Startup Ideation

Dated Jul 5, 2020; last modified on Thu, 02 Sep 2021

How to Get Startup Ideas

Err on the side of having competitors, but make sure that you have a thesis that everyone else is overlooking, e.g. Google wasn’t averse to users leaving google.com ASAP.

The Startup Idea Matrix, ( B2B Edition , B2C Edition ) is a good start for knowing who to google.

Big companies tend to be slow at changing their approach. You’d think that Yahoo! would clean up their landing page the moment they realized Google was becoming a dominant search engine.

Take classes in different areas in lieu of taking entrepreneurship classes. Chances are that there are problems ripe for a software approach.

Sure, ideas are a dime a dozen, but I don’t think well-researched and thought-out ideas are. Knowing all the CS in the world doesn’t help if you don’t have a good problem statement to apply it to.

Don’t try to think of startup ideas. Instead, notice problems that you’re facing yourself. Be an expert in that market.

Live in the future. Strive to notice what is currently missing, e.g. PG in the 90s noticed that hand-built online stores of custom HTML pages would have to be generated by software soon.

Living in Seattle sort of helps me guess what Kenya’s tech-laden future may hold. For instance, retailers like CVS have lots of loyalty programs. At some point, won’t Kenya’s retailers need those? After all, those retail programs aim to increase customer loyalty and drive sales - and Kenyan retailers should care about that too.

Work on projects that seem like they’d be cool. Things that already exist won’t seem as interesting to build.

Between something that has a large # of people want a small amount and something that a small # of people want a large amount, go for the second.

Do Things That Don’t Scale

Recruit manually. Don’t send links. Set them up on the spot.

Ask how big the startup would be if you did the right things, not whether you’re currently changing the world.

Delight your initial customers. Tim Cook can’t send handwritten notes, but you can.

If you can solve the problem manually, do so while gradually automating the most pressing bottlenecks. Saves you from having solutions in search of problems.

Why I Love B2B Over B2C

Atrium, founded by , shut down after “failing to figure out how to deliver better efficiency than a traditional law firm”. Some months prior, Atrium let its in-house lawyers go after they proved too expensive.

B2B customers will actually pay for your product. You have a clear execution path - they’ll tell you and pay for features. Companies don’t quickly flip flop between products. Consumers are too price sensitive and finicky.

B2B customers are rational, and thus understandable. They care about whether a solution solves their problem and if the solution is important enough to pay for.

B2C is a gamble that requires riding a wave, e.g. Google rode the early internet adoption wave that created a ballooning amount of information. The outcomes for B2C generally follow a power law distribution.

Understanding B2C is a different ball game. FB is still tweaking its newsfeed and rotating the content types, e.g. open-graph items, live streams, video, etc.

The Average Age of a Successful Startup Founder is 45

There’s a variation among industries: software tends to 40, while oil/gas/biotech tends to 47.

Even Gates, Jobs, Bezos, Brin & Page had their growth rates peak when they were middle aged.

Different definitions of success, e.g. employment growth, sales growth, IPO/acquisition, came to the same conclusion.

VCs may not be looking for growth potential. Younger cash-strapped founders are more likely to cede to VCs at a lower price.

Factors at play? Work experience, financial resources, deeper social networks?

References

  1. How to Get Startup Ideas. Paul Graham. http://www.paulgraham.com/startupideas.html . Nov 1, 2012.
  2. Why I Love B2B over B2C. Justin Kan. https://www.atrium.co/blog/b2b-vs-b2c/ . Jul 11, 2018.
  3. $75M legal startup Atrium shuts down, lays off 100. Josh Constine. https://techcrunch.com/2020/03/03/atrium-shuts-down/ . https://news.ycombinator.com/item?id=22479886 . Mar 3, 2020.
  4. Do Things That Don't Scale. Paul Graham. http://www.paulgraham.com/ds.html . Jul 1, 2013.
  5. The Average Age of a Successful Startup Founder is 45. Pierre Azoulay; Benjamin F. Jones; J. Daniel Kim; Javier Miranda. https://hbr.org/2018/07/research-the-average-age-of-a-successful-startup-founder-is-45 . Jul 11, 2018.