How to Get and Evaluate Startup Ideas | Startup School

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.

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

[startupengineer]

How to Get and Evaluate Startup Ideas
- Do you have founder market fit?
- How big is the market?
- Big now or small but rapidly growing
- How acute is this problem?
- It’s not a problem or it’s not a problem that people care about.
- If the alternative to your solution is literally nothing then that’s great.
- Do you have competition?
- Most good startup ideas have good competition.
- If going against entrenched competition, you generally need a new insight.
- Do you or someone you know want this?
- Did this only recently become possible or necessary?
- New tech, regulatory change, new problem
- That’s often what creates a new opportunity
- Are there proxies for your business?
- A large company that does something similar to your startup, but it’s not a direct competitor.
- Is this is something you’d want to work on for years?
- Often an idea grows on founders as it begins to work.
- Is this a scalable business?
- Software - yes
- Services or anything with high skill human labor needed needs to be thought about deeply
- Is this a good idea space?
- One level of abstraction out from a particular startup idea. It’s a class of closely related startup ideas.
- Infra monitoring tools, food delivery services etc.
- Diff idea spaces have wildly different hit rates. In the last 10 years, fintech infra, vertical SaaS for enterprise had astonishingly high chances of becoming billion dollar companies. Consumer hardware and social networks were orders of magnitude lower. This changes over time.
- Fivetran worked through an idea space multiple times before getting to the thing they actually succeeded

Ideas that are hard to get started
- Stripe. Thousands of developers knew this was a problem. Getting started was super difficult.

Ideas that are boring
- Gusto. Payroll software was left alone for a long time.

Ideas that have existing competitors
- Most good startup ideas have existing competitors. The reason there are no competitors is because no one wants the product.
- A great situation is where there are existing competitors but you’ve noticed something they all seem to have missed, or they all suck.
- What’s the unique insight? Dropbox realized the UX sucked with all existing ~20 competitors. Drew realized that if you could patch into the host operating system you could sync all the files automatically. That was the right insight.

Generating organic startup ideas
- Become an expert on something valuable.
- Work at a startup.
- Build things that you find interesting.

Generating startup ideas forcefully
- Start with what your team is especially good at and think of ideas that take advantage of your expertise.
- Automatic founder market fit.
- Rezi, open-door for rental apartments. Founders had worked in real estate and debt financing. When they got into YC they spent the first month looking for ideas. They only looked at the intersection of real estate and fintech. That’s a fertile space.
- Start with a problem you’ve personally encountered, ideally one you’re in a unique position to see.
- Vetcove. Dad was a vet and was using old school ways to order supplies.
- Think of every job you’ve had (+ internships and life experiences). What problems did you come across that other people don’t know?
- Think of things that you wish existed.
- Order food from local restaurants.
- Most likely to hit tarpit ideas. Is there a structural reason this doesn’t exist?
- Look for things in the world that have changed recently that might have created a new opportunity.
- The pandemic changed daily life.
- Gathertown. Fun way to hang out with people online.
- Variants of successful companies.
- Nuvo cargo - flexport for latam. Large market, good proxies, even though he didn’t have domain expertise
- Talk to people and ask them what problems they have
- Find a fertile idea space and talk to people in the space.
- AtoB founders literally went and talked to truck drivers at pit stops and talked to founders in the space.
- Big industries that are broken
- Find a cofounder with an idea lol

[bilbobeutlin]

Him picking up the bottle and not drinking somehow triggered me so hard
Apart from that, great video

[chapterme]

Chapters (Powered by ChapterMe) -
00:00 - Finding a promising idea
00:51 - Where does this advice come from?
01:44 - 4 most common mistakes
01:47 - Not a real problem
03:12 - Getting stuck on a tarpit idea
05:38 - Not evaluating an idea (or) Waiting for the perfect idea
06:29 - 10 key questions to ask about any startup idea
06:41 - Do you have founder/market fit?
07:59 - How big is the market?
08:31 - How acute is the problem?
09:12 - Do you have competition?
09:30 - Do you want this?
09:50 - Did this recently become possible or necessary?
10:46 - Are there good proxies for this business?
11:18 - Idea you'd want to work for years
11:55 - Is this a scalable business?
12:15 - Is this a good idea space?
14:40 - 3 things that make your startup idea good
15:14 - Hard to get started
16:25 - Boring space
17:59 - Existing competitors
19:42 - How to come up with startup ideas
21:25 - 7 recipes for generating startups ideas
21:40 - What your team good at
23:31 - Start with a problem you personally encountered
24:59 - Using recipes one and two
25:44 - Personally wish existed
26:22 - Things that have changed recently
28:08 - Talk to people and ask their problems
31:16 - Big industries that seem broken

[AryanChaurasia]

I am so grateful for getting access to these high quality content! Thank you all!

[martinstine]

Great course. I got an idea on how to market myself startup while taking this course. Bunch of thanks YC and Jared.

[rupamkundu]

This is life changing advice! Keep up the good work YC!

[ivanalcazar]

Amazing that a resource like this is free. As someone who is looking into entrepreneurship after consulting, this has been helpful with trying to understand idea generation and evaluation.

[ycombinator]

What's your favorite method for coming up with startup ideas?

[razor]

17:10 Come on Jared - I was waiting for you to drink... and you did nothing 🤷‍♂- SO FRUSTRATED 😡!

[akshatjainbafna]

Your guys' explanation is so cool, I wish I had all the teachers explaining all the technical lessons with this pedagogical approach.
The way he told Hmm! AI is cool what can I apply AI to.

[itsbonakim]

This is amazing! Thank you for sharing. I'm a product designer, and while I am not looking for a start up idea right now, I think these principles are applicable at work as well. Thx!!!

[assaflaufer]

One of the best videos EVER about this topic, and I have seen a lot...

[ariellozon]

Just a great video. totally practical. totally grounded and totally based on experience. Thanks!!

[chrcz]

Amazing that you’re sharing this. Thanks. It’s adorable how he grabbed the water and never drank. I would’ve waited for you to drink so that’s my idea for him. We’re even. :)

[AlphaChinou]

This YC channel is amazing stuff. The best I have found anywhere.

[nezrinmelikova]

I really appreciate it. Really helpful and insightful video. Thanks a lot to everyone who has an effort on this video.

[AC-EP]

Thank you Mr. Friedman for the very insightful speech.

[alexk]

I don’t ever comment on videos, but this was fantastic. Tons of lightbulb moments while watching this. Thank you

[saidmuminrahmatov]

this is the most insightful material from your channel so far ! God bless that guy!!!! This speaker need to do the majority of upcoming material because of his ability to deliver his thoughts and key insights PERFECTLY!!!

[harrison]

18:30 Good point!
If not that many people are using it
and the competition sucks,
then that could be a good area to look into