
How to pick startup ideas (2015) - tosh
http://www.defmacro.org/2015/02/25/startup-ideas.html
======
rdtsc
Here is what I have seen happen and work quite effectively.

\- Find a bunch of investors (that is anyone with lots of disposable cash)

\- Befriend them. Use the 'How to Win Friends and Influence People' techniques
on them.

\- Come up with any idea, doesn't matter what it is at that point, could be
"Uber For Dogs" or "Bitcoin Microloans for Clowns" ...

\- Get the cash for the startup. Rent an office. Put CEO on your title. Enjoy
playing CEO for 5 years.

\- Rinse, repeat.

\- In the process make sure to go to every single meetup, and conference and
hand out business cards with your title on it as "CEO"

\- As soon as any new framework comes around, re-write everything in it. Then
write a blog post "We switched from X to Y". Convince said investors that this
is a crucially important / strategic priority if they start questioning your
methods.

\- After blog is written add title "author" next to "CEO".

~~~
danieltillett
This is why in my angel investing (I really hate the term angel) I try to
avoid just investing in people I like.

It is not that I want to work with people I dislike, but that if I like them
other people probably do and if they are all investing on the basis of how
much they like the founders then the price will be higher.

~~~
codyZ
Coincidentally, in my research paper, it's found that one of the deciding
factors that VCs and Accelerators choose/invest in companies is actually how
much they 'like' people or founders

~~~
danieltillett
Yep. I can understand the appeal of wanting to invest in people you like
because you will be spending a lot of time with them. It would not be so bad
if who people liked was random, but it is not - we all tend to like the same
people.

Investing is quite like dating in that it is not always best to just go the
for the hottest guy/girl in the room.

------
misiti3780
I just finished "The Originals" and he basically has a whole chapter on how
first movers advantage is bullshit.

Taken from the book:

* Studies show this does not exist

* Since market is more defined when settlers enter, they can focus on providing superior quality instead of deliberating about what to offer in the first place

* Risk seekers are drawn to being first, and they're prone to impulsive decisions. Risk-adverse entrepreneurs watch from the sidelines, waiting for the right opportunity and balancing their risk portfolios before entering.

* Failure rates aof 47%/8% (first movers / settlers)

~~~
CalChris
Case in point: Google was not a first mover. More like 21st.

[https://en.m.wikipedia.org/wiki/Web_search_engine](https://en.m.wikipedia.org/wiki/Web_search_engine)

~~~
frandroid
But Google was the first mover with its way of sorting the data from web
pages, by building PageRank.

~~~
mandeepj
> But Google was the first mover with its way of sorting the data from web
> pages, by building PageRank.

That was better execution

------
sergiosgc
Two very strong counterarguments should be made:

1) Going for analysis of ecosystem evolution and trying to predict new
business avenues from there leads to "too-early" failure cases. Lots of
startups fail because they were too early to the market. More startups fail
because there is no market than because the market is crowded, and arriving to
a market before it exists is probably the worse form of failing because of
market absence.

2) First mover advantage is not that much of an advantage. It is important,
but lots of unicorns are second movers. Comments here already highlight a few,
I'd like to add Apple. Apple mostly refined products that were already in the
market and profited handsomely from that (no negative tone here, pretty much
the opposite).

------
Dowwie
A professor at Darden, Saras Sarasvathy, has been teaching and advancing the
study of entrepreneurship for some time now, with emphasis of her studies on
what is known as _effectuation_.

You may find this useful:

[http://effectuation.org/](http://effectuation.org/)

overview:
[http://www.effectuation.org/sites/default/files/documents/ef...](http://www.effectuation.org/sites/default/files/documents/effectuation-3-pager.pdf)

~~~
projektfu
It's interesting that this concept has been submitted a few times to no
discussion. Not even to say it's BS, which is weird for HN.

~~~
Dowwie
I posted it, without my opinion. You responded without providing your opinion,
also. :)

~~~
projektfu
I take most of this literature skeptically and I haven't had a chance to dive
into this site much. But if the five things in the article are actionable and
they work, it could be useful.

------
gipp
Am I the only one who feels this is the wrong question to be asking? Having
the goal of "creating a startup" leading to the search for a problem seems
backwards. Entrepreneurship happens (or should happen) as an _effect_ of the
struggle to solve a problem.

~~~
doc_holliday
Yes, I think startup for the sake of startup can lead to all manner of bad
ideas. It's the reason why you have a lot of companies solving things that
aren't actually problems.

Are there many examples of startups for the sake of startups that succeeded?

~~~
throwaway13337
I've known three people personally who created companies in an area they
didn't really care about but they thought there was an opportunity and
succeeded.

I've known a lot more that start companies in things they're passionate about
(e.g. video games) and struggle.

The feel good mantra of our time is damaging. It certainly was to me.

~~~
doc_holliday
I agree, finding a problem that is actually a problem (even if you aren't
"passionate" about it) can work.

But I think that is the main point, seeing something that is an oppurtunity.

I was more reffering to people who "play startup" for startups sake, because
it is cool or the done thing.

If there is oppurtunity and solution you don't need to be passionate
generally.

------
inthewoods
Lost me by continuing to advocate for first mover advantage where we just have
a ton of examples where that wasn't true.

~~~
pascalxus
Don't get too hung up on the term "first-mover".

I don't think he's necessarily referring to the very first start up a
particular space. Everything he's saying is basically true, if you think of
"first-mover" as the first company to dominate, which usually tends to happen
within the first 1 to 2 years of when a particular product/idea becomes
feasible.

The point of the article is not "first mover". The point is that opportunities
get taken and gobbled up as soon as they are feasible. And once those
opportunities are devoured and a company has a 3 year lead, it's nearly
impossible for new companies to come in, unless they have a significant
differentiation.

~~~
maverick_iceman
First to dominate is rarely the first to start. Also the dominance can be
fleeting instead of permanent. E.g. MySpace was pretty dominant circa 2006-07,
not so much now.

------
danieltillett
Rather than looking for pain as the source of ideas, look for inefficiencies
where you can capture a faction of the value released from using a more
efficient method.

Pain is very subjective, but inefficiencies are quantifiable in dollars and
cents. You don’t have to convince a new customer that your product is
“better”, or will solve their “problem” - you just need to show them how much
money they will save or make. Do this using a method you can protect and it is
hard to fail.

~~~
k__
In the first case you just need a solution that is better than nothing.

In the second case you need to be better than something that exists.

But yes, it is easier to find problems with bad solutions than to find
problems without any solution.

~~~
danieltillett
What is not easy is finding good solutions that increase efficiency.

------
pascalxus
And, let's not forget. The first mover can acquire his users much more cheaply
than anyone else coming in at a later date. This is because, the first users,
the fore-runners who try new products more easily are usually the cheapest to
acquire users. Just like digging for oil, every subsequent user increases in
cost to acquire.

While we're on the subject, if you're looking to acquire highly targeted users
on twitter, check out
[http://www.find70.com/?t=hnw](http://www.find70.com/?t=hnw) Target users by
the accounts they follow, their twitter bios, their follower counts, and lots
of other filters.

------
amelius
I often think HN misses cross-pollination with disciplines other than software
engineering. Most programming solutions I see on HN are solutions for problems
that developers have. For example, a CSS compiler, or a service for displaying
statistics of cloud server usage.

I'm not sure how it would work, but I guess it would be nice to have a forum
or database where problems from other fields would be discussed with
developers. Such that an informal requirements analysis would result for each
problem. And perhaps even designers could participate, and create mock-ups of
the UI, et cetera.

I guess I just formulated a startup idea :)

~~~
conductr
[https://web.archive.org/web/20151219233805/http://assembly.c...](https://web.archive.org/web/20151219233805/http://assembly.com/)

Sounds like the defunct assembly

------
contingencies
_the solution is to stop thinking of startup ideas in terms of solving
problems in the early stages of startup germination, and instead start
thinking in terms of changes in the economic environment and the opportunities
these changes unlock_

Agreed.

The whole 'pick problem of others', 'solve problem of others' mindset
perversely maintains the appearance of a rigidly analytical, deductive line of
thought and yet _completely fails_ when applied to a wide swathe of potential
businesses, unless hammered in to a contorted mess at which point it fails to
hold water.

------
unabst
If you have a unique or novel idea/technology/angle, then great. But whether
you succeed will depend on your entrepreneurial prowess, your team, and your
resources. As long as you're the better entrepreneur, having your idea stolen
is almost welcomed. It's genuine validation, and the highest form of
compliment. Competition is free advertising and guaranteed market growth based
on a greater combined effort to sell the same service or product. The better
entrepreneur will win, and if you're not, then you're screwed anyway.

Be it energy drink, search engine, or Mars, the most important piece is the
guy who sees a reason to do it. These ideas bordered on stupid, and they're
burglar proof. But they're Red Bull, Google, and SpaceX.

The point is, the first idea doesn't really matter. Entrepreneurs practically
need an idea a day to get over all of their problems. Startups are like horse
races, in that speed and momentum matter. But if you're stuck on the first
idea, you're banging against the gate that hasn't even opened yet.

------
stcredzero
_Much like the biological environment, the economic environment isn’t static._

This is the one thing that "evolution debunkers" consistently get wrong. So
many of their arguments are predicated on a static fitness function, when such
a concept is clearly nonsensical. (And so far, not a single one of them has
ever been able to even comprehend this enough to formulate an actual response
to this observation.)

I wonder if there's something analogous that goes on with some people's
startup debunking?

------
comments_db
Like

"...how is the world changing and what can I do about it? Only once you
identify an environmental change and make sure you’re not late to market..."

"...There are no formulas to learning about changes early, but you can put
yourself in a position to get unique insight. For example, you can learn about
changes early because of your job or hobbies..."

"...Sometimes your unique background can make you aware of changes that other
people can’t see..."

------
k__
1\. Find where people meet to talk about a specific topic

2\. Look what problems they have with that topic

3\. Think about how you could solve this problem

------
jv22222
At [http://nugget.one](http://nugget.one) we simply ask 1000's of people if
they have a problem that can be fixed by software to tell us about it.

That seems to be a pretty great way to uncover lucrative startup ideas in
markets that you never could have imagined.

~~~
personjerry
Except that most people don't think of their lives as "problems", not "big
problems" (more like little annoyances), and definitely not "problems that can
be fixed by software".

Source - had same idea, surveyed 50 random people on the street.

~~~
pascalxus
But, by interviewing them, they might be able to find those annoyances and
those problem areas. A skilled interviewer could probably find potentially
solvable problems, that others may not have considered.

------
blackflame7000
The premise here seems flawed. It completely ignores the fact that some of the
most successful startups were companies that did something new and ingenious
regardless of what they thought about the market place. Sometimes the world
doesn't know what it wants until it sees it.

------
logicallee
The author opens on a note so obviously and completely wrong that I had
trouble even following their train of thought. It would be like me opening a
blog post on dating by saying, "One of the most important things I have
learned from (whatever) is: there are no single women, aged 18-44, and the
sooner you accept this, the sooner you can (whatever)."

This is obviously so completely wrong that it really made me think, why would
the author write this?

This is what I'm talking about:

>One of the most important things I learned from running a startup is that on
a macro scale the innovation market is efficient. If the market conditions
allow for a startup to arise, it’s overwhelmingly probable that multiple
startups already exist in that market. The converse is also true — if there
are no startups in a given market, it’s overwhelmingly probable that market
conditions are not hospitable and startups cannot arise.

>In this sense startups are similar to biological life. Wherever the
conditions are hospitable, life already exists. The difference is that
startups live in an economic rather than a biological environment.

I can't even put into words how wrong this seems to me. Well, let's start with
the biological example: there are LOTS of examples of invasive species, where
someone brought a species over (on a ship etc) and then that species invaded
the whole continent. So, by the author's analogy, the "wherever the conditions
are hospitable, life already exists" \-- so wherever the conditions were
hospitable to the invasive species, it already existed. But this is
counterfactual. It's simply not true.

So biologically the author is simply wrong. Okay, so in the analogy the new
species, is like "an idea" \- so when you bring it somewhere, the author is
saying it must have already existed, but that's plainly false.

Next I re-read their intro very very carefully "If the market conditions allow
for a startup to arise, it’s overwhelmingly probable that multiple startups
already exist in that market".

Could it mean that they simply mean something very different by "market" from
what I meant?

The only thing that I can think of is that the author is talking about well-
defined markets with a lot of existing action. So that when you talk with a
VC, they've already heard of five other startups are that are doing the same
thign. When you do an addressable market analysis, you already have five other
competitors who are moving products, and you can use their sales figures as
proxies.

In that sense, "market" makes sense.

So the conclusion I have come to (I didn't read further I'm afraid) is that
this author must be talking about entrepreneurs with no innovation,
creativity, or the creation of anything new - who are simply picking something
from what's "out there" to work on.

Is this fair? What are your thoughts here?

~~~
davidivadavid
Except the author specifically mentions he's talking about innovation. I'm not
sure what's so hard to believe about the idea that many people come up with
the same "innovative" ideas at the same time. There are numerous historical
examples.

~~~
logicallee
surely you agree there are also numerous historical counterexamples?
(innovations only done in one place or by one person/team and not being done
anywhere else in the world at that time?)

~~~
davidivadavid
Probably. I would wager modern information diffusion means they'll become less
and less common.

------
HiroshiSan
In the first paragraph by converse does the author mean contrapositive? Or is
this the same meaning in English?

------
soham
tl;dr for me: _You’ll need to think deeply about the world and invest years of
concerted effort into building a good intuition for thinking about the future.
Even then you’ll be right only a fraction of the time. But you can still get
much better than random chance._

------
Animats
His reading list, especially Postman, is much more useful than what he has to
say.

------
ascavalcante80
The link seems to be broken now...

------
neom
See a problem. Figure out how many people it is a problem for. Figure out why
no one else has solved that problem. Figure out if you know how to solve the
problem. Figure out how much folks would be willing to pay for a solution to
the problem. If you asses you are able to be fairly compensated (over long
periods of time) for solving the problem after all your costs of solving it
are reconciled: Commit to spending vast amounts of your resource to exploring
and productizing the solution to said problem. This isn't the advice the
author gives. However, here is another post written by the same author:
[https://rethinkdb.com/blog/rethinkdb-
shutdown/](https://rethinkdb.com/blog/rethinkdb-shutdown/)

~~~
karimdag
I'm favoriting the post just for this comment. Thank you kind sir.

~~~
nostromo
You can click on the comment's timestamp and then click "favorite."

(Pro tip: this is also how you flag a comment.)

------
troopkevin
The best way is to locate a problem or pain point in your daily life, and find
a clever easy way to solve that problem. Copying or improving other product
will destine to fail.

~~~
asurachadtrot
As simple as that.

------
miguelrochefort
The idea you pick doesn't matter as long as you keep it a secret for as long
as possible.

/s

