May 24th 2020
Is there a repeatable process for coming up with new and good startup ideas? In this post, we distill insights from great founders and technologists, like Eric Yuan of Zoom, Marc Andreesen, Ben Horowitz, etc and share three simple questions you can ask yourself to generate startup ideas worth pursuing.
According to Sam Altman, there’s a formula for startup success:
“The outcome is something like idea x product x execution x team x luck, where luck is a random number between zero and ten thousand. Literally that much. But if you do really well in the four areas you can control, you have a good chance at at least some amount of success.” — Sam Altman,
Is there a repeatable process for coming up with new and good startup ideas? Having gotten to know hundreds of founders in the past couple of years, as a VC, BD person, and now as a founder, here’s what I noticed from talking to them:
- Great founders put themselves in a position to consistently experience new problems
- Great founders develop unique edges that make them the best at what they do
- Great founders catch the right wave, at the right time (or just got lucky!)
1. Great founders put themselves in a position to consistently experience new problems
A great place to start for idea generation is by simply asking “what’s a problem you face at work or in your daily life?”, and more importantly, noting these ideas down for exploration later.
These problems can be small, as long as they’re adjacent to other problems / markets down the line. Take Facebook for example. Before it was the world’s largest social network, Mark Zuckerberg simply wanted to start an online directory for students at Harvard to stalk each other.
TheFacebook was a stunningly simple product. “It was really just a directory,” recalled Meagan Marks, another Harvard student who became an early Facebook employee in 2006. “Before [October 2005], you could only even have one picture.”
You don’t have to go out of your way to have new life experiences. Another tip is just to be more observant. For example, if you’re at a growth-stage startup of 500-2000 employees, you’re probably unique in that you’re able to see what solutions are breaking for teams of that size.
I’ve also picked up on a lot just by hearing my colleagues bitch about their work. What’s boring and can be automated? What data problems do they face? What collaboration issues do they have? How do they think it should be solved? Every problem could be a chance for a startup to help.
Ask yourself: How can I consistently put myself in a position where I can experience new and meaningful problems? How do I pay more attention and systematically explore problem spaces I come across?
2. Great founders develop unique edges that make them the best at what they do
A great idea becomes even more powerful when the problem you have intersects with unique insight, skills, relationships, or domain expertise.
But he really only acted on that insight after spending 14 years at WebEx and Cisco, where he eventually rose up to become Cisco’s corporate VP of Engineering:
“I firmly believed I could develop a platform that would make customers happy, but realized it would be very difficult to do unless I built a product from the ground up. Cisco was unwilling to change its collaboration strategy that centered around its enterprise social networking service, then known as Cisco Quad. So in June of 2011, I decided it was time to make the video conferencing solution I imagined during my college train trips a reality.”
Ask yourself: What unique insight, skills, relationships, or domain expertise makes you uniquely positioned to crack this? If I don’t have those edges yet, what can I do to actively develop them?
3. Great founders catch the right wave, at the right time
Many successful startups rode waves of new technologies and platforms. There are countless examples of this: Instagram followed the release of the iPhone camera, Uber jumped on the GPS train, and Zynga capitalized on the Facebook developer API.
This can be a tricky one because of timing. As Marc Andreesen often says “there are no bad ideas in tech, only bad timing.” There’s been many examples of the right idea coming at the wrong time:
Ask yourself: what new waves are up and coming? There’s a ton of new trends like crypto, no-code, and remote work, AR/VR. How can I put myself in a position to learn about and be exposed to these new trends?