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I have an odd question that has stopped me from applying from most incubators to date (although it may also be too early as well)...

If my idea is very specific to an industry because that's what I'm interested in pursuing but would require developing applications that would benefit almost all general industries conceivably, is that considered good or bad?

For example, my company is only looking to be a player in the legal information industry but the base application I've designed would work just as well for any industry where text analysis is useful.




That's actually a good sign in a startup. Ideally you want to start by solving a small number of people's problems very thoroughly, and then expand the number of people whose problems you solve.


That's a piece of advice I keep hearing all the time, but I think it can be dangerous.

Of course, you have to start small - there usually isn't a choice not to. But, I think it's best to have a product which can serve a huge market in its most basic form without adding more features.

There are very few examples of startups which start with a product with features highly specific to one group of users and then expand out successfully to a huge market. Most startups die or get stuck in a vertical.


  >> There are very few examples of startups which start 
     with a product with features highly specific to one 
     group of users and then expand out successfully to 
     a huge market. 
There are very few examples of startups when successfully address a huge market with any strategy.

Succeeding in a vertical is a positive step, which most startups fail at. For one thing, it give you enough money to keep trying for a larger success.


This shouldn't be a deterrent for any incubator per se. The value of your idea will purely depend on the size of the market in dollars that you're planning to attack. YC is an investment business where they make bets for the maximum return, so if the outcome of your focus realistically means your business would top out at a million dollars a year in revenue, then no, they won't be interested. You'll need to compete on estimated ROI with all the other applicants which basically boils down to projected return and percent chance of success. If you're attacking a somewhat smaller market, but your chance of success seems very high, then they will be just as interested.

If you haven't already, get a book that talks about estimating startup value, and then create some rough numbers.


Out of curiosity, why only the legal industry? I understand a narrow focus might make sense starting out from a marketing point of view, but if you have some new technology that could benefit multiple industries, why not pitch it more broadly. Something like: 'We plan on selling to the legal market first which is worth X billion dollars, after finding success there this technology can be applied to markets Y and Z - together they spend Q billion dollars on software annually?'


Well like I said that's all I am interested in personally. If my cofounders or funders wants to take it in other directions after it's developed that's fine and I wouldn't stop them but I know what I want to do and I think it's sustainable an idea in the legal information area alone (just look at westlaw/lexis/bloomberg).




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