This is a summary of an article by Paul Graham about generating potential startup ideas. Of all of the things I have read about the topic this article is by far the best.
Don’t sit around and try to think of startup ideas, what you really want to do is look for problems – preferably problems you have yourself because it will give you the passion you need to dedicate a large portion of your life to this problem. The very best ideas have 3 things him common:
- They are things the founders themselves want
- Things the founders can build
- Things that few people realize are worth doing
It is so important to work on one of your own problems because it verifies that the problem really does exist. It is actually really easy to work on solving a problem that nobody actually has – especially when founders are starting trying to think of startup ideas instead of problems. The thing that is especially dangerous about this is that it is often these bad ideas that aren’t ‘horrible’ but sound good enough for you to start working on them. At YC they call these “sitcom ideas” or an idea they would make up on a TV show- like a social network specifically for pet owners. It sounds like an idea with a lot of potential, and it might not be a terrible idea until you start digging into it and realize nobody wants to pay for, there is little that is better than other social network sources, etc. The real danger here is that you will see is your friends will not say “I would never use this” instead they would say “yeah, maybe I could see myself using something like that.” Don’t imagine people wanting to use it, find people that REALLY DO want to use it.
Need. When you are launching a startup, you need at least some users that really need what your are making and want it urgently. You will realize you need to compromise in one direction:
build something everyone will like a little, or build something a small group will love. You need to choose the latter because a lot of people would be mildly interested in a social network for pet owners; but it will not gain any traction (especially in the early phase) until there is a core group that loves the product. When you do come up with a startup idea, ask yourself: who wants this right now- even if it is a crappy version? The first version will be just that – crappy, but if you cannot answer that question your idea is probably not good enough. It is usually a good sign if your idea will appeal strongly to a specific group of people. While you want to start in a small segment of a market, you want to have a fast path out of it (without much additional product change). In Facebook’s example, you had Harvard, then Ivy league schools, then colleges in general – now it dominates the web. Facebook had a fast path out of its initial small market. The problem here is that you probably won’t know right away if your idea will have a fast path out, so what you need to focus on is just making the product great.
Self. Graham gets a bit philosophical quoting a passage from Zen and the Art of Motorcycle Maintenance (page 3 of the essay) but the point is that the way to have good startup ideas is to become the sort of person that has them. One great piece of advice is to go to the front lines of emerging technologies and immerse yourself in the problems (IoT, Solar, VR, etc.) you can be at the leading edge as a user (not just an innovator) and you will see the challenges/opportunities that rise up from the next wave. In this context, he combines two quotes to come up with: “Live in the future, then build what’s missing” Most successful startups are the result of some external stimulus against a prepared mind that was ready to receive it. You need to be prepared to notice the things that are inconvenient or can be done better and NOTICE the opportunities they represent. The key word in that sentence was the word NOTICE, founders don’t “think up” startup ideas, they NOTICE them. If you are not at the leading edge of some rapidly changing field you can get to one pretty easily. Graham argues you could get to the “edge” of programming (building mobile apps) in a year. A year really isn’t a bad investment if you consider you will be spending at least 3-5 years of your life at a startup. It also gives you the ability to put things into code – rapid prototyping. So when you do have a an idea you can say “that’s an interesting idea, I will try building an initial version tonight”
Noticing. Once you are living at the edge of the future, you need to start turning off filters. Not only the “whats missing” filter, but also the “could this be a company” filter. These filters could filter out a lot of good ideas that might not look viable at the surface level – and it can also cause you to focus on the bad ideas. The other filter you need to turn off is the “taking things for granted” filter. Our minds automatically filter the things we don’t need to notice just to keep us sane and on task. Taking this in another direction, you should also focus on things that chafe you. When you take the status quo for granted, you not only make life more efficient, but it also makes life more tolerable. “When something annoys you it could be because you’re living in the future.” When you do find the right sort of problem, you should probably be able to describe it as obvious- at least to you. Don’t sit around and try to think of ideas – instead work on hard problems that are driven mainly by curiosity, and take note of gaps and anomalies. Another good way to trick yourself into noticing ideas is to work on projects that seem like they’d be cool. – you will naturally tend to build the things that are missing. Graham gives an altered version of his quote above: “live in the future and build what seems interesting”
School. Entrepreneurship is something best learned by doing it. When you are in college you should be spending your time learning the waves of the future. It is also good to study multiple domains: if you start in programming , then learn another field like accounting, physics, marketing, etc. you will see the opportunities you can help solve in those fields since you have tools in your programming toolbox.
Competition. Don’t be afraid of the competition – it is very rare fro startups to be killed by the competitors unless they have some lock-in feature that keeps customers there. You should be able to do some quick Google search to see what the competition is: who is in it, what are their capabilities compared to what you are trying to do, etc. It is common for inexperienced founder to give their competitors more credit than they deserve. You don’t need to worry about a crowded market, you DO need to know your competition, and what they are missing. A crowded market usually means that nobody has come up with a good enough solution to dominate the market. There are 2 ways to break into market: Enter small market, monopolize, expand; Enter crowded market with a secret weapon.
More Filters. There are two more filters you need to turn off when thinking of ideas: the unsexy filter and the schlep filter.
- Schlep filter: do things other people don’t want to do – the pain in the ass or tedious projects. They are usually not as bad as they seem (Stripe example of not wanting to deal with payments)
- Unsexy filter: keeps you from working on the problems you despise rather than the ones you fear. The unsexy filter is not completely worthless since if you ware going to be at the leading edge of a field that is rapidly changing your ideas about what is sexy will usually translate to what is valuable. Also, if an idea is sexy, you will be more likely to work on it more enthusiastically.
Recipes. It is much better to ‘notice’ ideas organically, but if you really need a recipe, you need to be able to filter out the bad ideas much better. Here are some tricks/tips:
- Look where you have some expertise. Your expertise raises your standards.
- Look at the things you need
- In your previous job, did you ever find yourself saying “why doesn’t someone make x?”
- It is easier for people in their teens and early twenties because they understand their peers and up and coming technology.
- Try finding gaps in the world: what is tedious or annoying?
- Talk to people about their work – let it get general, try to get something to spark a thought
- Seek out ideas that are unsexy or involve schleps
- Make something unsexy that people will pay you for
- Replacement tech usually comes in from the side: don’t look for the replacement of X, look for what is there and will later become the replacement for X. (example was journalism – Traditional journalism is dying, what replaces it will probably come from within the industry but will not look like journalism in its form today)
- Think about what new things will be possible in the new world we’ll have in a few years. Stay on the edge of the future technologies to have a close pulse
Organic. If you are on the edge of some rapidly changing field you don’t have to look for the wave; you are the wave. If you have the right background, good startup ideas will seem obvious to you. Be patient, it will take time to come across situations where you notice something missing. Once again the quote: “live in the future and build what seems interesting. Strange as it is, that’s the real recipe”