How to Get and Evaluate Startup Ideas | Startup School

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Finding a promising idea (00:00:00)

Emphasizes the importance of starting with a promising idea for a startup’s success
The talk provides conceptual tools to evaluate startup ideas similar to the approach taken by Y Combinator (YC)
Acknowledges that while no one can predict with certainty which ideas will succeed, better initial ideas have higher chances

The advice is based on analysis of the top 100 YC companies by valuation and their idea origins
It is also influenced by an essay by Paul Graham, experiences with pivoting YC companies, and reading applications of rejected YC startups
Aims to help founders avoid common mistakes and provides insights into recognizing good ideas and the process of generating them

Building something that doesn’t solve a real problem for users is a top mistake, akin to a solution in search of a problem (CISP)
Falling in love with a problem is recommended, rather than being fascinated by a technology looking for an application
Avoid overly abstract societal issues and focus on specific, tractable problems instead
'Tar pit' ideas are common startup ideas that seem plausible but have structural reasons for failure, and thus they trap founders
Founders often fall for tar pit ideas because they encounter the problem frequently and believe the solution appears simple
Advises researching past attempts, understanding the structural challenges, and not insisting on pursuing "the perfect startup idea"
Suggests aiming for a "good starting point" as ideas will likely evolve and there is no perfect initial concept

Determine if you have founder-market fit; assess if your team is suited for the idea, like PlanGrid founders.
Gauge the market size and potential; consider rapidly growing small markets, similar to Coinbase in 2012.
Evaluate the problem's severity; a good problem has no existing solutions, like startups needing credit cards before Brex.
Analyze the competition; positive competition suggests a valid market, but a new insight is often needed.
Confirm personal desire and knowledge of others needing the solution; avoid ventures no one wants.
Identify recent changes in the world; consider new technologies or regulatory changes, such as Checker's background check API.
Utilize proxies; large companies in related fields, like Rappi with Doordash as a proxy in Latin America.
Consider your willingness to commit to the idea long-term; passion may develop as the business grows successful.
Question business scalability; Software scales easily, but services or labor-intensive models may not.
Choose a good idea space; an adaptable field can lead to successful pivots if the initial idea fails, similar to 5tran's journey.

Difficult startup ideas can deter others, leaving opportunities like Stripe did with credit card integration.
Ideas in unglamorous, boring spaces, such as Gusto's payroll software, may have a high hit rate due to lack of competition.
Existing competitors may indicate a valid market that hasn't been fully served, as Dropbox showed by improving UI for cloud storage.

Good startup ideas are often found organically, with 70% of YC top companies doing so.
To generate good startup ideas, become an expert in a valuable field, work at a startup, or build interesting projects even if not intended as businesses, such as how Replicon began.