How to Get Startup Ideas

[How to Get Startup Ideas]

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| Want to start a startup? Get funded by
Y Combinator. |

November 2012

The way to get startup ideas is not to try to think of startup
ideas. It's to look for problems, preferably problems you have
yourself.

The very best startup ideas tend to have three things in common:
they're something the founders themselves want, that they themselves
can build, and that few others realize are worth doing. Microsoft,
Apple, Yahoo, Google, and Facebook all began this way.

Problems

Why is it so important to work on a problem you have? Among other
things, it ensures the problem really exists. It sounds obvious
to say you should only work on problems that exist. And yet by far
the most common mistake startups make is to solve problems no one
has.

I made it myself. In 1995 I started a company to put art galleries
online. But galleries didn't want to be online. It's not how the
art business works. So why did I spend 6 months working on this
stupid idea? Because I didn't pay attention to users. I invented
a model of the world that didn't correspond to reality, and worked
from that. I didn't notice my model was wrong until I tried
to convince users to pay for what we'd built. Even then I took
embarrassingly long to catch on. I was attached to my model of the
world, and I'd spent a lot of time on the software. They had to
want it!

Why do so many founders build things no one wants? Because they
begin by trying to think of startup ideas. That m.o. is doubly
dangerous: it doesn't merely yield few good ideas; it yields bad
ideas that sound plausible enough to fool you into working on them.

At YC we call these "made-up" or "sitcom" startup ideas. Imagine
one of the characters on a TV show was starting a startup. The
writers would have to invent something for it to do. But coming
up with good startup ideas is hard. It's not something you can do
for the asking. So (unless they got amazingly lucky) the writers
would come up with an idea that sounded plausible, but was actually
bad.

For example, a social network for pet owners. It doesn't sound
obviously mistaken. Millions of people have pets. Often they care
a lot about their pets and spend a lot of money on them. Surely
many of these people would like a site where they could talk to
other pet owners. Not all of them perhaps, but if just 2 or 3
percent were regular visitors, you could have millions of users.
You could serve them targeted offers, and maybe charge for premium
features.
[1]

The danger of an idea like this is that when you run it by your
friends with pets, they don't say "I would never use this." They
say "Yeah, maybe I could see using something like that." Even when
the startup launches, it will sound plausible to a lot of people.
They don't want to use it themselves, at least not right now, but
they could imagine other people wanting it. Sum that reaction
across the entire population, and you have zero users.
[2]

Well

When a startup launches, there have to be at least some users who
really need what they're making — not just people who could see
themselves using it one day, but who want it urgently. Usually
this initial group of users is small, for the simple reason that
if there were something that large numbers of people urgently needed
puts into a version one, it would probably already exist. Which
means you have to compromise on one dimension: you can either build
something a large number of people want a small amount, or something
a small number of people want a large amount. Choose the latter.
Not all ideas of that type are good startup ideas, but nearly all
good startup ideas are of that type.

Imagine a graph whose x axis represents all the people who might
want what you're making and whose y axis represents how much they
want it. If you invert the scale on the y axis, you can envision
companies as holes. Google is an immense crater: hundreds of
millions of people use it, and they need it a lot. A startup just
starting out can't expect to excavate that much volume. So you
have two choices about the shape of hole you start with. You can
either dig a hole that's broad but shallow, or one that's narrow
and deep, like a well.

Made-up startup ideas are usually of the first type. Lots of people
are mildly interested in a social network for pet owners.

Nearly all good startup ideas are of the second type. Microsoft
was a well when they made Altair Basic. There were only a couple
thousand Altair owners, but without this software they were programming
in machine language. Thirty years later Facebook had the same
shape. Their first site was exclusively for Harvard students, of
which there are only a few thousand, but those few thousand users
wanted it a lot.

When you have an idea for a startup, ask yourself: who wants this
right now? Who wants this so much that they'll use it even when
it's a crappy version one made by a two-person startup they've never
heard of? If you can't answer that, the idea is probably bad.
[3]

You don't need the narrowness of the well per se. It's depth you
need; you get narrowness as a byproduct of optimizing for depth
(and speed). But you almost always do get it. In practice the
link between depth and narrowness is so strong that it's a good
sign when you know that an idea will appeal strongly to a specific
group or type of user.

But while demand shaped like a well is almost a necessary condition
for a good startup idea, it's not a sufficient one. If Mark
Zuckerberg had built something that could only ever have appealed
to Harvard students, it would not have been a good startup idea.
Facebook was a good idea because it started with a small market
there was a fast path out of. Colleges are similar enough that if
you build a facebook that works at Harvard, it will work at any
college. So you spread rapidly through all the colleges. Once you
have all the college students, you get everyone else simply by
letting them in.

Similarly for Microsoft: Basic for the Altair; Basic for other
machines; other languages besides Basic; operating systems;
applications; IPO.

Self

How do you tell whether there's a path out of an idea? How do you
tell whether something is the germ of a giant company, or just a
niche product? Often you can't. The founders of Airbnb didn't
realize at first how big a market they were tapping. Initially
they had a much narrower idea. They were going to let hosts rent
out space on their floors during conventions. They didn't foresee
the expansion of this idea; it forced itself upon them gradually.
All they knew at first is that they were onto something. That's
probably as much as Bill Gates or Mark Zuckerberg knew at first.

Occasionally it's obvious from the beginning when there's a path
out of the initial niche. And sometimes I can see a path that's
not immediately obvious; that's one of our specialties at YC. But
there are limits to how well this can be done, no matter how much
experience you have. The most important thing to understand about
paths out of the initial idea is the meta-fact that these are hard
to see.

So if you can't predict whether there's a path out of an idea, how
do you choose between ideas? The truth is disappointing but
interesting: if you're the right sort of person, you have the right
sort of hunches. If you're at the leading edge of a field that's
changing fast, when you have a hunch that something is worth doing,
you're more likely to be right.

In Zen and the Art of Motorcycle Maintenance, Robert Pirsig says:

You want to know how to paint a perfect painting? It's easy. Make
yourself perfect and then just paint naturally.

I've wondered about that passage since I read it in high school.
I'm not sure how useful his advice is for painting specifically,
but it fits this situation well. Empirically, the way to have good
startup ideas is to become the sort of person who has them.

[...]

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