Brief Summary
This video is all about how to find a promising startup idea. It covers common mistakes founders make, key questions to ask to evaluate an idea, and practical recipes for generating new ideas. The main takeaway is that a good startup idea isn't just about the idea itself, but also about founder-market fit and solving a real, acute problem.
- Avoid solutions in search of problems.
- Focus on problems you or your team are uniquely positioned to solve.
- Don't be afraid of boring spaces or existing competition.
Finding a Promising Idea
The video aims to provide conceptual tools for thinking about startup ideas effectively, similar to how YC does. It highlights that while no one can guarantee success, certain ideas are more likely to succeed. The key is to stack the deck in your favor by starting with a promising idea. Success depends on both the initial idea and how well you execute it.
Where Does This Advice Come From?
The advice shared in the video is based on multiple sources. It includes analysis of the top 100 YC companies by valuation, examining how they came up with their ideas. It also draws from Paul Graham's essay "How to Get Startup Ideas." Additionally, it incorporates lessons learned from helping YC companies pivot and from reviewing thousands of YC applications, identifying common mistakes that lead to bad ideas.
4 Most Common Mistakes
The most common mistake is building something that doesn't solve a real problem for users, often referred to as a "solution in search of a problem" (CISP). For example, applying AI to a problem just because AI is cool, rather than starting with a genuine problem. Another mistake is getting stuck on "tar pit ideas," which are common startup ideas that seem easy to solve but have structural reasons why they're difficult. An example is creating an app to make meeting up with friends more efficient. Founders also jump into the first idea without considering if it would make a good business, or wait for the perfect idea, which doesn't exist.
10 Key Questions to Ask About Any Startup Idea
To evaluate a startup idea, ask these questions:
- Do you have founder-market fit? Are you the right team to work on this idea?
- How big is the market? Does it have the potential to be a billion-dollar market?
- How acute is the problem? Is it a problem that people care enough about?
- Do you have competition? Most good startup ideas have competition.
- Do you want this personally? Do you know people personally who want this?
- Has this only recently become possible or necessary?
- Are there proxies? Is there a large company that does something similar but isn't a direct competitor?
- Is this an idea you'd want to work on for years?
- Is this a scalable business?
- Is this a good idea space? Does it have a reasonable hit rate for new startup ideas?
3 Things That Make Your Startup Idea Good
Three things that might make a startup idea seem bad but actually make it good are: ideas that are hard to get started, ideas in a boring space, and ideas with existing competitors. Ideas that are hard to get started often scare off other founders, leaving them open for smarter founders. Boring spaces, like payroll software, are often overlooked, leading to higher success rates. Existing competitors can indicate a real market need, especially if they all seem to have missed something.
How to Come Up With Startup Ideas
The best way to have startup ideas is to notice them organically, rather than explicitly trying to think of them. To set yourself up for future success, become an expert on something valuable, work at a startup, or build things you find interesting, even if they're not clearly startup ideas.
7 Recipes for Generating Startup Ideas
Seven recipes for generating startup ideas:
- Start with what your team is especially good at.
- Start with a problem you've personally encountered.
- Think of things you personally wish existed.
- Look for things in the world that have changed recently.
- Look for companies that have been successful recently and find new variants on them.
- Talk to people and ask them what problems they have.
- Look for big industries that seem broken.
A bonus recipe is to find a co-founder that already has an idea. Remember that it's often hard to tell if a startup idea is good or not, so the best way to know for sure is to just launch it and find out.
