Avoid these most common mistakes

Don’t believe that you need an amazing idea to get started.

It’s really easy to look at current successful companies today like Google and Facebook and think that they had such brilliant ideas when they started. The fact was, they were the 20th search engine and social media back then. They were only good initial ideas.

Don’t work on the first idea that comes to mind without carefully deciding if it’s actually a good one.

If you pick a bad one, you might have to start over completely. If you pick a good starting point, even if your initial idea isn’t great, you can tweak it into a great one.

Don’t start with a solution instead of a problem.

Imagine an idea “Uber for plumbers” where it helps you find plumbers more easily. Now tell me, is this an actual problem?

Don’t believe that startup ideas are hard to find.

Actually, there are many problems in the world and you haven’t learnt how to do it yet.

How to evaluate startup ideas

How big is the idea?

One way is to look for similar existing large companies. The other way is to look for a small market but has a real chance of being huge in the future. For example, Coinbase started in 2012 when Bitcoin was still new. Even then, lots of people believed in it.

Are the founders expert in their fields?

Flexport’s founder had worked in the industry for 10 years and knew pretty much everything about it.

How sure are you that you’re solving a big problem?

Do you have any new idea/insight into this idea? Most people thought allowing people to sleep in your apartment was weird and dangerous. Airbnb’s founder thought it was fun otherwise.

Are you making something that you yourself want?

When you build for yourself, you have at least 1 user and you can trust your intuition about what to build.

Did this recently become possible?

When Rappi got started, there was DoorDash that was doing very well in other parts of the world.

How to not reject startup ideas

Don’t reject ideas that seem hard to get started.

When Stripe launched, there were many developers knew building a payment infrastructure was a problem. However, fixing it was hard because you had to deal with banks, regulations, and so on.

Don’t reject ideas that are in a boring space.

Thousands of programmers must have realized that payroll software sucked but only Gusto tried to fix it.

Don’t reject ideas that seem too ambitious.

Often intimidating ideas turn into really big companies like Tesla or SpaceX.

Don’t shy away from spaces with existing competitors.

Usually when there’s no competitors, nobody wants the product. The idea situation is when there are competitors and you have something that they all seem to have missed.

How to generate startup ideas (from best to worst)

It’s very helpful to become an expert on something valuable.

The best way is to get a job at the forefront of some field, say a high growing startup.

Go through every company you’ve ever worked at and ask yourself:

  • What are things you learned there that other people don’t know? SnapDocs had worked in the mortgage industry for 10 years so he had a lot of insights about it.
  • What seemed broken? What parts of company life were clumsy? Lattice’s founder noticed how bad their performance review software was.
  • Were there things that your company built in-house that other companies might need? Mixpanel’s founder had built advanced analytics tools for his previous company’s internal projects and realized that other companies would need those same tools.

Think of things you wish someone else would build for you.

DoorDash founders were trying to get Thai food delivered to them and they realized there was literally no way to do it so they built one for themselves.

What would you be excited to work on for 10 years, even if it didn’t succeed?

Boom’s founder was just obsessed with the idea of supersonic travel even though he had not worked in in aerospace.

Look for things that have changed in the world recently and ideas that are now possible because of this change.

PlanGrid was possible because Apple had created the iPad.

Look for new variants of recent successful companies.

Uber for X. Airbnb for Y. Even though it’s a common way, these ideas are very often solutions in search of problems.

Ask people for problems they want solved.

This is good with people who have particular areas of expertise but most people are bad at seeing startup ideas.

Look for industries that seem broken.

This works well if you know a lot about industry you’re in.