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How to Get and Evaluate Startup Ideas | Startup School
24 segments available
YC Group Partner Jared Friedman shares a framework for how to get and evaluate startup ideas. He shares many examples of YC companies and the inside stories of how they came up with the ideas that turned into billion dollar companies. Even if you have an existing idea, this talk helps founders confirm that their idea is good and/or provide framework for a future pivot. Apply to Y Combinator: https://yc.link/SUS-apply Work at a startup: https://yc.link/SUS-jobs Chapters (Powered by https://bit.ly/chapterme-yc) - 00:00 - Finding a promising idea 00:51 - Where does this advice come from? 01:44 - 4 most common mistakes 06:29 - 10 key questions to ask about any startup idea 14:40 - 3 things that make your startup idea good 19:42 - How to come up with startup ideas 21:25 - 7 recipes for generating startups ideas #startup #tech #entrepreneur
Segments Timeline
The Framework for Startup Ideas
Jared Friedman introduces a framework for evaluating startup ideas, emphasizing that while no one can predict success, certain ideas have a higher likelihood of succeeding. He shares insights from analyzing top YC companies and discusses the importance of execution alongside the initial idea.
"[Music] all right hello everyone I've got a lot of content to get through so I'm gonna move fast Buckle in if you are looking for a startup idea right now I'm going to try to help but more importantly..."
Common Mistakes Founders Make
Friedman outlines the four most common mistakes founders make when developing startup ideas. He emphasizes the importance of solving real problems for users and warns against creating solutions in search of a problem, which often leads to superficial ideas that lack genuine user interest.
"recent billion dollar companies actually came up with their idea it also draws on a classic essay by Paul Graham that I really recommend it's called how to get startup ideas um it also comes from help..."
Avoiding Tar Pit Ideas
In this segment, Friedman discusses 'tar pit ideas'—common startup concepts that seem appealing but are structurally difficult to solve. He advises founders to research existing attempts at these ideas to understand the challenges and avoid wasting time on unfeasible projects.
"care about we call it a solution in search of a problem or a cisp let's go through an example so a lot of Founders come up with an idea with this kind of thought process they go hmm AI is cool what co..."
The Spectrum of Idea Selection
Friedman explains the spectrum between jumping on the first idea and waiting for the perfect one. He encourages founders to find a balance, suggesting that a startup idea should be a good starting point that can evolve over time, rather than seeking perfection from the outset.
"startup the next mistake is getting stuck on what we call tar pit ideas what's a tar pit idea so there's this certain set of common startup ideas that have been around for forever they have been apply..."
Evaluating Your Startup Idea
Friedman introduces a framework of ten key questions to evaluate startup ideas, starting with the concept of 'founder market fit.' He emphasizes that the right team should align with the idea, using the example of PlanGrid to illustrate how relevant experience can enhance the likelihood of success.
"of their life stuck on a tarpet like they're very tantalizing from a distance because they're so superficially plausible as startup ideas here's a concrete example this is a very common tarpet idea th..."
Market Size and Problem Acuteness
In this segment, Friedman discusses the importance of market size and the acuity of the problem being addressed. He explains that a good startup idea often targets a large or rapidly growing market and highlights the significance of addressing problems that are genuinely pressing for users.
"is more accurate to think of them as common ideas that are much harder than they seem so if you want to work on one um here's my advice first Google it it's amazing how many Founders skip the step of ..."
Understanding Competition
Friedman challenges the notion that competition is inherently bad for startups. He explains that many successful ideas have competition, and that understanding the competitive landscape can provide valuable insights for new founders, especially when facing entrenched competitors.
"imagine that there's like a spectrum between picking the first idea that comes to mind and waiting for the perfect idea and you know somewhere in the middle there is this like happy place which is the..."
Personal Connection to the Problem
Friedman emphasizes the importance of personal connection to the startup idea. He encourages founders to ensure they or people they know genuinely want the solution being offered, as this can significantly impact the likelihood of success and market acceptance.
"construction industry and she knew a lot about construction and Ralph was an awesome developer who was like the perfect person to build this iPad out if you're going to imagine a team to start playing..."
Identifying Recent Opportunities
In this final segment, Friedman discusses how recent changes in technology or regulations can create new opportunities for startups. He highlights the importance of recognizing these shifts to identify viable startup ideas that address newly emerging problems.
"obviously there are two kinds of markets for startups that are good um ones that are big now and ones that are small but rapidly growing and an example of the second one is coinbase so when coinbase g..."
Understanding Idea Spaces
In this segment, Friedman introduces the concept of 'idea spaces,' which are categories of related startup ideas. He explains how different idea spaces have varying success rates and emphasizes the importance of selecting a fertile idea space to increase the likelihood of finding a successful startup idea.
"creates a new opportunity let's talk about proxies so a proxy is a large company that does something similar to your startup but it is not a direct competitor and so um a good example of this in pract..."
The Importance of a Good Idea Space
Friedman shares the story of 5tran, a company that pivoted through various data analysis tools until they found a product that resonated with customers. He stresses that starting in a good idea space can lead to discovering valuable startup ideas, as it allows founders to adapt and learn from market feedback.
"this one off um the place for Founders most often get into trouble here is with Services businesses like agencies or Dev shops anything that requires like high skill human labor in order to serve your..."
Three Misunderstood Startup Ideas
Friedman discusses three types of startup ideas that are often overlooked but can be highly successful: ideas that are hard to start, those in boring spaces, and those with existing competitors. He uses Stripe and Gusto as examples of companies that succeeded by tackling challenging problems in less glamorous markets.
"I'm going to give a good example of like how this played out in practice so a good example of picking a good idea space is this company called 5tran from yc1213 and basically it's already 5tran is the..."
Challenging the Norm: Embracing Boring Ideas
In this segment, Friedman argues that working on 'boring' ideas can lead to greater success due to less competition. He explains that the day-to-day reality of running a startup often involves similar tasks regardless of the initial excitement of the idea, making it essential to choose a problem worth solving.
"grab them and here they are ideas that are hard to get started ideas that are in a boring space and ideas that have existing competitors ideas that are hard to get started so Paul Graham wrote a terri..."
Finding Startup Ideas Organically
Friedman emphasizes the importance of organically discovering startup ideas rather than forcing them. He notes that 70% of successful YC companies found their ideas naturally. He suggests that aspiring founders should immerse themselves in their fields to position themselves for future opportunities, rather than sitting down to brainstorm ideas, which often leads to poor results.
"incorrectly shy away from spaces where there are existing competitors counter-intuitively most startup ideas most good startup ideas have existing competitors when founders go into spaces with no exis..."
Expertise as a Foundation for Ideas
This segment focuses on leveraging personal expertise to generate startup ideas. Friedman advises founders to start with what they are good at, as this creates a natural founder-market fit. He illustrates this with the example of Resi, a startup founded by experts in real estate and fintech, who quickly identified a viable business opportunity in their field.
"let's talk about how to come up with startup ideas so it is possible to sit down and explicitly think of startup ideas and in a moment I'm going to talk about how to do this but it is actually not the..."
Identifying Personal Problems
Friedman discusses the value of identifying personal problems as a source for startup ideas. He shares the story of Vetco, a platform for veterinarians to order supplies, highlighting how the founders recognized a significant issue in their father's outdated ordering process. This segment illustrates how unique personal experiences can lead to innovative solutions in underserved markets.
"finally if you're a programmer one thing that can work is to just build things that you find interesting even if they're not businesses they're not clearly startup ideas sometimes they like turn into ..."
The Importance of Personal Experience
In this segment, Friedman provides a structured approach for founders to identify startup ideas based on their past experiences. He encourages them to reflect on every job and internship to uncover problems they encountered, emphasizing that these insights can lead to valuable startup opportunities that others may overlook.
"founders did you should definitely start by looking at ideas in you know the things that you're experts in um it is weird how many startups apply to YC and we look at their applications and the founde..."
Wishing for New Solutions
Friedman discusses the classic recipe for generating startup ideas by thinking of things one personally wishes existed. He uses DoorDash as an example, explaining how the founders' desire for food delivery led to the creation of a successful business. However, he cautions that this approach can also lead to 'tar pit' ideas if not carefully considered.
"and because of this when the vet co-founders got started they had no competition so this amazing idea just got left on the table for years so if you want to try to actually use recipes one and two her..."
The DoorDash Inspiration
In this segment, Friedman uses DoorDash as a case study to illustrate the classic recipe of creating a startup based on personal desires. He explains how the founders wanted a food delivery service while at Stanford, leading to the creation of DoorDash. However, he warns that this approach can be risky if founders don't consider why similar services don't already exist.
"they started doordash and this is a great recipe but this is the recipe that is most dangerous and potentially leading to tar pit ideas so if you're using this recipe you just gotta stop and think for..."
Pivoting Post-Pandemic
Friedman discusses how the COVID-19 pandemic created new opportunities for startups, using Gather Town as an example. The founders pivoted from a failing idea to capitalize on the changing social behaviors caused by the pandemic. This segment highlights the importance of adapting to recent changes in the world to identify new startup opportunities.
"can also look for companies that have been successful recently and look for new variants on them a good example of this is a company called Nuvo cargo Nuvo cargo is a good example of explicitly sittin..."
Nuvo Cargo's Analytical Approach
This segment focuses on Nuvo Cargo, a startup that emerged from a systematic search for ideas. Friedman explains how the founder, Deepak, transitioned from a failed idea to a successful one by analyzing market needs and leveraging connections. This highlights the importance of a methodical approach in identifying viable startup concepts.
"is doing super well you can also go and talk to people and just ask them what problems they have this this can work the the downside with this recipe is it actually requires a lot of skill if you want..."
A to B's Journey in Trucking
Friedman shares the story of A to B, a startup that found success in the trucking industry by immersing themselves in the field. The founders engaged directly with truck drivers to understand their challenges, demonstrating the value of firsthand research and networking in discovering startup ideas. This segment emphasizes the need for founders to become experts in their chosen industry.
"you through how they did it and really break it down for you so A to B makes fuel cards and if you haven't heard of a fuel card it's like a special kind of credit card for truck drivers when the A to ..."
Identifying Broken Industries
In this segment, Friedman advises founders to look for large, broken industries ripe for disruption. He also suggests finding a co-founder with an existing idea as a shortcut to launching a startup. This segment encapsulates the essence of seeking out opportunities in established markets that are in need of innovation.
"talking to them and ask them questions about what their problems were they also talked to a lot of Founders who had started companies in the trucking space to get ideas for what problems were actually..."
The Launch Decision
Friedman concludes by emphasizing that the true test of a startup idea's viability is to launch it. He encourages founders to take action and validate their ideas through real-world application, reinforcing the notion that practical experience is essential in the entrepreneurial journey.
"startup idea okay and my last recipe is to just like look for big industries that seem broken any Big Industry that seems broken is probably right for disruption and finally I've got kind of a bonus r..."