How to Discover Great Food Business Ideas

Finding great food business ideas shouldn't be hard. You'll learn:

• Why you shouldn't ask your friends
• Should you choose based on passion?
• Why surveys might mislead you
• How to make a list of ideas
• Why you should never pay attention to trends
• Why choosing downsides matters
• Why you shouldn't lower your prices
• The Narrowing strategy
• 7 Ways to create an edge

You can tell when someone is lying. They avoid eye contact, hide their hands, and speak in circles. And even if you don't consciously spot these signs, your gut goes off like a fire alarm.

The frustrating part is that despite these signals, you don't get to catch them all. Lying happens in real-time. You don't get enough time to analyze every single pattern to figure out if you're getting played.

Great ideas lie. What looks great on paper doesn't always turn out well in practice. Don't believe them at face value.

You can sort of tell what the silhouette of a great idea looks like, but you're seeing it through foggy glass. And that glass will never be crystal clear—but with better thinking, you can make it clearer.

In this course, we want to reduce the fog so you can get better at spotting great ideas. Our goal is to set your personal idea alarm to only ring when it's actually found gold, not dirt.

Don't Ask Your Friends

When trying to search for ideas, most people go around knocking on friends' doors. "What's a great idea? Do you think this will work? Why do you think they're so successful?"

This will leave you confused and lost.

Most of us do a poor job at figuring out what good ideas look like. Why? Because ideas hinge on people's desires. And people's desires move unpredictably. They're so vague and weird that asking a friend "What do you want to eat for lunch?" leaves them paralyzed.

The answers you'll receive will always leave you saying "duh." While they will try to sound smart, their explanations will usually end up in some form of:

1. Weird cause & effect: "Lahat kumakain ng fried chicken so go."
2. Wrong assumptions: "Okay yan kasi mura, lahat gusto ng mura"
3. Oversimplifications: "Eh prinomote kasi ng influencer"

None of these explains why ideas work. They don't establish proper cause and effect. They're based on anecdotes and feelings. They reveal no new insights. The worst part: their counterpoints are also true. If you debate the opposing side, you can prove it equally right.

Most explanations of ideas are so obvious that you can assume that everyone else is thinking the same thing. With walking towards the same direction, you can't expect any breakthroughs. Down this path, you'll end up with a me-too idea that nobody wants.

Asking others also ignores the reality that great ideas take the shape of their owners. Here's an idea: "A bakery selling pricey cakes and pasta with religious materials on the walls and tables." If you guessed it right, that's Mary Grace. This particular idea is so steeped in her personal religious life that her cafes almost feel like Sunday mass. Not sure if that works for you.

Don't go looking for ideas from other people. Great ideas always need you to figure them out.

Passion or Demand?

Say you're a movie director.

If you had to choose one: make another chart-topping Dwayne Johnson blockbuster, or a money-losing Academy Award winner that tanks in the box office?

The good news: you can get both. The best movies can always have an element of both: a personal stake and commercial success.

Most people select ideas witha black-and-white lens: from a place of passion (”This is what I love to do”) or from a place of demand (”This is what people want to buy”). The first an artist, the second is a merchant.

The tortured artist, seeing everything as personal expression normally ends up with a vanity project nobody else cares about. The opportunistic merchant, chasing whatever is hot at the moment, ends up making the 50th copycat.

You can also see how the artist and merchant clashes when you compare McDonald's with a fine dining restaurant. At McDonald's, they only think about the customer. They care little about self-expression. It's about speed, price, and flavor. Now in a fine dining restaurant, you'll hear the chef talk about their childhood experiences, favorite ingredients, or the story of a farmer. One leans towards customer satisfaction, the other on self-expression.

Both approaches have their merits and drawbacks, but you get the most when you combine the two.

Don't you find it weird that we often see business as a nemesis to art?

But in art and business, your objectives look alike: create a thing of beauty. The big difference is that in business, you need to turn it profitable so people can continue to enjoy it long after you release it in the world. In a way, the businessperson is just an artist who cares more about customers than themselves.

Your business is your art. Care for it. Find it worthwhile. Believe in it. Otherwise, why should other people believe you?

And when you've found something you believe in, ground it in reality. Find allies. See if you can you convince other people to believe in it too. That's where your market instincts come in.

Skip the Surveys

If you ask 10 marketing people how to do market research, 10 will tell you to run a survey. Maybe half will ask you to take it a step further and run a focus group.

The thing about surveys is that they serve as a proxy for critical thinking. Surveys make you feel safe because “you did the research.” But that's like adding chocolate syrup to rat poison.

"But I need data." Really? What do you need it for?

People who do surveys often just do it to collect data just because. Since marketing gurus say you have to do it. They say it makes you less emotional. They say it helps you make smarter decisions.

Let's put that into practice then.

So you ran a survey about people's favorite cuisines. You conclude with a result: 25-year olds favor Japanese food above everything else. Based on the data, would you now just limit yourself to selling ebi tempura and sashimi—and every idea that isn't Japanese won't cut it?

Surveys end up wasting time when you don't know what you'll do with it. With pointless data, you'll get a pretty Powerpoint without a path moving forward. Don't collect data without a specific reason to do it.

If you insist on gathering data, you need to have a hypothesis first. This hopefully leads you to workable insights.

You can frame your hypotheses as questions:

• 🍫 Can dark chocolate be as popular as milk chocolate?
• 🍔 If I made my burgers square, will more people like it?
• ☕ Iced tea is better than coffee when done the right way.

When you have guesses like these, you can now test them.

A survey looks like the most obvious test—but it's not easy to pull one off where you get answers that reflect reality. With our without malicious intentions, people lie in surveys. They'll tell you they love your product, but won't actually pay for it in real life. They'll say they want premium products but only because it makes them look good. They'll hit the brakes on harsh feedback because they don't want to hurt your feelings.

So the best thing to do is to just make your product and send it to people. Even better if they don't know who you are.

Find a way to reach out. Personally talk to them. Look at their faces. When you ask them how they like it, do they punctuate their sentences with exclamation marks? Are they describing your product with attention-to-detail and not just saying that "it's good?" Are they asking you when they can order?

And don't go asking dead-end questions. "How do you like it?" is one of the worst questions you can ask. It's too generic that people will default to saying it's good. You want them to say revealing, specific things. You can ask questions like these:

• How do you like it compared to y? Can you tell the difference?
• What about it do you like and not like?
• What's your favorite thing to order in x? Would you get this over that?

No matter what marketers tell you, it's not a great idea to run a survey for a tiny small food business. Just make your product and ask people directly. And do it in a way where they will tell you the truth.

Build Your Top 5

Before we learn how to select ideas, we need to have ideas first. Specifically, you need to have ideas first.

So draw up a list.

You don't want to make a list that's too long and leaves you paralyzed with decisions. You also want a few options so you're not too limited. So just start with 5.

Just to make smarter decisions, add some criteria to your top 5. You don't want to randomly select them based on just your feelings.

You can ask these questions to pick them out:

• Energy: Are you so excited about this idea that you already want to tell your friends about it just thinking about it?
• Viability: If you found someone else doing this idea, would you actually use your hard-earned money to buy it, not just admire it?
• Edge: How many others are already doing this idea? Do you have something that will make you different?

Build your top 5 based on how you answer those 3 questions. Those 3 won't guarantee that your idea will work, but they're essential. If your idea fails one of the 3 above, it won't cut it. So make sure it passes our basic criteria.

Choose Your Downsides

When going for an idea, you want it perfect. But no matter how good an idea is, it will possess downsides.

• 🍪 Cookie are easy, but everyone else is doing it
• 🍣 Sashimi is delicious but you need to serve it cold
• 🌶️ Super hot food makes spicy fans happy but not many people can eat it

Since they all have drawbacks anyway, should you just go for any idea then? Not really. Those drawbacks aren't equal. Some are minor inconveniences while others can bring an entire business down.

We can't capture every single downside, but here are some common downsides that you should watch out for.

The Unknown

If you need to explain food to someone, you're already in a deep hole. People fear the unknown way more than you realize.

When was the last time you took a risk with your brand of cooking oil? Or with milk? Or dishwashing soap? When you go to the grocery, you seek out the brand you've always bought and leave. You don't spare a thought.

That's how we buy things. We feel safe with the familiar. This is why food corporations spend so much on ads—because it turns unknown products familiar.

So if you're planning to go obscure and sell borscht, gougere, or terrine in the Philippines, expect a tough climb.

Unfresh Fresh Food

When you're selling from home, you have one huge limitation: nobody gets to eat your food fresh. This makes salad, sashimi, or hotpot hard to sell.

Always consider how good your food is when it's no longer fresh. And if it can't be fresh, how easy would it be to reheat it to bring it back to top form?

Pointless Premium

You might think that using premium ingredients will make you look better. Not always true.

Most of us can tell A5 Wagyu from local cattle, but that's the exception not the rule. Can your average customer tell if you fried with expensive cooking oil? Or if your lettuce came from a heritage farm? Or if you served them bean-to-bar, single origin chocolate?

If you're going to use ingredients with huge price tags, make sure your customers understand them. You'll waste a lot of money selling something upscale that people don't care about.

Packaging Hell

The less packaging you need to use the better.

Think of pizza. Your entire order comes in just one box. With a setup like that, you save on time, money, tape, and hard labor. (It is very hard taping down liquids in containers) You also do the planet some good.

Some types of food require tons of packaging. Think about tacos. The tortilla needs its own container. So does the guac, salsa, meat, and whatever secret sauce you want to throw in there. (You can compromise by pre-building the taco for them, but you rob the customer of fun, another downside.)

Small Audience

People who love spicy food always lament how every place pulls their punches with the heat. When restaurants offer a spicy option, it's always too timid.

But it's really just math. If you assume that only 5% of the population can eat super hot food, then your business is doomed if you just cater to that 5%. It's not like luxury goods where the 5% will pay a lot more. Spicy eaters don't pay more than non-spicy eaters so you'll only lose money chasing them down.

If you want to go for a small specialized audience, do it when that audience pays more than everyone else.

Think about healthy food. Nutrition buffs see healthy food as an "investment," whether it's low-calorie, keto, or gluten-free. If you see the prices at Healthy Options, you know they spend accordingly. In this market, it makes sense to limit yourself to a smaller audience.

Mismatched Use Case

When people order from a home business, you can assume that they're at home or at work. They could be alone, eating with someone, or with a large group. They will likely share portions.

If you want to sell seared scallops with asparagus, good luck. Date food can't worm its way into the office. We just don't eat like that.

Think about how customers will eat your food. Imagine yourself sitting in the table where they dig into it. There's a reason why palabok, lasagna, and burgers do well in delivery.

Hard Price Anchors

Say you want to sell the Starbucks of soda at P120 per serving. There’s just one problem: you can get the same thing from the grocery for only P30—and everyone knows it. But my soda is special. It doesn’t matter. Most of us believe that soda should only cost P30 because Coca-cola said so.

You’ll find that certain product categories have price anchors. You'll find these prices everywhere so they’re hard-wired into our brains. We compare all other prices to them. When a price is anchored, you'll find it challenging to convince customers to pay more.

This doesn’t mean you shouldn’t try though. Sometimes it works. Starbucks entered the market with P100+ coffee when the average price was P20. You can pull it off, but it’s tough.

Try Once Food

We buy different food with different frequencies.

We buy large, celebratory dishes like lechon a few times a year. In contrast, fried chicken joins the average dinner table on an almost weekly basis.

Think about how often people will buy your food: the more frequently, the better. But if you insist on a product that we don’t buy often or save for a special occasion, make sure you price it at a premium. You don’t want something that’s infrequent and cheap.

Small Portions

Sarah sells lasagna for P1,500 per tray. Jared sells rice bowls for P150 per order. To make P1,500, Sarah only needs to talk to one person, pack once, and watch Netflix. On the other hand, Jared, juggling cooking, packaging, booking, and customer service for 10 customers, is in a foul mood.

In a home business, you need to protect your time. Everything's just you. Maybe someone's helping you out. But you're still limited in what you can do. From a logistics standpoint, you're better off selling large, premium food because you save time.

Avoid Trends

At their peak, sushi bake shops boasted endless queues. But how many do you still see around? When a trend gushes in, never join in. It’s a trend because it goes away. And when it does, you’ll be in trouble.

“But what if the trend becomes timeless?” Ramen started out trendy. But the hype stood steady and now we see even more ramen shops than Japanese restaurants. Milk tea, KBBQ, and shawarma all followed the same path too. Trends sometimes crystallize and fuse with culture. But don’t confuse the exceptions for the rule.

For every ramen story, there are hundreds of dalgonas, cronuts, and sushi bake businesses with owners left crying. Tread carefully when chasing trends. They sometimes work, but they usually don’t.

The Narrowing Strategy

So if you shouldn't do trends, how can you become unique?

Finding a standout product can feel exhausting because every high-performing category feels too saturated to do something original. You'll find too many shops hawking lasagna, dimsum, cookies, milk tea, and sushi.

“But I’m not boring, I’m special. I’ll do what nobody does: West African food.” You can choose to go obscure, but you’re taking the opposite risk: nobody understands what you serve. People fear unfamiliar food. You’ll end up spending your entire marketing budget just trying to explain to anxious diners what is it that you sell.

So here comes The Law of Optimal Weirdness.

The Law of Optimal Weirdness states that you need just the right amount of weird to sell your product. Not too little that you’re boring. Not too much that people misunderstand you. People buy the middle.

A great method to find your optional level of weirdness is the Narrowing Strategy. Here's how you do that:

1. Pick a popular, familiar thing that people already eat.
2. Narrow it down to a specific version until you can claim to be either the best or only player in that department.

Let's see how that works in practice:

🍰 Cakes → Chocolate Cakes → Dark Chocolate Cakes → No Sugar Dark Chocolate Cakes

👹 Japanese → Ebi Tempura → Tiger Prawn Ebi Tempura → Tiger Prawn Ebi Tempura in Party Trays

🍝 Italian → Pasta → Ravioli → Handmade Ravioli → Handmade Cheese Ravioli

🍔 Burgers → Grilled Burgers → Grilled Wagyu Burgers → Grilled Wagyu Burgers by Lolo

When you narrow down a category, you're seizing the throne of a small kingdom. You grow into the big fish in a small pond. And people really like buying the big fish. Whoever leads tends to stay there.

On top of your claim, narrowing down allows you to tailor your products towards groups of people with special needs. Think vegans, lactose-intolerants, or high-protein bodybuilders. Some niche groups, because they've been deprived of products that cater to their needs, often pay more. This means you can charge a premium.

Some narrowing strategies you can use:

• Change the cooking method (ex. grilled → fried)
• Substitute a key ingredient (ex. milk → alt milk)
• Turn something commercialized into handmade (ex. artisanal potato chips)
• Change the serving size from what people are used to (ex. solo plates → party trays)
• Limit the geography (ex. only in QC)
• Change how it traditionally looks (ex. round → square pizza)
• Change the sides or supporting cast (ex. fries → onion rings)
• Make it for a different audience (ex. families → solo diners)
• Invent a new product or category (ex. sinigang → sizzling sinigang)

Competition indicates demand. Contrary to popular thought, entering a category with heavy competition isn’t always bad—it tells you that the market exists. So whether a segment has plenty or little competition doesn’t matter as much as people make it out to be. Don’t overthink your competitors. Instead, figure out how you can create something that will transform the category that makes you so different from everyone else.

Edgecrafting: 7 Ways

In a mature and saturated market like food, you can’t win with slightly better.

If you hear someone sold a brownie that’s “10% more chocolate-y” than the one you eat, would you go out of your way and seek it out? We just don’t care anymore. If you open Grab, you have hundreds of choices in five seconds. To make people light up, you need to create meaningful differentiation.

How do you know the difference is meaningful?

Would you say that Coffee Bean is meaningfully different than Starbucks? Sure they offer different products—but is it different in a way that matters to you? Given how most people just choose Starbucks, probably not.

Your customers decide what meaningful means.

Just because you used "premium French butter" or employed "regional cooking techniques" means your customers will value you more. You can't just assume that the public shares your passion for details. When you can't find a way to make it meaningful to them, you're as good as generic. It doesn't matter how special it is to you.

So for you to stick and succeed, find an edge. And make that edge meaningful to your customers.

7 ways you can craft a meaningful edge:

🔪 Quality Edge

Can you make your product 10x better than everyone else?

Think about iconic dishes in restaurants. Why do some dishes get so popular that they define an entire genre? Manam's sisig. Mendokoro's ramen. Crosta's pizza. They didn't turn things upside down, they just made things better. A lot better.

🔪 Barrier to Entry Edge

Can you make a product that other people can't just copy?

Compare cookies with croissants. With cookies, you just make the dough and throw it in the oven. Not with croissants. Croissants require better kneading technique, a lot of expensive butter, more skills, and huge counter space. This is called a barrier to entry—people can't just copy you because it's hard. Find things that you can do that others might find challenging.

🔪 Innovation Edge

Can you turn something upside down?

Purists argue that authentic, Kapampangan sisig should ditch the mayo and the sizzling plate. But Manila disagrees. Someone threw those weird things in and now it's even more popular than the original.

🔪 Nutrition Edge

Can you make something healthier without compromising quality?

We've known that cow's milk doesn't do us good. But they're so popular because all the alternatives suck. Not anymore. With the advent of all sorts of milks made from nuts and oats, we're starting to drink less dairy.

🔪 Brand Edge

Can you build a stronger emotional connection with your customers?

Every coffee snob will tell you that Starbucks' coffee sucks. And they're right—but it doesn't seem to matter. Starbucks sells overpriced drinks and pastries, but people love them anyway. If you can build an emotional connection to your brand, people might forgive your mediocre products.

🔪 Efficiency Edge

Can you make it faster or cheaper?

The media has been taking a crap on fastfood for decades. Yet they all keep hitting record-highs. Despite questionable nutrition and quality, we buy fastfood because we want to save time and money. If you can do the same for people, you'll have an edge.

🔪 Convenience Edge

Can you make life less frustrating?

Similar to fastfood, instant noodles do your body no good. But we don't seem to mind. We buy instant noodles because they make our life easier: just add water and get a hot meal. You see this pattern in broth cubes, pancake mixes, and pasta sauces. Making things easy pays off.

🔪 Status Edge

Can you charge a lot more than others?

A Rolex costs a hundred times more than a Swatch. No logic can explain that. We pay more for things that increase our status. Consider turning your product into a status symbol if you can.

Whatever it is you want to do, you need to find an edge. If you can't find one, you'll be lumped in with everyone else. And in food businesses, "everyone else" loses money and dies. Average won't survive.

Don't Price Lower

What if I just outprice everyone else? That's an edge right? People like cheap. They'll always like cheap. So I'm gonna win.

You've probably heard someone say this, and they're wrong.

You just can't outprice your competition because they'll just match your lowered prices overnight. Nothing stops them from doing it. And since they're more established than you, they can drag it out for a long time and bleed you out. If they're smart, they won't even think about you. They'll let you run your sacrificial prices until you run out of cash.

There are two exceptions though.

Bounty Fresh is one of the largest chicken producers in the country. They also run a roast chicken shop called Chooks-to-go. Because they control the supply chain, they can comfortably outprice everyone else. With an advantage like that, they can use lower prices as a strategy.

Another way is through scale. If you can grow your operations in size, you can find a way to increase speed, reduce mistakes, and purchase in large volumes. This will allow you to lower prices as big corporations do. But you won't have this advantage when you start.

Be Hard on Your Ideas

Suppose one day you wake up and see your bestfriend all over the news. She got arrested for murder. Would you believe that she did it?

"No way that's true." Most people will deny reality and won't bother finding out the truth? We'd never admit it, but when the truth is hard to face, we look the other way.

This phenomenon is called confirmation bias: we believe only what's convenient. Because of this bias, we ignore everything that goes against our beliefs. This sours a lot of ideas. Confirmation bias turns people delusional.

How does this look like? Let's look at Mark.

Mark's lifelong dream is to sell spam sandwiches. Mark goes to sleep at night with nothing but thoughts of spam sandwiches, wrapped in wax paper and tucked in a brown box. Mark's obsessed. There’s just one problem: he's never actually seen anyone ever buy spam sandwiches. “But my cousin loves spam sandwiches, she says she’ll buy 50 of them,” Mark tells himself. So armed with his cousin's story, he ignores all other evidence and opens his spam sandwich shop. It closes after two months.

Take extra caution when you love an idea. Having strong feelings towards something can mislead you. Your passion won't determine if customers will buy your idea. You need to validate your ideas and see if they're aligned with reality.

Great Home Businesses in the Wild

We found a few home businesses that know what they're doing. If you spot more, send us a message so we can add them in as case studies:

Kodawari serves a well-dressed version of a common fast-food favorite: gyudon. But Kodawari took an unexciting dish and served it in a party tray (new audience) with a creative flair (inventing something new). Topped with fried basil, which you would never find in Japanese food, it doesn’t look traditional at all. And when you bite into it, it feels rich and sticky unlike the stuff you’d find at Yoshinoya.

Hey Pie People sells upscale, traditional pies (underserved category) that many claim is the best they’ve had (10x quality). Each pie costs as much as an Apple charger with a controversial non-refundable reservation fee on top, so detractors rail about the unfair pricing. But despite the backlash, the pies sell out anyway.

Maria Makes bakes colorful, creative frozen brazo cakes (focused menu and underserved market). She could have gone the do-everything path and made generic cakes, but she decided to focus on a specific subcategory that didn’t have enough players.

Wrapping Up

Ideas are hard. In this course, we tried to make it a bit easier by giving you a framework on how to tell good ideas from bad ones. We also demystified a few popular theories that don't really hold up in the real world.

So when you're trying to find an idea for a home business, keep the following in mind:

• Don't ask your friends.
• Start with your passions, but make sure there's demand for it.
• Skip surveys.
• Consider all the downsides. Don't choose the worst ones.
• Narrow down your ideas.
• Find an edge. Find as many as you can.
• Don't lower your prices.
• Be very critical on your favorite ideas.

As you're starting your business journey, I hope you come up with an idea that both you and your market will love.

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