How to Get and Evaluate Startup Ideas
The 4 Most Common Mistakes Founders Make
Not solving a real problem - solution in search of a problem
If people don’t really care about your problem, they won’t really care about your solution
Find a super high quality problem
This doesn’t have to be a huge global/abstract problem – it should be a bit more specific
Getting stuck on a “tarpit idea” - common startup ideas - it's like getting stuck in tar. They never get anywhere
Causes:
Widespread problem that lots of founders encounter
Seems like it could be easily solved
There’s a reason why it hasn’t been solved yet
Not evaluating an idea
Waiting for the perfect idea
“You should think of your idea as a good starting point. Startup ideas morph over time.” - Paul Graham, YC Coordinator
10 Key Questions To Ask About Any Startup Idea
Do you have a good founder/market fit?
Are you the right team to work on this idea?
Pick a good idea for your team. Not for a different team.
How big is the market? You need a big one.
Ones that are big now
Ones that are small now, but are rapidly growing
How acute is the problem?
If the alternative to your solution is literally nothing, then you have a good problem.
Do you have competition?
Competition is a good thing, but you need a new insight on the problem.
Do you want this?
Did this recently become possible or necessary?
New change means new opportunity. Look for that.
Are there any good proxies for this business?
A proxy is a company that does something similar to your company somewhere else.
Is this an idea you’d pursue for years?
Best startups come in boring spaces usually…but running a successful business is something you’d pursue.
Is this a scalable business?
For software this is an insta yes, but with service agencies, evaluate this more carefully.
Is this a good idea space?
An idea space is one level of abstraction out from a particular startup idea.
Like a subclass of a larger genre
Some idea spaces have different interest/hit rates
One that you expect is going to have a reasonable hit rate as a startup
Three things that make startup ideas seem bad, but actually make them good
Ideas that are…
Hard to get started - Read about Stripe
Boring space - Boring ideas have a lot higher hit rate than fun ideas – boring ideas get left on the table
Existing competitors - most good startup ideas have existing competitors – they often find out that the reason why there are no existing competitors is because no one cares about the problem
But, if you are savvy about ideas, this means that a competitive environment is a better one. Find issues with others and find why people aren’t satisfied. Find an insight that other companies haven’t.
The best way to think of startup ideas is not to sit in a room alone thinking about, well, startup ideas.
The best way to think of startup ideas is to just notice them organically. These are more likely to be good startup ideas. Here’s how to do this:
Become an expert on something valuable
Work at a startup
Build things you find interesting
4 Ways for Generating Startup Ideas (in order of how likely they are to lead to actually good ideas)
The first (and best) one:
Start with what your team is especially good at and ideas that take advantage of your expertise
Automatically has good founder/market fit
Second: Start with a problem you’ve personally encountered. Ideally one that you’re in an unusual position to see.
Think of every job you’ve ever had (internships + life experiences)
What problems or opportunities have you been in a special position to see?
Third: Think of things you personally wish existed.
Doordash: Undergrads at Stanford wanted to order food and get it to their dorm, so they made it
But stop and think: Is there a reason why this doesn’t exist?
Fourth: Go talk to people and see what problems they have. Go find an idea space and find people in that idea space. Get advice on what ideas are actually worth pursuing.
Pick an idea space
Go to the place of interest and talk to potential users
Talk to other founders in the industry of industry
Evaluate several ideas before picking one
