Episode 128 | 9 Steps for Finding Startup Ideas

Startups For the Rest of Us

Episode 128 | 9 Steps for Finding Startup Ideas

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Show Notes

• FreedomPop – free 4G mifi (up to 500MB/month)
• HelpHonza – Startup marketing research study for a Bachelors Thesis
• Sweet Process – for documenting your processes
• The Launch Pad: Inside Y-Combinator – a new book that tells the story of Y-Combinator
• How to Get Startup Ideas by Paul Graham

Transcript

[00:00] Rob: In this episode of Startups for the Rest of Us, Mike and I are going to be talking about Nine Steps for Finding Startup Ideas. This is Startups for the Rest of Us: Episode 128.

[00:08] Music

[00:16] Rob: Welcome to Startups for the Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.

[00:25] Mike: And I’m Mike.

[00:26] Rob: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Mike?

[00:31] Mike: A couple of weeks ago, we did an episode on working outside of the office and Steve wrote in and said, “Hey, I love the podcast. I was listening to the most recent episode on discussion of tethering. I just recently got a MiFi from freedompop.com which is a pay-as-you-go provider. You buy the MiFi for $99 then you get 500 megabytes a month for free. If you need more, the rates are pretty reasonable. It’s really nice to see that you can basically pay for just the hardware and then you get data allowance for free. It doesn’t seem like there is a monthly fee associated with that unless you go over that…that data amount.”

[01:02] Rob: Yeah, I really like what FreedomPop is doing. They actually buy excess bandwidth from Sprint I think it is. It’s 4G but it’s not LTE. It’s HSPA+ which is a little slower than LTE but it’s still faster than a lot of the cable modems you’ll have in your house. They have a great business model I think where it’s a freemium business model and you know, as long as they have the money to last, I think they can do it.  I actually have one of this. I have the MiFi. The problem where I live is it there is no service here and I was a bit surprised by that because I had assumed that they would have service anywhere that Sprint has data service. But for some reason, the entire central area of California both all the way from Fresno over to the coast, I drove up in down the coast with that on just kind of sitting on my dash while I was driving in to the beach one day and I never got once got a signal.

[01:49] So – but you know, you can enter your zip code on the website before you order it and they will tell you if they have service there or not and it told me it didn’t have a service where I live but that wasn’t unexpected. But I’d hope that there’d be some other service within  – I mean I literally drove 250 miles and never got service. But I imagine if you’re in the metro area, this is a no-brainer in my opinion to drop the 99 bucks and get that. It’s enough to check e-mail really easily. You know, 500 megs a month, this is a decent amount of data as long as you’re trying to stream anything.

[02:16] So, hey a student named Honza, he’s studying marketing in the Czech Republic and he’s writing a bachelor’s thesis about low cost campaigns, marketing campaigns for startups. So, he’s running this survey and he’s created a micro site to – to kind of tell you the full story, there’s a picture of himself. He put it up at HelpHonza.com. So, it’s honza.com. Guys from Airbnb, 500 Startups, Socialbakers, About.me, they’ve all filled it in. Frankly, I’m interested to see the data. He said the data are all going to be anonymized and published in his thesis. And so, it’s not like, you know, your secret marketing tactics are going to be given away. It’s cool. You know, he asked stuff about the gorilla marketing and other things like that. So, HelpHonza or Honza, honza.com if you are a startup or have launched an app and have anything to offer. He needs 300 respondents in order to have enough results to actually publish the paper. So, give him a hand if you can.

[03:10] Mike: Yeah, I filled that as…that out as well. It’s a pretty cool study and it’ll definitely be interesting to see what comes out of that and what sorts of I guess ideas and things that other people are doing come out of it.

[03:21] Rob: I agree. So, I also want to give a congratulations to Brian Casel. He’s just launched SweetProcess.com which is a tool for documenting processes. So, it’s designed to help business owners put together like SOPs or in my case, really nice for documenting processes to hand off to VAs. So, even if you’re not interested in doing those particular things, still head over to the site SweetProcess.com because the design is really nice and they’ve done an excellent job of communicating their value proposition. So, if you are going to be putting up a website or you want to figure – take – get some tips on how to improve your SaaS app value prop, give there’s a look  because there’s something to be learn from how well their site is put together.

[04:05] Last thing, I’ve been reading a book called The Launch Pad: Inside Y Combinator and it’s basically written by journalist who have unfettered access to a single Y Combinator cohort. It’s an interesting book. I mean I think the big takeaway – I’m about halfway through. The big takeaway is just how optimize Paul Graham is for launching startups and how good he is at figuring out how to ship startups and come up with startup ideas and just nurture startups along. It’s really, really impressive to hear the interactions that he has with these aspiring founders. A lot of them are in their 20’s and are really, you know, just trying to figure out what’s going on and he is just an – sounds like an amazing mentor and just, you know, obviously very knowledgeable in the startup space.

[04:46] It reminded me of how – just how much knowledge and advice I’ve gained from Paul Graham over the years. I started reading his essays way back. I think it was 2001 maybe when he started publishing but I’ve read his first book when it came out. I was a big fan of his and as I was listening to this book, I realized, you know, there’s a lot here that you and I could just chew on from episode after episode but I wanted to just pick one area and kind of look at how Paul Graham examines that and how he thinks about it.

[05:16] And so, I went online and he as this awesome essay called How to Get Startup Ideas and it’s at paulgraham.com/startupideas.html. We’ll link to it in the show notes. But it’s a pretty long essay and he goes through all the steps that he talks about for how to get startup ideas and how to think about getting startup ideas. And I pulled out nine steps and there are more steps in there. He doesn’t have it listed the steps. He just has prose, paragraphs of prose but we want to kind of put it in to, you know, nine bullet points that we could be able to push around on the podcast to kind of giving idea of how Paul Graham thinks about things, how he thinks about starting and thinking of startup ideas.

[05:53] So to begin, I’m going to read a little excerpt from him. He says – it’s from this essay. He says, “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.” And this is the part that I like the most. He says, “At YC we call these ‘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. So, unless they were amazingly lucky, the writers would come up with an idea that sounded plausible, but was actually bad.”

[06:30] That’s kind of the intro to this article that he writes. I’m not sure I agree with him a hundred percent. I’m not sure that thinking of startup ideas is something you should never do or that necessarily yields a lot of bad startup ideas. I guess it depends on how you think about it. If you start with a problem and try to think of ideas around how to solve that problem, I think that’s a good way to go. I think if you just sit around and try to randomly think of startup ideas, they’re going to obviously be, you know, a lot of danger that you’re going to build something no one wants.

[06:58] Mike: I tend to agree with you. I think that it’s also a difference between whether you’re trying to think of solutions to problems or you’re just trying to think of ideas. I mean I’ve seen some really cool technologies out there where I’ve looked at them and I said, “Oh, it’ll be really cool to build X,” and on the surface, it’s like, “Oh, that could be a great company that kind of build something around,” but at the same time if you’re not actually solving somebody’s problem, then who’s going to pay for? And I think that people tend to focus too much on, you know, the technology side of it or how cool something would be when it’s finished versus, you know, what problem it’s actually solving and who’s going to pay to solve that problem.

[07:32] So, you know, those are kind of all the issues and I tend to agree with him when he says that if you’re just trying to think up startup ideas, sure, you know, that’s going to happen but if you’re trying to think of problems to solve, then it’s a completely different scenario and I don’t think that that applies.

[07:46] Rob: Yeah, I would agree. The last few times I have tried to think of startup ideas I started with the question “What problems do X have?” And whether X was startup founders or entrepreneurs or whatever, you know, sort of group of  people that I wanted to help. That was…that was the question and then I would write a bunch of answers and then figure out which of those can be translated in to an app.

[08:09] One other thing I’ll note is that Paul Graham since he does, you know, obviously runs Y Combinator and they’re going after venture funding, his ideas are — do tend to be bigger, right? They do tend to want larger ideas that are going to scale up and hit big markets and obviously, that’s not what we’re about here. There are going to be some differences of opinion for sure in a way that he approaches things. I know a bit later in the essay he actually does talk about just hacking around with new technologies is a way to kind of find startup ideas. And I’ve never found that to be true but perhaps if you’re looking to build a hundred million dollar startup, that’s the way you get there.

[08:43] Music

[08:46] Rob: Step one is “Don’t try to think of ideas, notice them.” And Paul Graham says, “At Y Combinator, we call ideas that grow naturally out of the founders’ own experiences organic startup ideas. The most successful startups almost always begin this way. Since what you need to do here is loosen up your own mind, it may be best not to make too much of a direct frontal attack on the problem, in other words, to sit down and try to think of ideas. The best plan maybe just to keep a background process running, looking for things that seem to be missing. Work on hard problems, driven mainly by curiosity but have a second self watching over your shoulder taking notes of gaps and anomalies.”

[09:23] Mike: I really agree with this idea of using your own experiences because throughout the course of your career, people tend to run in to different things where they’re trying to accomplish something and it just seems dramatically more difficult than it really should be. So, there’s all these problems that you probably run in to over the years that you look at and say, “Oh, well, why is this such a pain in the neck?” And you figure out a way around it but you don’t necessarily actually solve the problem or solve it in a way that would be useful to a lot of people.

[09:50] One thing that I can think of right off the top of my head that is exactly like this is Dropbox. I mean sharing files and synchronizing them between two different machines has been a nightmare. It’s been a nightmare  for years and years and years. And then Dropbox came along and somebody said, “Hey, well, I want to make this particular problem easier.” And they did it and they did it in a spectacular fashion and Dropbox is taking the world by storm and its got a lot of clones out there as well and it’s not to say that clones are bad. I mean I think it certainly helps in the market to have some of that competition because it drives innovation in the market. It’s a classic example I’d say of, you know, somebody who recognized that there was a problem out there that they had ran in to and they wanted to be able to solve it and by coming up with a solution based on his own experience of having that problem, it came out spectacular.

[10:36] Rob: Yeah, it’s good that you mentioned Dropbox because they were a YC company and we’ll actually talk a little bit about them later in this episode. In terms of noticing ideas, I do think that that’s the best way to come up with them instead of the frontal attack, but I would also highly, highly recommend that you get some type of idea notebook or idea Google doc or just something to capture all the ideas you’re going to have because not only are you going to come up with, you know, if you really have it as a background process, you’re going to come up with an idea a week or three ideas a week or you just going to come up with too many for you to remember and tracking those is critical because you can flip back a year or two later and realized, wow, this idea is exceptional. But what it can also do is served as a brainstorming thing for you to go back to your ideas even if none of them are any good, they can help spark a new brainstorm ideas and help kind of guide you in to thinking about things in a new way coming back to your own notes.

[11:29] Music

[11:32] Rob: So, step two is to “Prepare your mind and expose it to many stimuli.” Paul Graham says, “If you look at the way successful founders have had their ideas, it’s generally the result of some external stimulus hitting a prepared mind. Bill Gates and Paul Allen hear about the Altair,” which is an early computer, “And they think ‘I bet we could write a Basic interpreter for it.’ Drew Houston,” he’s a founder of Dropbox, “…realizes he’s forgotten his USB stick and thinks ‘I really need to make my files live  online.’ Lots of people heard about the Altair. Lots forgot USB sticks. The reason those stimuli caused those founders to start companies was that their experiences had prepared them to notice the opportunities they represented.”

[12:13] Mike: I think part of this is also the ability to understand technology. It kind of a fundamental level. I mean if you understand the types of things that can be done, it’s not just about recognizing the problem but it’s also about knowing what can be done to solve that problem. Part of this is also exposing your mind to a bunch of different stimulus and in these particular cases, they happened to run against this particular problem.

[12:36] Now, if Drew Houston had never ran in to a problem of forgetting his USB stick or Bill Gates and Paul Allen hadn’t heard of the Altair, would any of those other things have happened, chances are probably not because I doubt that they would have sat down and just come up with the ideas for either Dropbox or for a basic on their own. But it is the fact that those other things kind of factored in to their lives and they were exposed to them which really kind of drove them to build the things that they did.

[13:02] So, you definitely want to keep an eye out on, you know, where else is out there on the market? What are the things are going on? You really can’t just throw yourself in your basement and work on solving a problem for six months or two years or whatever. You really have to be paying attention to the other things that are really going on in the world.

[13:17] Rob: I really like this idea of preparing your mind and exposing it to many stimuli. I think the “preparing your mind” part is to be open and aware of things that are going on around you in terms of problems people are having, problems you’re having, just anything that could essentially make your life easier on a day-to-day basis and realizing if there’s a technology solution to that that it could potentially be a product idea.

[13:40] And the second part is exposing yourself to many stimuli. This is the part that I am a huge proponent of. Anytime that I’m trying to brainstorm things whether it is app ideas or whether it is a marketing plan, whether it’s ideas for the podcast or blog post, I am looking for external stimuli both inside my discipline and outside. And this is a reason that I listen to so many audio books, that I listen to so many podcasts and then I use to when I had more time read blogs and read books. I just find that that exposing yourself to all the stimuli creates creativity. You can of course overdo it and you can over stimulate yourself and you can never retain anything that can happen. But if you keep it at a reasonable level, even listening to things outside of your discipline, listening to creativity podcast or reading about architecture or having a hobby, just in some other area that’s not technology can absolutely shape your mind, just make you think a little differently than everyone else is and essentially, it prepares your mind then it goes those startup ideas going. And if you’re tracking them in a notebook, like I said, over a long period of time, you can really arrive at some gems.

[14:44] Step three is “Get to the leading edge of a field.” Paul says, “If you’re not at the leading edge of some rapidly changing field, you can get to one. For example, anyone reasonably smart can probably get to an edge of programming, for example, building mobile apps in a year. Since a successful startup will consume at least 3-5 years of your life, a year’s preparation would be a reasonable investment especially if you’re also looking for a cofounder. You don’t have to learn programming to be at the leading edge of a domain that’s changing fast. Other domains change fast. But while learning to hack is not necessary, it is for the foreseeable future sufficient. As Marc Andreessen put it, software is eating the world, and this trend has decades left to run.”

[15:24] Mike: I think this is probably one of the several paths that you could go down. I think that, you know, Paul Graham kind of illustrates a bunch of different ways for finding startup ideas and obviously, this fits in to one of them. Kind of brings to mind the story of Bill Bither from Atalasoft who spoke last year at MicroConf who came in and he started his company back in 2000, 2001 and what he did was he built the company on the back of a .NET imaging component. And you know, C-Sharp was relatively new at the time. They really weren’t any other .NET imaging components out there. There were some imaging components but not in  .NET. So, he went ahead. He built one and he was kind of at the leading edge of that field and fast forward, ten years later and he sold the company for millions of dollars and cashed out.

[16:10] So, you know, you can definitely do that and I can think of other examples as well. I mean, you know, you look at Oracle. They’re on the edge of databases back where databases were first being built and I think he’s right. I mean I think if you look at any given field that year timeframe that he’s talking about is in some ways just talking about becoming an expert in that field such that you are on the bleeding edge. So, if you wanted to look at rails development, you could start looking at that stuff, make sure reading back to the source code. If you wanted to do the same thing with the Linux Kernel, you could do that. I mean there’s a lot of different ways that you could go about this and it’s a matter of picking a field that interests you and then building a business that’s essentially starting at the edge of that field and then over the next three or five years, you kind of maintain, you know, the company being at the edge of that field.

[16:54] Rob: Yeah, I don’t feel like I had a realistic view of what this really meant before I became a professional programmer because before that I looked at the startup space and I thought it was just all about finding ideas and generating the next novel thing because that’s kind of how the press in the mainstream media and just people talk about it, right? It’s like you needed an idea and you could raise some money and build this thing. And as soon as I started programming, I realized wow, it takes away – number one, it takes way more than that. Number two, that there are a lot of very skilled developers who can build things themselves who also have their own ideas.

[17:27] And so, the bottom line is until you really get emerge in to a field and you’re kind of pushing the boundaries of it, I think that you’re way behind the pack. It’s not to say that you can’t come in as an outsider and do something, it’s just the odds are much, much lower. And I think I would have offer a simpler version of this and it would just say, “Do something in public.” Like even if you can’t get to the leading edge of the field right now, start blogging about something related to what you want to do or start a podcast or start writing – learning code and start writing some code. As soon as you start doing things in public, opportunities open up, challenges rise in front of you and you, hopefully, rise to greet them. Just things start happening once you actually make yourself vulnerable enough that you put something out in to the world that other people can look out.

[18:13] Steve Jobs said great artists ship and in my opinion until you’ve shipped, you just have no chance of really understanding what it’s like to launch a product and you’re way far behind in the raise of actually launching a good one because there are people out there who’ve launched multiple successful and they’re your competition. And so you have to get there too. So, ship early, ship often. You know, as Paul Graham says get to the leading edge of a field.

[18:37] Music

[18:40] Rob: Step four of our Nine Steps for Finding Startup Ideas is to “Look for something missing.” And Paul says in the essay, “If you’re really at the leading edge of a rapidly changing field, there will be things that are obviously missing. What won’t be obvious is that they’re startup ideas. So if you want to find startup ideas, don’t merely turn on the filter of ‘What’s missing?’ Also turn off every other filter, particularly ‘Could this be a big company?’ There’s plenty of time to apply that test later. But if you’re thinking about that initially, it may not only filter out lots of good ideas, but also cause you to focus on bad ones.”

[19:15] Mike: I think this one is interesting but I think it also depends a little bit on being on a field where it is changing rapidly and it’s relatively new. I think that it would be difficult to look at a field that is fairly mature and come up with things that are obviously missing that just don’t exist. I guess I would think of things like, you know, anything related to C++ or C++ libraries or databases and database development. I think that a lot of those things, they tend to be mature areas and in fact, I mean those are not just mature areas but it takes tons and tons of time and effort in order to get anywhere.

[19:51] So, I think that those are kind of classic cases of where the, you know, the field is so mature that you’re not going to be able to make much head way versus if you start looking at  either narrow aspects of that field so like database sharding for example or fault-tolerant database. Those sorts of things, they are in a large mature field but you’re looking at a very, very narrow slice where you could make some very, very rapid advances in that one specific area. And you know, I kind of like what he said about, you know, the fact that, you know, could this be a big company? Well, it could be. It could be that, you know, a highly available database could be, you know, a big business but you don’t want to necessarily say, “No, I’m not going to go after that,” because you’re not sure about it.

[20:33] Rob: You know, I think what you said echoed back to step three in terms of getting to the leading edge of a field because you brought up C++ and you’re right, it’s so mature. It’s a mature market, right? It’s just people have contributed so much to it that there isn’t a lot of innovation to be had I’ll say in terms of servicing that market whereas with – if you did C++ database sharding that is the perhaps the bleeding edge of that area.

[20:58] Step five is “Turn off your unsexy and your schlep filters.” He says, “Most programmers wish they could start a startup by just writing some brilliant code, pushing it to a server, and having users pay them lots of money. They’d prefer not to deal with tedious problems or get involved in messy ways with the real world which is a reasonable preference, because such things slow you down. But this preference is so widespread that the space of convenient startup ideas has been stripped pretty clean. If you let your mind wander a few blocks down the street to the messy, tedious ideas, you’ll find valuable ones just to sit there waiting to be implemented.”

[21:33] And when he says turn off your unsexy and your schlep filters, he means an idea can be unsexy. It can be not that interesting, a boring idea and that means fewer people are going to be going after it. And then the schlep filter he talks about is this is like trying to do a medical health record startup where you know that it’s not just about writing code, it’s about schlepping away with bureaucracy and trying to get all these things on board and there’s privacy implications or about like building Stripe and I’m pretty Stripe came through Y Combinator as well. They had to schlep through the bureaucracy of dealing with payment providers and there’s a lot of security issues and all that stuff.

[22:05] Mike: I definitely agree with this in a lot of different ways because if you start looking at problems that are boring but would probably make good money, I mean you can come up with some pretty surprising things, you know. Honestly, AuditShark and you know, going after auditing servers is not sexy in any way, shape or form but at the same time, I know that there’s money there. I’ve seen the dollar amounts that people pay for that kind of software and although it is boring, it will make money.

[22:31] So, there’s a difference between looking to be successful versus trying to look in to a certain way to appeal to exhibit that mass appeal. And you know, there’s obviously pros and cons to each one but if you’re going for mass appeal and sexy, that can be great assuming that you are doing some sort of a consumer product where people are actually going to pay for that. But if you’re looking at this is application or something like that, some of them are quite frankly pretty boring and just because they’re boring, that doesn’t mean that they won’t make a good deal of money.

[23:00] Rob: Right, we’ve always been a proponent of niche ideas and they tend to be unsexy and or need a lot of schlepping even acquiring apps and rewriting them and moving them to new servers, those are schlep ideas, right? It’s just – it’s not writing green field really interesting brand new code on cutting in – edge technology. It’s working your ass off and moving things for two or three months. It’s not that interesting but that is where at least early on I would say go after those markets like those are going to be the ideas that are going to get you going and then you can always go after the sexy and the easier idea so to speak later on once you’ve had some successes, built your confidence, have revenue, all that kind of stuff. I’m on a big proponent of going after the unsexy ideas.

[23:42] Step six is to “Stay in your area of expertise.” Paul Graham says, “When searching for ideas, look in areas where you have some expertise. If you’re a database expert, don’t build a chat app for teenagers, unless you’re also a teenager. Maybe it’s a good idea, but you can’t trust your judgment about that, so ignore it. There have to be other  ideas that involve databases, and whose quality you can judge. Do you find it hard to come up with good ideas involving databases? That’s because your expertise raises your standards. Your ideas about chat apps are just as bad, but you don’t know any better.”

[24:13] Mike: I think part of this is relying on the expertise that you have in a particular field to be able to recognize when something is a mediocre idea versus a bad idea. And you can use that in a couple of different ways but I think that the primary way that you can use it is to look at the competition that’s out there and see what they’re doing and whether the solutions that they’re coming up with are reasonable and if they’re not, then you probably don’t need to worry about them but, you know, if they’re actually making a living selling that product, then it means you stand a good chance of coming behind them with a better product and essentially cleaning their clock just because not only that you have better technology but you understand the problem better and you can probably phrase it to customers better. And therefore your expertise is going to help you get to a position where your marketing collateral is better and you’ll be able to go in the sales situations and intelligently talk about the value or the solution that you provide versus your competitors and you’ll be able to come out on top.

[25:10] Rob: I don’t necessarily agree with this one about staying in your expertise. I think that it’s ideal. I think it does improve your chance of success but I still think you can have — build a really good app and definitely make a lot of money and quit your job and do that whole thing without needing to be the target market for your app. And he tends to say, “Basically, try to build something for yourself that you’re going to use,” and I just – I don’t necessarily agree with that. I mean I think we’ve talked a lot about finding more niches, you know, if you’re not a lawyer, it doesn’t mean you can’t build software for lawyers. If you’re not a realtor, it doesn’t mean you can’t build software for realtors. But if your area of expertise is that you’ve built a lot of database-driven applications and you know how to code and potentially, you know how to design and build the SaaS front and end and potentially know how to market then I think that you can go outside that in one of those areas.

[25:57] Now, if you don’t know anything about building SaaS  apps or marketing or realtors, then yeah, trying to build a SaaS app for realtors is going to be a real challenge but I think if you have one or more areas that are overlapping with your idea, I think that’s sufficient. I would agree with him that it’s ideal to stay within your area of expertise but I’d just wouldn’t make it, you know, a rule.

[26:17] Mike: Right, I mean I think all of these are general guidelines. They are not hard and fast rules. I mean you can’t look at any given one of these areas and say that you have to do this or you will not be successful. I mean I think if you’re able to find something that overlaps in all nine of them, you have a much better chance than if it applies to none of them. So, I think to stay in your area of expertise is good advice but you also have to keep in mind that Paul Graham tends to write from his point of view. In his point of view is going to be companies that he wants to invest in, he’s going to want you to have expertise in that particular area because if you bring expertise to the table for a particular products or company that you are bringing to market, you’re going to be much better off than somebody who has no idea anything about it and just trying to build something without really understanding a lot of the things that go in to it on the back end and they didn’t build a career out of it.

[27:08] They just opened up a book one day or a magazine and said, “Oh, well, Fast Company said that this is the next hot area. So, I’m going to build a product and a company around it.” And they don’t know anything about it whereas you may have three or four or ten years of experience in that particular area and that you’ll be able to just walk all over them because they’re still coming up to speed while you’ve got that background of expertise that they don’t. And it’s very hard to replicate that expertise.

[27:32] Music

[27:35] Rob: Step seven is to “Choose an obvious idea.” And Paul says, “When you find the right sort of problem, you should probably be able to describe it as obvious, at least to you. Which means, strangely enough, that coming up with startup ideas is a question of seeing the obvious. That suggests how weird this process is. You’re trying to see things that are obvious, and yet that you hadn’t seen.”

[27:55] Mike: I think this rolls a little bit in to the previous one where if you have enough expertise in an area then the solution is obvious to you but to a casual observer, it’s probably not.

[28:05] Rob: Yeah, I think I’d agree with him on this one. I do think the best startup ideas are did do tend to be obvious to someone who has expertise in that arena. Step eight is to “Give yourself time.” And he says, “You have a lot of control over the rate at which you turn yours into a prepared mind, but you have less control over the stimuli that spark ideas when they hit it. If Bill Gates and Paul Allen had constrained themselves to come up with a startup idea in one month, what if they’d chosen a month before the Altair appeared? They probably would have worked on a less promising idea. Drew Houston did work on a less promising idea before Dropbox: an SAT prep startup. But Dropbox was a much better idea, both in the absolute sense and also as a match for his skills.”

[28:46] Mike: I think this is just a lot about not restricting yourself to one idea. If you’re working on something and a better idea comes along, I think it’s just keeping your mind open to the fact that whatever you’re working on, may not be the best use of your time and if you give yourself a deadline to commit to a particular project and then you would hear to it, then you could very well be missing out on a much better idea and I think that Paul is just saying don’t sell yourself short. Don’t force yourself and do constraints that don’t necessarily make any sense because what good rationale is there for saying, “Okay, I have to have a good startup idea in a month.” And if a month goes by and you have to settle on something because you’ve given yourself some arbitrary deadline, then you’re going to pick something and it may not necessarily be the greatest idea and because you’ve committed to it, let’s say, two or three or four weeks later you come up with a better idea, well, should you switch?

[29:40] Well, according to the mental agreement you’ve made with yourself, you shouldn’t because you’ve already started on something, you picked it. And I think Paul is just saying, you know, make sure you don’t put yourself in a situation where you back yourself in to a corner and you’ve given yourself no other options. Keep your mind open.

[29:55] Rob: Yeah, I see aspiring founders and even founders who are coming back for a second or third time trying to think of  ideas in a certain timeframe because they’re antsie and I felt that myself six or seven months ago trying to acquire something and I had spent two or three months just looking at all different types of apps to acquire. People are sending them to me but nothing was a good fit and I, a couple of times, I tried to force it and I’m glad that I didn’t. I eventually, you know, went back to the playbook and came up with the idea for Drip. But having an artificial timeline like you said, it can make you yourself feel better. It can reduce anxiety but it’s really not a very good idea trying to force it and not suitably vetting your idea is a dangerous game to play.

[30:38] So, step nine is to “Find a small group of people who desperately need your idea right now.” And he says, “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. The danger of an idea like a social network for pet owners 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 use 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.”

[31:23] Mike: There’s part of this that I agree with and part of this that I disagree with. I think he’s got the right idea where you definitely need to find people who would say, “Yes, I definitely need this right now,” because those are the type of people who are willing to pay for and you want the people who are willing to pay for your product to essentially help guides you down the path of building more features and things in to the products and help shaping your marketing message such as you can acquire more customers and you can build the product out so that it is applicable to more people in your audience.

[31:53] And what he’s really getting in to the second part is that you don’t want to build something that a lot of people look at and say, “Oh, well, that’s a good idea. I think that’s interesting but, you know, I wouldn’t use it but I can see how other people will use it.” Because at that point you’re going down the path of mediocrity and going down that path essentially means that, you know, your startup idea is not going to go anywhere fast and it’s going to limp along. It’s not going to have a lot of users. It’s not going to grow very fast and you’re going to feel bad about trying to kill it because it does have some people who are using it but not a lot and it’s never really going to grow the way that you have ever envisioned it growing or the way that you want to. And eventually, you’re going to have to make a hard decision about whether you kill it or not or whether you try and sell it and get off from under it.

[32:35] I think a piece that I don’t necessarily agree with is that you have to find, you know, those people who desperately need it right now because I think that that’s a process. I think that you need to get at least something out there or at least, you know, talking to people and trying to figure out what it is that they want. And even if you’re not building exactly what they’re looking for, I mean, you know, people tend to have a very narrow view of what their problem is. And if you talk to me, I might have a specific problem and you talk to Rob and he might have a slightly different problem but if you build that solution for just me, it may not solve Rob’s problem.

[33:09] And what you need to do is you need to talk to a bunch of different people and then kind of aggregate all of their problems in to a single solution such that is solves and addresses all of those problems as oppose to solving just one person’s problem. And I think that involves talking to people. I mean you can’t just assume that everybody is going to have the same problem. They’re going to have similar problems but not exactly the same and that’s the part of that I’d say I disagree with. The idea itself is – has got to be sound and you have to build something that, you know, people are looking for. You don’t want to just kind of arbitrarily say, “Oh, well, everybody is going to have an identical problem,” because that’s probably not going to happen. They’ll be similar, just not exactly the same.

[33:44] Rob: This is why whenever I e-mail or I ask people what they think of an idea that I’ve come up with I never ask them what they did. I just ask them, “Will you use this and would you pay a very specific amount of money for this idea?” And I will lay that amount because [0:34:00] I don’t really care what their opinion is. I care about whether it solves their problem or whether they desperately needed it right now. I want them to say, “Shut up and take my money, build this right now.” And so, that is actually become my e-mails response because I get several e-mails a week of people saying, “Here’s my product, what do you think?” And I can certainly give them feedback on positioning and website design and you know, the copywriting and all that stuff but if they ask me what I think of the idea, almost always I will tell them, “I would use it,” or “I would not use it.” That’s the only answer that matters for me because my opinion about whether it will work is irrelevant.

[34:35] And then I will follow it up and say, “Go find X people.” Typically, I’ll use ten. “Go find ten people who are willing to pay you for this,” and that will answer your question way better than asking some guy’s opinion, some random person’s opinion about what they think of the idea flying because we can all sit there and think, “Yeah, I guess some people would probably want to use this,” but finding those people who really desperately need it right now, I think is a big early win for you before you start writing that first line of code.

[35:02] Music

[35:05] Rob: So, to recap the “Nine Steps for Finding Startup Ideas”, it’s from Paul Graham’s essay How to Get Startup Ideas are step one, “Don’t try to think of ideas, notice them.” Step two, “Prepare your mind and expose it to many stimuli.” Step three, “Get to the leading edge of a field.” Step four, “Look for something missing.” Step five, “Turn off your unsexy and your schlep filters.” Step six, “Stay in your area of expertise.” Step seven, “Choose an obvious idea.” Step eight, “Give yourself time” and step nine, “Find a small group of people who desperately need your idea right now.”

[35:35] Mike: If you have a question for us, you can call our voicemail number at 1-888-801-9690 or e-mail it to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from “We’re Outta Control” by MoOt used under Creative Commons. You can subscribe to us in iTunes by searching for startups or via RSS at startupsfortherestofus.com where you’ll also find a full transcript of each episode. Thanks for listening. We’ll see you next time.