Developing business ideas: The first step toward successfully starting a company

You want to start your own business – maybe even in Bulgaria? Then the first thing you need is a solid business idea. But what actually makes a good idea? Does it have to be new, revolutionary, or scalable? In this article, we’ll show you how to systematically develop business ideas – based on proven theories, practical methods, and concrete examples.

This article is part of our series on the startup process. In the next posts, we’ll cover: naming, types of business entities, opening a bank account, and how to secure a company address.

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Why the origin of your business idea matters

Many aspiring founders start with a sudden flash of inspiration or a personal everyday problem. That can work – but often the idea lacks the depth to be further developed or explained, why you are the right person to execute it.

It’s often better to proceed in a structured way: Where is there real customer need? What are you particularly good at? How can you test risks early on? There are several theories that we’ll introduce to you in this blog post.

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Theoretical Overview: How to develop business ideas

There is a wide range of literature and theory around how business ideas are developed and where good ideas actually come from. Here is an overview of some of the most common models:

Theory	Core Message	Usefulness for Idea Development
Opportunity Theory	Entrepreneurs discover opportunities when they identify a market gap and their own capabilities	Sharpens awareness for under- or unmet demand
Effectuation vs. Causation	Start with available resources & partnerships (Effectuation) instead of fixed goals (Causation)	Encourages starting small and adapting ideas along the way
Jobs-to-be-Done	People "hire" products to complete specific tasks	Focuses on real user problems rather than features
Blue Ocean Strategy	Create new value spaces instead of fighting in the red ocean of competition	Provides tools for differentiation
Resource- and Competency-Based View	Competitive advantages arise from unique resources (e.g., networks, IP, data)	Checks if your idea is based on something hard to copy

In the following sections, we’ll dive deeper into these theories.

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Developing business ideas with Opportunity Theory

Opportunity Theory in entrepreneurship research states:

Business ideas don’t emerge randomly – they come from recognizing and exploiting entrepreneurial opportunities.

Discovered vs. Created Opportunities

There are two schools of thought on how such opportunities arise:

• Discovered Opportunities (Discovery Theory): e.g., new technologies, legal changes, supply shortages.

Examples: access to new technology like AI (think OpenAI) or supply chain shortages like the mask and toilet paper crisis during COVID. Those who are “alert” can spot these gaps before others.

• Created Opportunities (Creation Theory): You actively develop something new – like a business model for an emerging trend.

An example would be Airbnb – “staying at someone’s home” created a whole new market beyond hotels, hostels, and classic vacation rentals.

In practice, many real-world business ideas are a blend of both. They often begin as a vague problem or weak signal and become clear opportunities through experimentation and development.

Opportunity Theory in Practice

In practice, the process often works like this:

1. You recognize a market problem (e.g., outdated processes in an industry)
2. You realize: You could solve it.
3. You validate the idea – through testing, conversations, pilot clients

Example: A German expat in Bulgaria notices that there’s no proper tavern in Veliko Tarnovo (so far, I haven’t found one myself). He sees the opportunity, has the know-how and network, and makes it happen (if you’re reading this and feel inspired – we’re happy to support you). That’s a classic “discovered opportunity”.

Relevant academic literature includes:

• McMullen & Shepherd (2006): Entrepreneurial action and the role of uncertainty
• Alvarez & Barney (2007): Discovery and creation as alternative theories
• Shane (2003): A General Theory of Entrepreneurship (Affiliate Link)

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Effectuation vs. Causation – Two Thinking Styles for Founders

Another helpful concept when developing business ideas comes from entrepreneurship researcher Saras Sarasvathy. She distinguishes between two ways of thinking:

Causation – Goal-Oriented Planning

You start with a clear goal (e.g., launching a catering business) and plan backwards: market analysis, business plan, funding, execution.

Typical of MBA programs and large corporations.

Effectuation – Resource-Based Action

You start with what you have: your skills, your network, your knowledge. From that, you gradually build your business model.

Typical of founders with little capital, lots of flexibility, and a willingness to experiment.

Our tip: Combine both! Start with Effectuation – iterative, lean, and low-risk. Once you gain traction, you can shift to Causation for further professionalization.

Relevant academic literature:

Sarasvathy, S.D., 2001. Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of Management Review, 26(2), pp.243–263.

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Developing Business Ideas with the Jobs-To-Be-Done Approach

One of the most customer-centric methods for developing business ideas is the Jobs-to-be-Done (JTBD) approach, made famous by Clayton Christensen.

The idea: People don’t buy products or services for their features – they buy them to make progress in their lives.

Example: No one wants “a drill.” What they really want is a hole in the wall. Or more accurately: they want to mount a shelf to create order or feel good at home.

Jobs-to-be-Done in Practice

Ask yourself:

• What are people in my target group really trying to achieve?
• Where are they currently struggling?
• What are they dissatisfied with?

The better you identify these “invisible jobs,” the better you can create an offer that delivers real value.

Here’s a video of Clay Christensen on the HubSpot Marketing YouTube channel:

https://www.youtube.com/watch?v=Stc0beAxavY

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Blue Ocean Strategy – Developing Business Ideas Through New Markets

Another way to develop business ideas is the so-called Blue Ocean Strategy, developed by W. Chan Kim and Renée Mauborgne. Their central message is:

Instead of competing with others, create your own market.

In the “red ocean,” everyone fights for the same customers. In the “blue ocean,” you address a new target audience, combine services differently, or eliminate unnecessary industry standards.

Helpful questions (ERRC method):

• Eliminate: What can you drop that everyone else does?
• Reduce: What can you simplify or make cheaper?
• Raise: Where can you raise the standard?
• Create: What can you create that’s entirely new?

Again, take Airbnb. They didn’t copy the hotel market – they created a new niche between private apartments and short-term rentals, for travelers who wanted to stay differently.

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The Resource and Competence View – Use What Makes You Unique

Many founders make the mistake of focusing too much on their weaknesses: “I have no capital,” “I don’t have experience with XYZ.” But often it’s much more effective to build on your strengths – that’s exactly what the resource and competence view recommends.

Ask yourself:

• What am I especially good at?
• What experience do I have that others don’t?
• What network can I access?
• What problems can I solve without much money?

Goal: Build a business model that fits you – and is hard to copy.

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Developing Business Ideas Is a Process – Not a Lightning Bolt

The best business ideas are rarely flashes of genius in the shower. They are the result of a structured process: You observe, combine, test, fail, improve – and in the end, you have an offering that works.

If you're founding – especially abroad in a place like Bulgaria – it’s worth taking a realistic look: What do you really need to get started? Who are your first customers? What problem might only you be able to solve? And how can you start small without overwhelming yourself?