KHOI | Blog

How to get & evaluate startup ideas?

Thu, Feb 23, 2023 · 7 min read
Table of contents

YC YouTube video

4 most common mistakes

  1. Not solving a real problem.

    • Do not make solutions in search of a problem.
    • Fall in love of a problem → Find a high-quality problem.
  2. Getting stuck on tarpit ideas.

    • What causes tarpit ideas?
      • Widespread problem that lots of potential founders encounter.
      • Seems like it could be easily solvable with a startup.
      • There’s a structural reason why it’s very difficult to solve.
    • How to avoid?
      • Google! Look for previous founders who have tackled this.
  3. Not evaluating your idea.

  4. Waiting for the perfect idea.

    …your initial idea as a good starting point…ideas morph over time. - Paul Graham

10 Key questions to ask

  1. Founder market fit
    • Are you the right team?
    • Pick a good idea for your team.
  2. How big is the market?
    • 2 good markets for startups: big now & small but growing rapidly.
  3. How accute is the problem?
  4. Do you have competition?
    • Most good ideas have competition.
  5. Do you want this personally or know people who want this?
  6. Did this recently become possible or become necessary?
    • Eg: Checkr (API for background check) took off when Doordash, Uber were hiring a pool of gig workers.
  7. Are there good proxies?
    • Proxy: large company that does something similar to your startup.
  8. Is this an idea you want to work on for years?
  9. Is this scalable?
    • Software is highly scalable.
  10. Is this a good idea space?
    • Idea space: one level abstraction out from a particular startup ideas. It’s a class of closely related startup ideas. Eg: software for hospitals, etc.
    • If you are in a good idea space, the success rate is astonishingly high. Idea space becomes hot and cold over time.

3 things that make an idea seem bad, but actually make it good

  1. Hard to get started. Eg: Stripe
  2. Boring space. Eg: Gusto
    • The day to day stuff is gonna be the same anyway.
  3. Existing competitors.
    • Eg: Dropbox. When Dropbox was launched, there were 20 file storage companies. Dropbox found out that their UI suck. Competitors didn’t have a way to sync directly with the local filesystem.

Set yourself up

  • Become an expert on something valuable.
  • Work at a startup
  • Build things you find interesting. Eg: Replit

Generating startup ideas (ordered by most likely)

  1. Start with what your team is especially good at. → Founder market fit.

  2. Start with a problem you’ve encountered.

    Think of every job you’ve had (+ internships + life experience) What are problems/opportunities you’ve been in a special condition to see?

  3. Think of things you personally wish existed.

  4. Look for things in the world that have changed recently. Eg: Gathertown - fun way to hang out online during COVID.

  5. Look for new variants of successful companies. Eg: Nuvo Cargo - logistics/Flexport for LatAm.

  6. Talk to people and ask them what problems they have.

    • However, you need to have lots of skills.
    • First, pick an idea space and talk to people within that space. Talk to founders in that space

    Eg: AtoB.

    1. They picked an idea space - Trucking industry.
    2. Drove to truck stops and talk to potential users.
    3. Asked other founders about the industry.
    4. Evaluated several ideas before picking fuel cards.
  7. Look for big industries that seem broken.

  8. Look for a co-founder.