Getting Startup Ideas

Surprisingly, the way to get startup ideas is not to try to think of startup ideas. However, it's to look for problems, preferably problems you have yourself.

The very best startup ideas tend to have three things in common: they're something the founders themselves want, that they themselves can build, and that few others realize are worth doing.

Microsoft, Apple, Yahoo, Google, and Facebook all began this way.

Solving Problems

As obvious as it might sound, one should work on problems that do exist! The reason we’re pointing this out is because the most common mistake that startups make is to solve problems that no one has.

Meaning, people start to think of startup ideas that won’t solve anybody’s problems. They come up with ideas that sound reasonable enough to fool them into working on them. The kind of ideas are commonly referred to as “sitcom” or “made-up” startup ideas.

For example, a social network for pet owners. Sounds good right? Millions of people have pets. It would be interesting for many of these people to have a platform where they could get to know and talk to other pet owners. Not all of them perhaps, but if just 2 or 3 percent were regular visitors, you could have millions of users. You could serve them targeted offers, and maybe charge for premium features. 

The danger of an idea like this is that when you run it by your pet-owner friends, they don't say "I would never use this." They say "Yeah, maybe I could use something like that." Even when the startup launches, it will sound plausible to a lot of people.

They don't want to use it themselves, at least not right now, but they could imagine other people wanting it. If this reaction was to be across the whole population, you’d end up with zero users.

Types of Startup Ideas:

Startup ideas usually fall into 2 types:

·       The first Type: Building a startup based on an idea that a big number of people want just a little bit.

·       The Second Type: Building an idea that a small number of people want but a lot.

You’d always want to go with the second type. However, not all ideas of that type are good startup ideas, but nearly all good startup ideas are of that type.

“Made-up” startup ideas are usually of the first type.

It would be worth mentioning that nearly all successful startup ideas are of the second type. Let’s take Microsoft as an example. There were only a few thousand Altair owners when they first came up with the Altair Basic idea. Before this software, they used to program in machine language. 30 years later, Facebook had the same shape- the first platform they made was exclusively for Harvard students, who weren’t a large number, but they really found it useful.

Questions to ask yourself when you have an idea for a startup:

1.  Who wants this right now?

2.  Who wants it so much that they’ll still use it even when it’s a lousy version made by people that they’ve never heard of?

If you don’t have answers to these two questions, then your startup idea is probably a bad one.

Imagine a graph whose x axis represents all the people who might want what you're making and whose y axis represents how much they want it. If you reverse the scale on the y axis, you can envision companies as holes.

Google is a huge crater: hundreds of millions of people use it, and they need it a lot. A startup just starting out can't expect to make that much volume. So, you have two choices about the shape of hole you start with: You can either dig a hole that's broad but shallow, or one that's narrow and deep, like a well.

You don't need the narrowness of the well- It's depth that you need. You get narrowness as a byproduct of optimizing for depth (and speed). But you almost always do get it.

In practice, the link between depth and narrowness is so strong that it's a good sign when you know that an idea will appeal strongly to a specific group or type of user.

But while demand shaped like a well is almost a necessary condition for a good startup idea, it's not a sufficient one.

If Mark Zuckerberg had built something that could only ever have appealed to Harvard students, it wouldn’t have been a good startup idea. Facebook was a good idea because it started with a small market that there was a fast path out of. Colleges are similar enough that if you build a Facebook that works at Harvard, it will work at any college. So, you spread rapidly through all the colleges. Once you have all the college students, you get everyone else simply by letting them in.

Likewise for Microsoft: Basic for the Altair; Basic for other machines; other languages besides Basic; operating systems; applications; IPO.

Path or No Path?

How do you know whether there's a path out of an idea? How do you know whether something is the germ of a giant company, or just a niche product? I’ll tell you: Usually you can't.

Let’s take Airbnb as an example: The founders didn't realize at first how big a market they were targeting. Initially they had a much narrower idea. They were only going to let hosts rent out space on their floors during conventions. They didn't foresee the expansion of this idea; it forced itself upon them gradually. All they knew at first is that they were onto something.

That's probably as much as Bill Gates or Mark Zuckerberg knew at first too.

Occasionally, it's obvious from the beginning when there's a path out of the initial niche. Sometimes You’d see a path that's not obvious right away; but there are limits to how well this can be done, no matter how much experience you have.

The most important thing to understand about paths out of the initial idea is the meta-fact that these are hard to see.

So, if you can't predict whether there's a path out of an idea, how do you choose between ideas? The truth is disappointing but interesting: If you're the right sort of person, you have the right sort of hunches. If you're at the leading edge of a field that's changing fast, when you have a hunch that something is worth doing, you're more likely to be right.

In Zen and the Art of Motorcycle Maintenance, Robert Pirsig says: “You want to know how to paint a perfect painting? It's easy. Make yourself perfect and then just paint naturally.”

Not sure that his advice is specifically for painting, but it makes sense in the startup situation.

Being at the leading edge of a field doesn't mean you have to be one of the people pushing it forward. You can also be at the leading edge as a user.

Mark Zuckerberg was a programmer, so Facebook seemed like a good idea to him because he used computers so much. However, If you'd asked 40 year old’s back in 2004 whether they'd like to publish their lives semi-publicly on the Internet, they'd have been horrified at the idea. Mark already lived online; so to him it seemed natural.

Paul Buchheit sees that people at the leading edge of a rapidly changing field "live in the future." If you combine that with what Pirsig said, you get a quote that says: “Live in the future, then build what's missing.”

That describes the way many, if not most, of the biggest startups got started. Neither Apple nor Yahoo nor Google nor Facebook were even supposed to be companies at first. They grew out of things their founders built because they saw what seemed to be a gap in the world.

Hypothetically, when Bill Gates and Paul Allen hear about the Altair they’d think "I bet we could write a Basic interpreter for it." When Drew Houston realizes he's forgotten his USB stick he thinks "I really need to make my files live online."

Lots of people heard about the Altair. Lots forgot USB sticks. The reason those stimuli caused those founders to start companies was that their experiences had prepared them to notice the opportunities they represented.

The verb you want to be using with respect to startup ideas is not "think up" but "notice." Ideas that grow naturally out of the founders' own experiences are called "organic" startup ideas. The most successful startups almost all begin this way.

If you're not at the leading edge of some rapidly changing field, you can get to one. For example, anyone reasonably smart can probably get to an edge of programming within a year. Since a successful startup will consume at least 3-5 years of your life, a year's preparation would be a reasonable investment. Especially, if you're also looking for a cofounder.

You don't have to learn programming to be at the leading edge of a domain that's changing fast. Other domains change fast. As Marc Andreessen put it: “software is eating the world, and this trend has decades left to run.”

It's even better when you're both a programmer and the target user, as this will allow the cycle of generating new versions and testing them on users to happen inside one head.

Noticing Ideas

You’re now living in the future somehow, and the way to notice startup ideas is to look for things that seem to be missing. If you're at the leading edge of a rapidly changing field, there’ll be things that are obviously missing. So, if you want to find startup ideas, don't just turn on the filter "What's missing?", also turn off any other filter, particularly: "Could this be a big company?".

Generally, most things that are missing will take some time to see. You almost have to trick yourself into seeing the ideas around you.

If you're really looking for startup ideas, you can sacrifice some of the efficiency of taking the status quo for granted and start to question things:

·       Why is your inbox overflowing? Because you get a lot of email, or because it's hard to get email out of your inbox?

·       Why do you get so much email?

·       What problems are people trying to solve by sending you email?

·       Are there better ways to solve them?

·       Why is it hard to get emails out of your inbox?

·       Why do you keep emails around after you've read them?

·        Is an inbox the optimal tool for that?

The advantage of taking the existing situation for granted is not just that it makes life more efficient, but also because it makes it more tolerable. If you knew about all the things that we'll be getting in the next 50 years, you'd find present day life pretty constraining, just as someone from the present would if they were sent back 50 years in a time machine. When something annoys you, it could simply be because you're living in the future.

Since you’d be needing to loosen up your own mind, it would be best not to make too much of a direct frontal attack on the problem — i.e. to sit down and try to think of ideas. The best plan may be just to keep a background process running, looking for things that seem to be missing. Work on hard problems, driven mainly by curiosity, but have a second self-watching over your shoulder, taking note of gaps and irregularities. 

Give yourself some time. You have a lot of control over the rate at which you turn your mind into a prepared one, but you have less control over the stimuli that spark ideas when they hit it. Always keep in mind that if Bill Gates and Paul Allen had constrained themselves to come up with a startup idea in one month, what if they'd chosen a month before the Altair appeared? They probably would’ve worked on a less promising idea.

Drew Houston did work on a less promising idea before Dropbox: an SAT prep startup. But Dropbox was a much better idea, both in the absolute sense and also matching his skills.

Just as trying to think up startup ideas tends to produce bad ones, working on things that could be dismissed as "toys" often produces good ones. When something is described as a toy, that means it has everything an idea needs except being important. It's cool; users love it; it just doesn't matter. But if you're living in the future and you build something cool that users love, it may matter more than outsiders think.

Microcomputers seemed like toys when Apple and Microsoft started working on them. If you recall that era; the usual term for people with their own microcomputers was "hobbyists." BackRub seemed like an inconsequential science project. The Facebook was just a way for undergrads to stalk one another.

Success

If you can afford to take a long view, you can turn "Live in the future and build what's missing" into something even better:

Live in the future and build what seems interesting.

That's the kind of advice that you’d want to give to college students, rather than trying to learn about "entrepreneurship."

"Entrepreneurship" is the kind of thing that you learn best by practice. The examples of the most successful founders make that obvious. What you should be spending your time on in college is to move yourself up towards the future. College is an excellent opportunity to do that. What a waste it would be to sacrifice an opportunity to solve the hard part of starting a startup — becoming the sort of person who can have organic startup ideas — by spending time learning about the easy part.

For example, if you know a lot about programming and you start learning about some other field, you'll be likely to see problems that software could solve. In fact, you're doubly likely to find good problems in another domain: (a) the inhabitants of that domain are not as likely as software people to have already solved their problems with software, and (b) since you come into the new domain totally ignorant, you don't even know what the current situation is to take it for granted.

Competition

Usually, when you have a good idea you’ll feel that you’re late in implementing it. Don’t let that feeling get to you though. In fact, worrying that you’re late is a healthy thing because it’s one of the signs that your idea is actually a good one.

Browsing the internet to figure out whether your idea is a good one or not will answer your question, and you’re very likely to find someone else working on the same thing. Still, don’t let that get to your head, and hold on to your idea because it’s very rare for startups to be killed by competitors.

If you're not sure, ask potential users. The question of whether you're too late is replaced by the question of whether anyone urgently needs what you plan to make. If you have something that no competitor does and that some users urgently need, you have a beachhead.

Now, the question you need to ask yourself is whether that beachhead is big enough. More importantly, who's in it: if the beachhead consists of people doing something lots more people will be doing in the future, then it's probably big enough no matter how small it is. For instance; if you're building something that’s different from competitors by the fact that it works on phones, but it only works on the newest phones, that's probably a big enough beachhead.

Whether you succeed or not depends more on you than on your competitors. So it’s always better to have a good idea with competitors than a bad one without.

You don't need to worry about entering a "crowded market" so long as you have a thesis about what everyone else in it is missing. Google was that type of idea

A crowded market is a good sign because it means that:

a)  There's demand a

b)  None of the existing solutions are good enough.

A startup wouldn’t want to enter a large market but doesn’t have a competition!

Therefore, a successful startup is either going to be entering a market with existing competitors but armed with some secret weapon that will get them all the users (like Google), or entering a market that looks small but promising to be big in the future (like Microsoft). 

Filters

Two other filters you'll need to ignore if you want to notice startup ideas: the unattractive filter and the schlep filter.

The schlep filter is extremely dangerous. Stripe as an example of a startup that benefited from turning off this filter. Thousands of programmers will relate to this idea; as they knew how painful it was to process payments before Stripe existed. But when they looked for startup ideas, they didn't see this one, because unconsciously they worried about having to deal with payments. And dealing with payments is a schlep for Stripe, but not an intolerable one. They didn't have to try hard to make themselves heard by users, because users were desperately waiting for what they were building.

The unattractive filter is similar to the schlep filter, except it keeps you from working on problems you despise rather than ones you fear.

Turning off the schlep filter is more important than turning off the unattractive filter, because the schlep filter is more likely to be an illusion. And even to the degree it isn't, it's a worse form of self-indulgence. When starting a startup, even if the product doesn't involve a lot of schleps, you'll still have plenty dealing with investors, hiring and firing people, and so on. So, if there's some idea you think would be cool but you're kept away from by fear of the schleps involved, don't worry: any sufficiently good idea will have as many.

The unattractive filter is not as entirely useless as the schlep filter. If you're at the leading edge of a field that's changing rapidly, your ideas about what's attractive will be somehow correlated with what's valuable in practice.

Tricks for Good Startup Ideas

When searching for startup ideas, look in areas where you have some expertise. For example, if you're a database expert, don't build a chat app for teenagers. Maybe it's a good idea, but you can't trust your judgment about that, so ignore it. There has to be other ideas that involve databases, and whose quality you can judge. Do you find it hard to come up with good ideas involving databases? That's because your expertise raises your standards. Your ideas about chat apps are just as bad, but you're giving yourself a Dunning-Kruger pass in that domain.

The place to start looking for ideas is things you need, and there must be things you need.

One good trick is to ask yourself whether in your previous job you ever found yourself saying "Why doesn't someone make x? If someone made x we'd buy it in a second." If you can think of any x people said that about, then you have an idea. You know there's demand, and people don't say that about things that are impossible to build.

Did you discover any needs while working on your idea? Several well-known startups began this way. Hotmail began as something its founders wrote to talk about their previous startup idea while they were working at their day jobs.

The next best thing to an unmet need of your own is an unmet need of someone else. Try talking to everyone around you and let the conversation get general and don't try too hard to find startup ideas. You're just looking for something to spark a thought. Maybe you'll notice a problem they didn't consciously realize they had, because you know how to solve it.

One way to ensure you do a good job solving other people's problems is to think of them as your own.

A good trick for bypassing the schlep and to some extent the unattractive filter is to ask what you wish someone else would build, so that you could use it.

Similarly, since most successful startups generally ride some wave bigger than themselves, it could be a good trick to look for waves and ask how one could benefit from them.

But talking about looking explicitly for waves makes it clear that such recipes are plan B for getting startup ideas. Looking for waves is an essential way to simulate the organic method. If you're at the leading edge of some rapidly changing field, you don't have to look for waves; you are the wave itself.

The best approach is more indirect: if you have the right sort of background, good startup ideas will seem obvious to you. However, it takes time to come across situations where you notice something missing. And often these gaps won't seem to be ideas for companies, just things that would be interesting to build. Which is why it's good to have the time to build things just because they're interesting.

Live in the future and build what seems interesting. Strange as it sounds, that's the real recipe.