This video from Y Combinator's Startup School explains how to get and evaluate startup ideas. It covers common mistakes founders make, such as building a solution without a real problem, getting stuck on "tar pit ideas," and not properly evaluating an idea. The speaker also provides a framework of 10 questions to ask about a startup idea and seven recipes for generating new ideas, emphasizing the importance of founder-market fit and observing real-world problems.
Key Takeaways
1
The most common mistake founders make is building a solution that doesn't solve a real, cared-about problem for users.
2
Avoid "tar pit ideas," which are common problems that seem easy to solve but have structural reasons making them very difficult or impossible for startups to tackle.
3
Evaluate your startup idea by considering 10 key questions, with "founder market fit" being the most important, meaning you are the right team to work on this specific idea.
4
Good startup ideas often appear bad at first because they are hard to get started, are in boring spaces, or already have existing competitors, which scares off other founders.
5
The best way to find startup ideas is to notice them organically, often by becoming an expert in a valuable field or building things you personally find interesting.
6
A highly effective method to generate ideas is to start with what your team is especially good at, leveraging your expertise to create ideas with automatic founder-market fit.
7
Look for problems you've personally encountered, especially those you're in an unusual position to see, as many others might miss these opportunities.
8
Consider how recent changes in the world, like new technologies or societal shifts, might create new startup opportunities.
9
Actively go out and talk to potential customers and other founders in a chosen "fertile idea space" to identify genuine problems worth solving, as exemplified by A to B's approach to the trucking industry.
10
Ultimately, the only way to truly know if a startup idea is good is to launch it and find out.
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[Music]
0:09
all right hello everyone
0:12
I've got a lot of content to get through
0:14
so I'm gonna move fast Buckle in if you
0:17
are looking for a startup idea right now
0:20
I'm going to try to help but more
0:21
importantly I'm going to try to give you
0:23
the conceptual tools to think about
0:25
startup ideas in a sophisticated way the
0:27
way that we think about them at YC
0:29
here's the thing uh no one not even YC
0:32
knows for sure which ideas will succeed
0:34
and in any case if your idea succeeds
0:37
has much to do with how well you execute
0:39
as your initial idea anyway but certain
0:42
ideas are much more likely to succeed
0:44
than others and so my goal here is to
0:47
help you stack the deck in your favor by
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starting with a promising idea the
0:51
advice in this talk came from several
0:52
places first I analyzed the top 100 YC
0:56
companies by evaluation and I looked at
0:58
how they all got their idea so I started
1:00
with some hard quantitative data on how
1:02
recent billion dollar companies actually
1:03
came up with their idea it also draws on
1:06
a classic essay by Paul Graham that I
1:08
really recommend it's called how to get
1:10
startup ideas
1:11
um it also comes from helping YC
1:13
companies that pivot in the middle of
1:15
the batch and learning over the years
1:17
what advice helps them to find a new
1:19
good startup idea
1:21
and then finally it comes from Reading
1:23
thousands of YC applications that we
1:25
rejected and looking at the mistakes
1:28
that caused good Founders to come up
1:29
with bad ideas and those are the
1:31
mistakes I want to help you all avoid
1:33
this Talk's got three parts first I'm
1:36
going to tell you the most common
1:37
mistakes Founders make with startup
1:38
ideas
1:39
then I'm going to talk about how to know
1:41
if your idea is good and then about how
1:43
to come up with new ones okay the four
1:45
most common mistakes with startup ideas
1:47
so the most common mistake is just
1:50
building something that doesn't solve a
1:52
real problem for your users typically
1:54
you can
1:56
articulate the problem that you're
1:57
solving you can put it in words but when
1:59
you actually go and talk to the users
2:01
it's just not something that they really
2:03
care about
2:04
we call it a solution in search of a
2:07
problem or a cisp
2:09
let's go through an example so a lot of
2:11
Founders come up with an idea with this
2:13
kind of thought process they go hmm AI
2:17
is cool what could I apply AI to
2:20
and then they go look for a problem that
2:22
they could solve with AI That's a
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solution in search of a problem and the
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reason it's dangerous is that if you do
2:28
that you'll probably find a problem but
2:30
it will it will be a superficially
2:32
plausible problem it'll be a made-up
2:34
problem that people don't really care
2:35
about rather than a real problem that
2:37
people actually care about
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and if people don't really care about
2:41
the problem they won't really care about
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your solution so instead you want to
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fall in love with a problem
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the best way to find a startup idea is
2:51
to start with a high quality problem now
2:54
Sunrise Founders hear this and they
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decide to interpret that as guidance to
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work on some like huge societal problem
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like I don't know Global poverty or
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something
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um no doubt those are real problems but
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they're they're too abstract to make
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good starting points for startup ideas
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you need something that's more specific
3:10
something that's tractable with a
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startup the next mistake is getting
3:13
stuck on what we call tar pit ideas
3:16
what's a tar pit idea so there's this
3:20
certain set of common startup ideas that
3:22
have been around for forever they have
3:24
been applying inroves to YC batch after
3:27
batch for years and when founders start
3:29
working on these ideas it's like they've
3:31
gotten stuck in tar they never seem to
3:33
go anywhere so we call them tar pit
3:35
ideas here's what causes tarpet ideas
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they all form around some like
3:40
widespread problem that lots of
3:42
potential Founders encounter and it's a
3:44
problem it seems like it could be easily
3:46
solved with a startup but it's an
3:48
illusion there's actually a structural
3:50
reason why it's very hard or impossible
3:53
to solve which is why after all these
3:55
years no one has solved it
3:57
and you can see why ideas like this
3:59
would be so dangerous why they will
4:00
cause so many Founders to waste months
4:02
of their life stuck on a tarpet like
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they're very tantalizing from a distance
4:06
because they're so superficially
4:07
plausible as startup ideas here's a
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concrete example this is a very common
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tarpet idea that's been applied to YC
4:13
for like 20 years this is like the
4:15
stereotypical college student idea and
4:17
it goes like this you think
4:20
man every Friday or Saturday Saturday
4:23
night when I'm making plans to meet up
4:25
with my friends it's so inefficient I'm
4:27
in all these different text threads and
4:29
chat groups and we're like trying to
4:31
make plans to meet up I'm just going to
4:32
make an app to make it more efficient
4:34
Well turns out that there are some
4:36
structural reasons why this idea is hard
4:38
which is why in like 20 years of people
4:40
applying to YC with this idea nobody has
4:42
actually pulled it off you can see why
4:44
so many people have been attracted to it
4:46
it's like it's a problem that almost
4:48
everyone encounters at some point and it
4:50
seems like it would be so easy to solve
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like you can just imagine the app it's
4:53
just got like a list of events and you
4:55
invite friends to it like it seems so
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simple the thing about tarpet ideas is
4:58
that they are not necessarily impossible
5:00
like I'm even open-minded that somebody
5:03
will eventually make the like app to
5:04
meet up with your friends idea of work
5:06
is more accurate to think of them as
5:09
common ideas that are much harder than
5:11
they seem
5:14
so if you want to work on one
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um here's my advice first Google it it's
5:20
amazing how many Founders skip the step
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of just like Googling for their own
5:23
startup idea to see who has worked on it
5:25
in the past you should find who's worked
5:28
on this in the past and actually talk to
5:30
them if you can try to figure out what
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the hard part of this idea is that has
5:36
caused other people to not be able to
5:38
solve it yet the next mistake is simple
5:40
it is amazing how many Founders will
5:43
basically just like jump into the first
5:45
idea they have without even stopping to
5:47
consider whether it would actually make
5:48
a good business
5:50
but more dangerous is the founders on
5:52
the opposite side of the spectrum who
5:54
sit around waiting for the perfect
5:55
startup idea and of course there is no
5:58
such thing so these people just never
5:59
actually start a company so if you
6:01
imagine that there's like a spectrum
6:02
between picking the first idea that
6:04
comes to mind and waiting for the
6:06
perfect idea and you know somewhere in
6:08
the middle there is this like happy
6:10
place which is the place that you want
6:11
to be right and the way that Paul Graham
6:14
put this is that you should think of
6:16
your idea as a good starting point
6:19
new startup idea is perfect and no
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matter what you start with it's probably
6:22
going to morph anyway so you just want
6:24
to have an initial idea that has enough
6:26
interesting qualities that can morph in
6:29
the right direction so now suppose you
6:31
have a startup idea and you want to know
6:33
if it's good I'm going to give you a
6:35
framework for this and the format of the
6:37
framework is 10 key questions to ask
6:39
about any startup idea so the first one
6:42
is do you have founder market fit if I
6:45
depict like one most important criteria
6:47
it'd probably be this one and what I
6:49
mean by founder market fit is just are
6:51
you the right team to be working on this
6:53
idea
6:54
and a great example of what good founder
6:56
market fit looks like is plan grid so
6:58
plan grid makes an iPad app to view
7:01
construction Blueprints and to the
7:04
founders of plan grid were Tracy and
7:06
Ralph and Tracy had worked in the
7:08
construction industry and she knew a lot
7:10
about construction and Ralph was an
7:12
awesome developer who was like the
7:14
perfect person to build this iPad out if
7:16
you're going to imagine a team to start
7:18
playing grid the team that you would
7:20
imagine would look you know something
7:21
like that and that's what good founder
7:23
market fit looks like it's like this
7:24
team is obviously the right team to work
7:26
on the idea in fact founder market fit
7:28
is so important
7:30
that I would recast your search for a
7:34
startup idea when most people go to pick
7:37
a startup idea they try to look for a
7:40
good startup idea like in the abstract
7:42
and instead I would think about this
7:44
exercise as an exercise to pick a good
7:47
idea for your team you with me it
7:50
doesn't matter if something is a good
7:51
startup idea for someone else if it's
7:54
not a good idea for your team so you may
7:56
as well just look for ideas that you
7:58
would actually be good at executing okay
8:00
number two how big is the market
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obviously you need a big Market which
8:03
for startups typically means like a
8:05
billion dollar market but actually less
8:08
obviously there are two kinds of markets
8:10
for startups that are good
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um ones that are big now and ones that
8:14
are small but rapidly growing
8:16
and an example of the second one is
8:18
coinbase so when coinbase got started in
8:20
2012 the Bitcoin trading Market was
8:22
minuscule but even at that time it was
8:25
pretty obvious that if Bitcoin succeeded
8:27
the way people hoped that it would that
8:29
this would eventually be a billion
8:30
dollar market
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number three how acute is this problem
8:35
so as I said earlier the most common
8:36
mistake is just like working on
8:38
something that just isn't really a
8:40
problem or it's just not a problem that
8:42
people care enough about
8:44
um here's an example of the opposite
8:46
here's an example of what a good problem
8:48
looks like Rex
8:50
so Brax from Winter 2017 makes a credit
8:54
card for startups
8:56
and before brex if a startup NYC wanted
8:59
a corporate credit card they literally
9:01
could not get one because a no bank
9:03
would give a credit card to a startup
9:05
that's a good problem like if you're if
9:07
the alternative to your solution is
9:09
literally nothing that's what a good
9:11
problem looks like okay next do you have
9:13
competition
9:15
now most Founders think that if you have
9:17
competition that that's bad but
9:19
counter-intuitively it is the opposite
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most good startup ideas have competition
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but if you were going up against
9:26
especially entrenched competition you
9:29
typically need a new insight next one is
9:32
like do you want this personally
9:34
do you know people personally who want
9:37
this it's amazing how often people start
9:40
companies where the answer to both these
9:42
questions is no if that's the case you
9:45
definitely got to worry that you know
9:46
maybe nobody wants this so definitely
9:48
time to go talk to some users
9:51
only recently become possible or only
9:54
recently become necessary
9:56
so something has recently changed in the
9:58
world like a new technology regulatory
10:01
change or a new problem that is often
10:04
what creates a new opportunity
10:07
and a great example of this is company
10:09
called Checker which does background
10:11
checks via VIA an API so it's an API for
10:15
doing background checks on people and
10:17
roughly the story of Checker is delivery
10:20
services like doordash and instacart and
10:23
Uber started to take off
10:25
and they were all hiring huge pools of
10:28
delivery people and workers and they
10:29
needed to run background checks on all
10:31
of these people and there were at the
10:33
time already a bunch of large existing
10:36
companies that run background checks but
10:37
they weren't well suited for this very
10:39
new use case and that is like exactly
10:43
the kind of change in the world that
10:45
creates a new opportunity let's talk
10:47
about proxies
10:49
so a proxy is a large company that does
10:53
something similar to your startup but it
10:55
is not a direct competitor
10:57
and so um
10:59
a good example of this in practice is a
11:01
company called rapid which does food
11:02
delivery in Latin America and when
11:04
rapping got started there were already a
11:06
few delivery companies in other parts of
11:08
the world like doordash they're doing
11:09
very well they just hadn't caught on in
11:11
Latin America yet and so doordash was a
11:14
great proxy to show that this idea of
11:16
doing food delivery in Latin America
11:17
would probably work is this an idea
11:20
you'd want to work on for years but this
11:22
is a tricky one like sure if the answer
11:25
to this question is yes that's a good
11:26
sign but often it's not often an idea
11:29
grows on Founders over time as it starts
11:32
to work as I'm going to talk about in a
11:34
moment a lot of the best startup ideas
11:36
are in boring spaces like tax accounting
11:39
software or something like that like no
11:41
one is particularly passionate about
11:42
like nobody starts off being passionate
11:45
about tax accounting software
11:47
um but tax accounting software is
11:48
probably a good business and if you're
11:50
actually running a successful business
11:52
you tend to become passionate about it
11:54
over time okay is this a scalable
11:57
business
11:58
so if you're building pure software the
12:00
answer is yes because software skills
12:02
infinitely and you can just like check
12:03
this one off
12:05
um the place for Founders most often get
12:07
into trouble here is with Services
12:08
businesses like agencies or Dev shops
12:11
anything that requires like high skill
12:13
human labor in order to serve your
12:15
customers okay and my last question is
12:17
is this a good idea space which of
12:20
course means I need to tell you what an
12:22
idea space is this is a concept from my
12:25
colleague Dalton who you'll hear from
12:26
later in this course
12:28
an idea space is like one level of
12:31
abstraction out from a particular
12:33
startup idea it is a class of closely
12:35
related startup ideas
12:37
like software for hospitals or
12:40
infrastructure monitoring tools or food
12:42
delivery services and here's the thing
12:46
different idea spaces have wildly
12:48
different hit rates
12:50
over the last 10 years if you started a
12:53
company that did like fintech
12:55
infrastructure or vertical SAS for
12:57
Enterprise the the probability that your
13:00
company became a billion dollar company
13:01
was astonishingly High
13:04
whereas if you started something in
13:06
consumer Hardware or social networks or
13:09
ad Tech the success rate was like orders
13:12
of magnitude loader and I can't say that
13:14
that will continue to be the case for
13:15
those specific areas because spaces
13:17
flipped from hot to cold over time but
13:20
it is still worth thinking about picking
13:22
a good idea space
13:24
and a good idea Space is really just one
13:27
that like you expect is going to have a
13:29
reasonable hit rate for new startup
13:30
ideas and one that has founder market
13:32
fit
13:33
that way even if your initial idea isn't
13:35
quite right there are probably good
13:37
adjacent ideas that you can sort of like
13:39
drift into
13:41
I'm going to give a good example of like
13:42
how this played out in practice so a
13:44
good example of picking a good idea
13:45
space is this company called 5tran from
13:47
yc1213 and basically it's already 5tran
13:51
is they started making this tool for
13:53
data analysis
13:55
and they went to some companies and they
13:57
tried to sell it and the companies
13:59
didn't want it so they pivoted and they
14:01
built a different tool for data analysis
14:03
and they went back to the same companies
14:05
and they tried to sell them that one and
14:07
the companies didn't want that either
14:09
but each time they went to companies and
14:11
tried to sell them some tool for data
14:12
analysis they would learn more about
14:14
what those companies actually wanted and
14:15
So eventually they sort of stumbled into
14:17
an actual problem into an actual tool
14:19
for data analysis that companies
14:21
actually wanted
14:22
and
14:24
this is why picking a good idea space to
14:26
start with is so important like because
14:28
the five Tran Founders were shopping for
14:31
ideas and a fertile idea space they put
14:33
themselves in a good position to like
14:35
bump into a good startup idea if they
14:37
had picked a bad idea space they
14:39
probably wouldn't have found anything
14:40
okay before I talk about how to generate
14:44
startup ideas I've got one important
14:46
topic to tell you about
14:48
these are three things that make your
14:51
startup idea seem bad
14:53
but actually make them good and the
14:56
reason that they make them good is that
14:57
most Founders will shy away from ideas
15:00
like these which leaves them on the
15:02
table for smarter Founders to go and
15:05
grab them and here they are
15:07
ideas that are hard to get started ideas
15:10
that are in a boring space and ideas
15:12
that have existing competitors
15:15
ideas that are hard to get started so
15:17
Paul Graham wrote a terrific article
15:19
about this called schlep blindness which
15:21
I'd really recommend reading and the
15:23
example that Paul discusses is stripe
15:24
you all know stripe they make it easy to
15:26
integrate credit card payments to your
15:28
website
15:29
and the fascinating thing about stripe
15:31
is that when stripe launched there were
15:34
thousands of developers who already knew
15:37
that this was a problem they had tried
15:39
to integrate credit card payments to
15:40
their site and they realized that the
15:42
existing options sucked
15:44
but strangely not one of them even tried
15:47
to start striping and it's kind of a
15:50
kind of a fascinating question why
15:52
nobody else tried when so many people
15:54
were in a perfect position to see this
15:56
problem
15:57
and the reason is that getting
16:01
started building stripe required some
16:03
things that seemed really hard you had
16:06
to get a special deal with a bank you
16:08
get to learn a lot about the
16:10
nitty-gritty details of credit card
16:12
infrastructure those things seemed so
16:15
hard that they scared off all the other
16:17
people who might have started stripe
16:19
which caused them to leave this like 100
16:21
billion dollar opportunity on the table
16:23
for the stripe Founders to go and pick
16:25
up okay the second one is ideas that are
16:28
in a boring space and a great example of
16:31
this is Gusto which makes payroll
16:33
software
16:34
payroll software pretty boring right
16:37
the thing is there are thousands of
16:39
people who must have realized that
16:40
payroll software sucked but because it
16:43
was kind of a boring problem nobody
16:44
tried to fix it until the Gusto Founders
16:46
came along and the thing is that because
16:48
most Founders shy away from ideas like
16:50
this
16:51
boring ideas like payroll software have
16:54
a much higher hit rate than fun ideas
16:56
like
16:58
apps to find new restaurants to eat at
17:00
or like apps to find the next song to
17:03
listen to something like that like fun
17:05
ideas get picked over boring ideas get
17:07
left on the table for a long time
17:10
now you might be thinking Jared why
17:13
would I want to work on a boring idea
17:15
that sounds you know boring
17:17
but here's the thing even if you work on
17:20
an idea that sounds fun at the outset
17:22
the day-to-day reality of your startup
17:25
is going to be mostly the same anyway
17:28
either way you'll be mostly writing code
17:30
fixing bugs talking to users like pretty
17:35
much the same stuff and so I would argue
17:37
that once the initial excitement of your
17:40
idea has worn off and you are 6 or 12
17:43
months in and you are grinding out the
17:46
execution that makes your idea actually
17:48
work
17:49
how fun the initial idea sounded
17:52
actually has little to no correlation
17:54
with how much fun you will actually be
17:57
having working on your company
17:59
and the last one is that Founders
18:01
incorrectly shy away from spaces where
18:03
there are existing competitors
18:05
counter-intuitively most startup ideas
18:07
most good startup ideas have existing
18:10
competitors when founders go into spaces
18:11
with no existing competitors they often
18:14
find out that the reason that there are
18:15
no competitors is because no one wants
18:17
the product
18:19
a great situation is actually a market
18:21
where there are existing competitors but
18:23
you've noticed something that they all
18:25
seem to have missed or they all just
18:26
kind of suck a classic example of this
18:28
is Dropbox so when Dropbox launched they
18:32
were already about 20.
18:35
cloud-based file storage companies
18:37
Dropbox was like the 20th company and
18:39
it's space to launch naively you might
18:41
have thought that that made this a bad
18:42
Market I mean you would have gone and
18:44
looked and said like oh there are
18:45
already 20 competitors it seems like a
18:47
bad Market to go into but if you were
18:49
Savvy about startup ideas you would have
18:51
realized that it actually made it a
18:52
great Market and the reason is that even
18:55
though there were like 20 companies
18:56
doing this most people didn't use any of
19:00
them and that strongly suggests that
19:02
there actually was a problem here but
19:05
the existing products hadn't solved it
19:07
and Drew the founder of Dropbox had a
19:10
very specific insight about what all of
19:13
them were missing his Insight was
19:14
basically their UI sucked and the reason
19:17
their UI stopped was that at the time
19:19
the way that they all worked is you had
19:20
to like go to their website and manually
19:23
upload your files one at a time into
19:25
their website which sucked of course and
19:27
Drew had really a technical Insight
19:29
which was that if he integrated directly
19:31
into the host operating system he could
19:33
just sync your files automatically
19:35
without you having to do anything and
19:36
that was a real step function change in
19:39
how convenient these Services were to
19:41
use and that was the right insight okay
19:43
let's talk about how to come up with
19:46
startup ideas so it is possible to sit
19:50
down and explicitly think of startup
19:51
ideas and in a moment I'm going to talk
19:53
about how to do this but it is actually
19:55
not the best way the best way to have
19:58
startup ideas is to just notice them
19:59
organically and if you look at the YC
20:02
top 100 companies at least 70 percent of
20:04
them have their startup ideas
20:05
organically rather than by like sitting
20:08
down and explicitly trying to think of a
20:09
startup idea and the problem is that
20:11
when people sit down and try to think of
20:14
startup ideas they tend to think of bad
20:16
ones they're especially likely to think
20:18
of the same set of tar pit ideas that I
20:20
talked about earlier whereas startup
20:22
ideas that occur to you organically are
20:25
more likely to be good ones so if you're
20:27
not planning on starting a company
20:28
imminently and you just want to put
20:30
yourself in a position to have organic
20:32
startup ideas in the future here are
20:35
three ways to do that this is like
20:36
playing the long game to set yourself up
20:38
for future success
20:40
um first is just like become an expert
20:42
on something valuable if you're working
20:44
at the Forefront of some field you'll
20:46
see good startup ideas in that field
20:48
and a great way to do that is to go work
20:51
at a startup Harge talked about this in
20:53
his talk last week if you're working at
20:55
a startup you will become an expert in
20:56
the thing that that startup does and
20:58
that is really putting yourself in a
21:00
position to have great startup ideas and
21:02
finally if you're a programmer one thing
21:04
that can work is to just build things
21:05
that you find interesting even if
21:07
they're not businesses they're not
21:09
clearly startup ideas sometimes they
21:11
like
21:12
turn into them over time and a really
21:16
striking example of this is the story of
21:19
replica this is exactly how replica
21:21
started it was just something that amjad
21:23
found interesting it wasn't supposed to
21:24
be a startup originally okay but if you
21:27
want to generate ideas for startups
21:28
right now I'm going to walk through
21:30
seven recipes for doing that I've tried
21:33
to list these in order of How likely
21:35
they are to lead to actually good ideas
21:37
so start with the first ones okay here's
21:41
the first one and the best one
21:43
start with what your team is especially
21:46
good at
21:48
and think of ideas that take advantage
21:50
of your expertise the reason that this
21:52
is so effective is that any idea you
21:54
come up with this way has automatic
21:56
founder market fit do you see how this
21:58
is almost like a hack to generate the
22:00
set of ideas that has founder market fit
22:02
here's a great example of like how this
22:05
worked in practice
22:06
so a good example is this company resi
22:08
which is like open door for rental
22:11
apartments and before starting resi the
22:13
founders have worked in real estate and
22:16
debt financing and they were experts in
22:18
those areas
22:19
and where they got into YC they spent
22:21
the first month looking for ideas
22:24
but the smart thing that they did is
22:26
they only looked at ideas in that idea
22:28
space in like the rough idea space at
22:30
like the intersection of like real
22:32
estate and fintech and that was a smart
22:34
move because that is a very fertile idea
22:37
space for startups like many billion
22:39
dollar companies have come out of that
22:40
idea space and the resi founders were
22:42
experts in that idea space and so
22:44
because of that
22:46
their search for a startup idea was
22:48
pretty quick and painless and pretty
22:50
quickly they came up with the idea for
22:51
Rezi which is like an excellent idea and
22:54
has perfect founder market fit so if you
22:56
have specific expertise like the resi
22:58
founders did you should definitely start
23:01
by looking at ideas in you know the
23:03
things that you're experts in
23:05
um it is weird how many startups apply
23:09
to YC and we look at their applications
23:10
and the founders like are actually
23:12
legitimate experts in something but the
23:14
idea that they're applying with is like
23:15
something completely different
23:18
now if you're if you're a young founder
23:20
if you're in college or something you
23:21
may not have had a chance to develop
23:23
it's like the level of domain expertise
23:25
that the resi founders had so this may
23:28
not be the right recipe for you so let's
23:30
talk about some other ones
23:31
the next recipe is to start with a
23:33
problem you've personally encountered
23:36
ideally one that you're in an unusual
23:39
position to see so vetco is a website
23:44
for veterinarians to order supplies so
23:46
you can think about it like amazon.com
23:48
for vets
23:50
and the short story of vetcove is that
23:52
the founders are brothers
23:54
and their dad is a veterinarian
23:56
and growing up they would notice that
23:59
the way he ordered supplies was like
24:01
super old-fashioned like you'd have to
24:03
like call up a supplier on the phone and
24:05
like order stuff through like a 1-800
24:07
number or something it was like very
24:10
obvious that you could build an
24:12
amazon.com kind of thing that would
24:13
replace that
24:14
and I I love the story of vetco because
24:17
it's such a great example of what a
24:20
great startup opportunity looks like
24:22
because thousands of veterinarians must
24:25
have known that this was a real problem
24:27
that it was really annoying there wasn't
24:29
like a basic website where you could
24:30
just go to order supplies but the thing
24:32
is veterinarians don't start Tech
24:34
startups very often and then on the
24:37
other hand you had like thousands of
24:39
programmers in Silicon Valley who were
24:40
begging their heads against cisps and
24:43
tarpet ideas totally unaware that over
24:45
here there was like a really great
24:47
genuine problem to work on
24:50
and because of this when the vet
24:52
co-founders got started they had no
24:55
competition so this amazing idea just
24:57
got left on the table for years so if
25:00
you want to try to actually use recipes
25:01
one and two here's a specific set of
25:04
instructions for how to do it this is
25:05
advice I often give to Founders NYC who
25:08
are pivoting and who are looking for a
25:09
new idea here's how it works
25:12
for each founder on your team
25:15
go through every job you've ever had
25:17
plus all your internships plus like
25:21
other life experiences
25:23
and think really carefully about each of
25:26
them
25:27
what problems did you come across
25:30
what did you learn that other people
25:33
don't know
25:34
What are problems or opportunities that
25:37
you've been in kind of a special
25:38
position to see
25:40
those are the best places to start
25:43
looking for startup ideas okay the next
25:45
one is to just think of things you
25:47
personally wish existed this is like a
25:49
really classic recipe this is very
25:51
common advice great example of this is
25:53
doordash the short story of doordash is
25:55
that the founders of doordash were
25:56
undergrads at Stanford and the thing
25:58
they really wanted was to be able to
26:00
just order food from local restaurants
26:02
and have it delivered to their dorm and
26:04
before doordash you couldn't do that so
26:06
they started doordash and this is a
26:08
great recipe but
26:11
this is the recipe that is most
26:13
dangerous and potentially leading to tar
26:15
pit ideas so if you're using this recipe
26:17
you just gotta stop and think for a
26:19
second is there a reason why this thing
26:21
doesn't exist yet okay the next one is
26:23
to look for things in the world that
26:25
have changed recently that might have
26:27
created a new opportunity a great
26:29
example of this is covet
26:31
so when the pandemic started it changed
26:33
daily life for all of us and many
26:36
Founders realize that this created the
26:38
opportunity for new companies and some
26:40
very successful startups came out of it
26:41
and
26:43
one of them is this company called
26:45
gather town which builds like this fun
26:47
way to hang out with other people online
26:48
and the founders of gathered town were
26:50
actually working on a different idea
26:51
that wasn't going so well and when the
26:54
pandemic started they pivoted to this
26:56
because it was obvious that like the
26:57
change in behavior of the pandemic had
27:00
created a bunch of new opportunities you
27:02
can also look for companies that have
27:04
been successful recently and look for
27:07
new variants on them
27:09
a good example of this is a company
27:11
called Nuvo cargo Nuvo cargo is a good
27:13
example of explicitly sitting down to
27:15
try to think about startup ideas and
27:17
actually finding a good one which is the
27:18
thing that I told you is hard to do
27:19
pneumo cargo is basically flexport for
27:21
Latin America they help U.S companies to
27:24
import stuff from Mexico
27:26
and the story of nuva cargo is that
27:29
Deepak the founder was working on a
27:31
different idea NYC and he realized that
27:33
his idea wasn't going to work
27:35
and he went on like a systematic search
27:37
for better ideas
27:40
and he picked Nuvo cargo for for very
27:43
analytical reasons he picked it because
27:44
it was a large Market
27:46
because they were good
27:48
proxies from other companies flexport
27:50
and he picked it even though he didn't
27:52
have deep domain expertise in the import
27:55
export space because he had some
27:57
connections that would enable him to get
27:59
started and he felt like he would just
28:01
be very good at running this kind of
28:02
operationally intensive business
28:05
and that worked really well Niva cargo
28:07
is doing super well you can also go and
28:10
talk to people and just ask them what
28:12
problems they have this this can work
28:14
the the downside with this recipe is it
28:16
actually requires a lot of skill if you
28:18
want to do this I would recommend first
28:20
picking a fertile idea space and then
28:23
going and talking to people within that
28:25
idea space and I would also recommend
28:28
talking not just to potential customers
28:31
but also to potent but also to founders
28:33
of companies in that idea space to get
28:37
advice about what ideas are actually
28:38
worth pursuing and a good example of
28:40
doing this successfully is a to B and A
28:43
to B was in the position that a lot of
28:45
Founders that struggle to find good
28:47
startup ideas are in which is that the
28:49
founders were pretty young and they
28:50
hadn't acquired a lot of specific domain
28:53
expertise like the resi founders had yet
28:55
but they really wanted to do a startup
28:56
and they wanted to do a startup that had
28:58
like a genuinely good idea the way that
28:59
they came up with the idea for ADB was
29:01
very systematic and so I'm going to walk
29:03
you through how they did it and really
29:06
break it down for you so A to B makes
29:08
fuel cards and if you haven't heard of a
29:10
fuel card it's like a special kind of
29:13
credit card for truck drivers when the A
29:15
to B Founders got into YC they pivoted
29:17
and they spent the whole YC batch
29:20
looking for a new idea and here's how
29:22
they did it first they picked an idea
29:25
space and the idea space that they
29:26
picked was essentially software for the
29:29
trucking industry
29:31
and they picked this idea space despite
29:33
not being experts at the trucking
29:35
industry because they felt that it just
29:38
should be a fertile idea space to go
29:41
hunting for startup ideas the trucking
29:43
industry is as like Big Industry hasn't
29:46
been that disrupted by startups and
29:47
software yet so they just felt like
29:49
there were probably some good problems
29:50
to work on in the trucking industry but
29:53
the problem is
29:55
they didn't know that much about the
29:56
trucking industry so they didn't know
29:57
what those problems were and so they
29:59
decided that they would turn themselves
30:01
into experts in the trucking industry
30:05
and what they did is they actually
30:06
physically drove two truck stops which
30:09
were places where truck drivers are just
30:10
kind of
30:11
Milling about and they would just walk
30:14
up to truck drivers and like start
30:16
talking to them and ask them questions
30:18
about what their problems were
30:21
they also talked to a lot of Founders
30:23
who had started companies in the
30:25
trucking space to get ideas for what
30:28
problems were actually worth working on
30:31
they would basically talk to like anyone
30:33
who knew anything about Trucking that
30:35
was willing to talk to them and as they
30:37
did that they began to put together like
30:39
a mental map of the space and where the
30:42
good ideas were where the bad ideas were
30:44
and they actually went through a whole
30:46
bunch of different potential ideas
30:48
before eventually deciding to work on
30:50
fuel cards and I love the example of a
30:53
to B Because A to B is one of the best
30:55
new ideas to come out of YC in several
30:58
years A to B is a phenomenal company and
31:00
the approach that they used to find this
31:02
idea is something that really anyone
31:04
could do and most Founders don't do this
31:08
because it just sounds like too much
31:10
work so if you're willing to put in the
31:13
work this is an amazing way to find a
31:15
startup idea okay and my last recipe is
31:17
to just like look for big industries
31:20
that seem broken
31:21
any Big Industry that seems broken is
31:23
probably right for disruption and
31:25
finally I've got kind of a bonus recipe
31:27
which is to just find a co-founder that
31:30
already has an idea they're actually
31:32
like a lot of people just on Startup
31:34
School co-founder matching right now
31:35
that already have an idea and are
31:36
looking for a co-founder so if you don't
31:38
have a co-founder and you don't have an
31:40
idea that could be a great hack to
31:42
getting both at the same time the last
31:44
point that I want to leave you with is
31:45
just to remember that it's often hard to
31:48
tell if a startup idea is good or not
31:50
and so while I hope the concepts that I
31:52
talked about here will help
31:55
typically the only way to know for sure
31:57
if your startup idea is good is to Just
32:00
Launch it and find out so if after all
32:03
this you've got a startup idea and
32:04
you're still kind of on the fence about
32:05
whether it's actually a good idea or not
32:07
that is my advice for you just launch it
32:10
and find it
32:12
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