# How to Get and Evaluate Startup Ideas | Startup School ![rw-book-cover](https://i.ytimg.com/vi/Th8JoIan4dg/maxresdefault.jpg) ## Metadata - Author: [[Y Combinator]] - Full Title: How to Get and Evaluate Startup Ideas | Startup School - Category: #articles - URL: https://www.youtube.com/watch?v=Th8JoIan4dg ## Highlights - the most common mistake is just building something that doesn't solve a real problem for your users typically you can articulate the problem that you're solving you can put it in words but when you actually go and talk to the users ([View Highlight](https://read.readwise.io/read/01hmj3k9tkrk6bv0y42vs12gd6)) ^84d7c7 - we call it a solution in search of a problem ([View Highlight](https://read.readwise.io/read/01hmj3kw0j77df6c09jcnbsjsm)) ^fc11bc - That's a solution in search of a problem and the reason it's dangerous is that if you do that you'll probably find a problem but it will it will be a superficially plausible problem it'll be a made-up problem that people don't really care about rather than a real problem that people actually care about and if people don't really care about the problem they won't really care about your solution ([View Highlight](https://read.readwise.io/read/01hmj3p61jk546w6vxjg4ctjt4)) ^ab06c5 - here's what causes tarpet ideas they all form around some like widespread problem that lots of potential Founders encounter and it's a problem it seems like it could be easily solved with a startup but it's an illusion there's actually a structural reason why it's very hard or impossible to solve which is why after all these years no one has solved it and you can see why ideas like this would be so dangerous why they will cause so many Founders to waste months of their life stuck on a tarpet like they're very tantalizing from a distance because they're so superficially plausible as startup ideas ([View Highlight](https://read.readwise.io/read/01hmj3sd5te90fb19t0n1sh44b)) ^9ab330 - 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 just like Googling for their own startup idea to see who has worked on it in the past you should find who's worked on this in the past and actually talk to them if you can try to figure out what the hard part of this idea is that has caused other people to not be able to solve it yet ([View Highlight](https://read.readwise.io/read/01hmj3x0yemk07hb46svmshcz8)) - 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 place that you want to be ([View Highlight](https://read.readwise.io/read/01hmj3yp6n7x5n2c7k14cs3s4g)) ^12b466 - the first one is do you have founder market fit if I depict like one most important criteria it'd probably be this one and what I mean by founder market fit is just are you the right team to be working on this idea ([View Highlight](https://read.readwise.io/read/01hmj4086hqwd60b95133q3wrf)) ^033e51 - that's what good founder market fit looks like it's like this team is obviously the right team to work on the idea in fact founder market fit is so important that I would recast your search for a startup idea when most people go to pick a startup idea they try to look for a good startup idea like in the abstract and instead I would think about this exercise as an exercise to pick a good idea for your team you with me it doesn't matter if something is a good startup idea for someone else if it's not a good idea for your team ([View Highlight](https://read.readwise.io/read/01hmj42c0rdqj6q60eg1hjksh2)) - obviously you need a big Market which for startups typically means like a billion dollar market but actually less 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 got started in 2012 the Bitcoin trading Market was minuscule but even at that time it was pretty obvious that if Bitcoin succeeded the way people hoped that it would that this would eventually be a billion dollar market number three how acute is this problem ([View Highlight](https://read.readwise.io/read/01hmj44cym3phw6wbt5as3wdb1)) - here's an example of what a good problem looks like Rex so Brax from Winter 2017 makes a credit card for startups and before brex if a startup NYC wanted a corporate credit card they literally could not get one because a no bank would give a credit card to a startup that's a good problem like if you're if the alternative to your solution is literally nothing that's what a good problem looks like ([View Highlight](https://read.readwise.io/read/01hmj46s8000g50ht14vdhte41)) - do you have competition now most Founders think that if you have competition that that's bad but counter-intuitively it is the opposite most good startup ideas have competition but if you were going up against especially entrenched competition you typically need a new insight ([View Highlight](https://read.readwise.io/read/01hmj47wgmyvwprb771d2x7efp)) - there were at the time already a bunch of large existing companies that run background checks but they weren't well suited for this very new use case and that is like exactly the kind of change in the world that creates a new opportunity ([View Highlight](https://read.readwise.io/read/01hmj4c6v4av2n4cn64me0h12p)) - s this an idea you'd want to work on for years but this is a tricky one like sure if the answer to this question is yes that's a good sign but often it's not often an idea grows on Founders over time as it starts to work as I'm going to talk about in a moment a lot of the best startup ideas are in boring spaces like tax accounting software or something like that like no one is particularly passionate about like nobody starts off being passionate about tax accounting software um but tax accounting software is probably a good business and if you're actually running a successful business you tend to become passionate about it over time okay is this a scalable business so if you're building pure software the answer is yes because software skills infinitely and you can just like check this one off ([View Highlight](https://read.readwise.io/read/01hmj4fw4nhyvgt80faefpsbe4)) - okay before I talk about how to generate startup ideas I've got one important topic to tell you about these are three things that make your startup idea seem bad but actually make them good and the reason that they make them good is that most Founders will shy away from ideas like these which leaves them on the table for smarter Founders to go and 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 terrific article about this called schlep blindness which I'd really recommend reading and the example that Paul discusses is stripe you all know stripe they make it easy to integrate credit card payments to your website and the fascinating thing about stripe is that when stripe launched there were thousands of developers who already knew that this was a problem they had tried to integrate credit card payments to their site and they realized that the existing options sucked but strangely not one of them even tried to start striping and it's kind of a kind of a fascinating question why nobody else tried when so many people were in a perfect position to see this problem and the reason is that getting started building stripe required some things that seemed really hard you had to get a special deal with a bank you get to learn a lot about the nitty-gritty details of credit card infrastructure those things seemed so hard that they scared off all the other people who might have started stripe which caused them to leave this like 100 billion dollar opportunity on the table for the stripe ([View Highlight](https://read.readwise.io/read/01hmj4s9s13zazygtbt5j21tce)) ## New highlights added January 19, 2024 at 8:38 PM - Gusto which makes payroll software payroll software pretty boring right the thing is there are thousands of people who must have realized that payroll software sucked but because it was kind of a boring problem nobody tried to fix it until the Gusto Founders came along and the thing is that because most Founders shy away from ideas like this boring ideas like payroll software have a much higher hit rate than fun ideas like apps to find new restaurants to eat at or like apps to find the next song to listen to something like that like fun ideas get picked over boring ideas get left on the table for a long time ([View Highlight](https://read.readwise.io/read/01hmj56tndzmm9zw69e1dhhqy8)) - even if you work on an idea that sounds fun at the outset the day-to-day reality of your startup is going to be mostly the same anyway either way you'll be mostly writing code fixing bugs talking to users like pretty much the same stuff ([View Highlight](https://read.readwise.io/read/01hmj58benb9r3p3h512e008dw)) - would argue that once the initial excitement of your idea has worn off and you are 6 or 12 months in and you are grinding out the execution that makes your idea actually work how fun the initial idea sounded actually has little to no correlation with how much fun you will actually be having working on your company ([View Highlight](https://read.readwise.io/read/01hmj59jqfhv0834pp0s5p970g)) - counter-intuitively most startup ideas most good startup ideas have existing competitors when founders go into spaces with no existing competitors they often find out that the reason that there are no competitors is because no one wants the product a great situation is actually a market where there are existing competitors but you've noticed something that they all seem to have missed or they all just kind of suck a classic example of this is Dropbox so when Dropbox launched they were already about 20. cloud-based file storage companies Dropbox was like the 20th company and it's space to launch naively you might have thought that that made this a bad Market ([View Highlight](https://read.readwise.io/read/01hmj5ag72y7zrz92f2pnvx751)) - oh there are already 20 competitors it seems like a bad Market to go into but if you were Savvy about startup ideas you would have realized that it actually made it a great Market and the reason is that even though there were like 20 companies doing this most people didn't use any of them and that strongly suggests that there actually was a problem here but the existing products hadn't solved it and Drew the founder of Dropbox had a very specific insight about what all of them were missing his Insight was basically their UI sucked and the reason their UI stopped was that at the time the way that they all worked is you had to like go to their website and manually upload your files one at a time into their website which sucked of course and Drew had really a technical Insight which was that if he integrated directly into the host operating system he could just sync your files automatically without you having to do anything and that was a real step function change in how convenient these Services were to use and that was the right insight okay 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 best way the best way to have startup ideas is to just notice them organically and if you look at the YC top 100 companies at least 70 percent of them have their startup ideas organically ([View Highlight](https://read.readwise.io/read/01hmj5cyazpe8fhkrbdxp6atd7)) - the problem is that when people sit down and try to think of startup ideas they tend to think of bad ones they're especially likely to think of the same set of tar pit ideas that I talked about earlier whereas startup ideas that occur to you organically are more likely to be good ones ([View Highlight](https://read.readwise.io/read/01hmj5szmv5by2s9prfnp60fsx)) - the best one start with what your team is especially good at and think of ideas that take advantage of your expertise ([View Highlight](https://read.readwise.io/read/01hmj5xz6mzrdvw131h2tav20m)) - the reason that this is so effective is that any idea you come up with this way has automatic founder market fit do you see how this is almost like a hack to generate the ([View Highlight](https://read.readwise.io/read/01hmj5ycg66bea88eqd5hdtrk3)) - 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 founders like are actually legitimate experts in something but the idea that they're applying with is like something completely different ([View Highlight](https://read.readwise.io/read/01hmj67bz67c8hfsw0wwf7nxa7)) - for each founder on your team go through every job you've ever had plus all your internships plus like other life experiences and think really carefully about each of them what problems did you come across what did you learn that other people don't know What are problems or opportunities that you've been in kind of a special position to see those are the best places to start looking for startup ideas okay the next one is to just think of things you personally wish existed this is like a really classic recipe this is very common advice great example of this is doordash the short story of doordash is that the founders of doordash were undergrads at Stanford and the thing they really wanted was to be able to just order food from local restaurants and have it delivered to their dorm and before doordash you couldn't do that so 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 a second is there a reason why this thing doesn't exist yet okay the next one is to look for things in the world that have changed recently that might have created a new opportunity a great example of this is covet so when the pandemic started it changed daily life for all of us and many Founders realize that this created the opportunity for new companies and some very successful startups came out of it and one of them is this company called gather town which builds like this fun way to h ([View Highlight](https://read.readwise.io/read/01hmj6g3te91zzcjw0egqv5g97)) - I love the example of a to B Because A to B is one of the best new ideas to come out of YC in several years A to B is a phenomenal company and the approach that they used to find this idea is something that really anyone could do and most Founders don't do this because it just sounds like too much work so if you're willing to put in the work this is an amazing way to find a startup idea ([View Highlight](https://read.readwise.io/read/01hmj6wa65pbpr9c0f1byzwca5)) - I want to leave you with is just to remember that it's often hard to tell if a startup idea is good or not and so while I hope the concepts that I talked about here will help typically the only way to know for sure if your startup idea is good is to Just Launch it and find out so if after all this you've got a startup idea and you're still kind of on the fence about whether it's actually a good idea or not that is my advice for you just launch it and find it ([View Highlight](https://read.readwise.io/read/01hmj72d3zybspe03g94btsk3y)) ## New highlights added January 22, 2024 at 8:25 PM - 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 ([View Highlight](https://read.readwise.io/read/01hmsx5e892w9jft4e9cwhj2yb)) - like jump into the first idea they have without even stopping to consider whether it would actually make a good business ([View Highlight](https://read.readwise.io/read/01hmsxa2sh8532tmxm7hdvfksm))