moment" when their business idea struck them. On the contrary, all had embarked on a true ideation process. They vetted ideas — often hundreds of them — over weeks, months, or even years.

In our interviews, we identified two types of ideation: organic and deliberate. With organic ideation, the BIZ Experiences develops an idea based on his or her life experiences or those of family and friends, and builds it over time. With deliberate ideation, the BIZ Experiences has no specific idea to start with, and instead embarks on a process to find one.

No matter the process, however, our founder interviews revealed that any successful business idea has three factors: a large market opportunity, relevant founder skills, and a huge amount of passion for the project. You might call the fertile ground between these factors "the ideation triangle."

To see how a successful business idea takes root, let's follow one of the founders on his journey: We'll use Matt Salzberg, who graduated from HBS in 2010 and founded meal delivery service Blue Apron in 2012. His company reached a valuation of $2 billion in 2015, went public in 2017, and was just acquired by Wonder Group this past September.

Related: The Secret to Coming up With New Ideas

1. A large opportunity

A good idea starts with the potential for a large opportunity, which sounds logical. But a large opportunity should not be confused with a large market. An opportunity arises from solving a problem or addressing a need in a market, not just identifying a sizable market. Ideally, you want to solve a big problem in a large market.

Salzberg used the deliberate ideation method, and when he set out to find the idea that would eventually become Blue Apron, he started by looking at a handful of macro industry trends.

In the mid-2000s, he observed rapid growth across e-commerce categories, and noted that the grocery category hadn't yet taken off. "We narrowed in on this idea of delivering recipes and ingredients to people as something we just wished we had in our lives," he says.

The internet had transformed other retail verticals, so he reasoned that grocery would be next. But he quickly realized this would require a significant behavioral change.

"At the time, Amazon Fresh was nothing of a business. Instacart didn't exist," he says. "Online penetration of this category was basically nothing, and there were a lot of reasons for that. Food is perishable and complicated. Logistics are hard. Most people go to the grocery store in person. They touch the produce. They feel it. So with an online grocery delivery service, the quality had to be amazing. The value had to be there too. And we had to get people to trust us to select their vegetables for them. That was the big behavior change."

But Salzberg did have one behavioral "known" working for him: Blue Apron was still just setting people up to cook in their own kitchens, with the same kinds of ingredients they would have purchased themselves. "We weren't inventing Twitter, where it was, like, this brand-new product," he says. "We were trying to help people cook at home — better, easier, and more affordably."

Most "innovation" does not introduce entirely new concepts. Of the founders we spoke with, the vast majority were not inventing tech so much as rethinking its use — how existing products or services could be better designed, delivered to solve a problem, enhanced for convenience, or produced and marketed for a lower cost. Most of the time, they were targeting existing markets, with the desire to meet a need therein.

Related: How To Use BIZ Experiencesial Creativity For Innovation

2. Relevant skills

The second leg of the ideation triangle is relevant skills. But skills should not be confused with industry expertise.

Industry expertise can even play against you if you are coming up with new business models and want to disrupt the status quo.

As a founder (or founding team), you don't need to have all skills in-house. But you do need to have certain skills. These are not only crucial for crafting the optimal launch and scale-up team, but will also impact how investors view the founder's fit for the opportunity.

According to the founders we spoke with, there are two skills that are absolutely critical: understanding your customer and the foundations of running your business.

To understand your customer, what's better than being your own customer? Many of the founders were the ideal customers for their businesses. But this isn't necessary. Salzberg was not a home chef. He also didn't have an operations background. But he knew strategy and fundraising—and used those skills to raise $200 million for Blue Apron before their IPO.

"I didn't know anything about how to manage people, or how to run a perishable supply chain," he says. "That was the stuff I had to learn."

Related: You're Creative and Have Great Ideas — Now What?

3. Passion for the project

Rounding out the last leg of the ideation triangle is passion.

Sure, passion is fuel, necessary to get through the rough patches. But passion is also what enables you to recruit a team, convince investors to back you, and attract customers to your offering.

"Food has always been a passion of mine, and it's so emotional," Salzberg says. "It connects people with history, culture, and family. I think that's why we were able to give such life to the Blue Apron brand."

Passion is especially important when you're bringing something new to the market—because instead of just selling a product or service, you're now also convincing people to try something they didn't know they needed, which requires changing their behavior.

But an interesting question to consider is: What should you be passionate about? Is it the industry, the product, the impact you are trying to achieve, monetary reward, independence in your life, or the challenge of climbing a mountain? Ideally you're passionate about all of it, but based on what we heard from the HBS founders, the truest driver of passion is the end result and the impact it can have. "I wanted to start a brand that would have an impact on people's lives," Salzberg says. "I wanted to change their relationship with the world in some way."

From the book Smart Startups: What Every BIZ Experiences Needs to Know — Advice from 18 Harvard Business School Founders by Catalina Daniels and James H. Sherman. Copyright © 2023 by Catalina Daniels and James H. Sherman. Reprinted by permission of Harper Business, an imprint of HarperCollins Publishers.