How to Get and Evaluate Startup Ideas | Startup School

The speaker introduces the goal of the talk: to provide conceptual tools for thinking about startup ideas like YC. They emphasize that while no one can predict success, certain ideas are more likely to succeed. The advice draws from analyzing the top 100 YC companies, Paul Graham's essay 'How to Get Startup Ideas', experiences helping YC companies pivot, and common mistakes found in thousands of rejected YC applications.

The first mistake is building something that doesn't solve a real problem users care about, often called a 'solution in search of a problem' (CISP). An example is starting with new tech (like AI) and then looking for a problem it can solve, often leading to superficial problems. Instead, founders should 'fall in love with a problem' that is specific and tractable. The second mistake is falling into 'tar pit ideas' – widespread problems that seem easy to solve but have underlying structural reasons making them difficult or impossible. An example given is an app to efficiently coordinate social plans, which many have tried and failed. The third mistake is jumping into the first idea without considering its business potential or, conversely, waiting for a 'perfect' idea, which doesn't exist. Ideas should be seen as a 'good starting point' that can evolve.

This section outlines a framework with 10 questions to evaluate a startup idea. 1. Do you have founder-market fit? Are you the right team for this idea, with relevant experience and skills? 2. How big is the market? A big market (billion-dollar potential) is crucial, whether it's big now or rapidly growing (like Coinbase's early Bitcoin market). 3. How acute is the problem? Is it a significant problem for users, possibly with no existing alternatives (like Brex credit cards for startups)? 4. Do you have competition? Competition is often a good sign, indicating a real problem, but requires a new insight against entrenched players. 5. Do you personally want this, or do people you know want this? If not, investigate further. 6. Has it only recently become possible or necessary? Look for new technologies, regulatory changes, or problems (e.g., Checker for background checks for gig economy). 7. Are there proxies? Successful companies in similar but non-direct markets (e.g., DoorDash as a proxy for Rappi). 8. Is this an idea you'd want to work on for years? While passion can grow, consider the long-term engagement. 9. Is it a scalable business? Pure software scales well; services requiring high-skill human labor often do not. 10. Is this a good idea space? Some spaces have historically higher success rates (e.g., Fintech Infrastructure, Vertical SaaS) than others (e.g., Consumer Hardware, Social Networks).

Some traits that seem bad but are actually good indicators for startup ideas are: 1. Hard to get started: These problems often have high barriers to entry that scare off competitors (e.g., Stripe's initial banking partnerships). 2. In a boring space: Boring problems (like payroll software, Gusto) are often overlooked by founders seeking 'fun' ideas, leaving significant opportunities. 3. Existing competitors: A market with competitors but unsatisfied customers (e.g., Dropbox entering crowded cloud storage) indicates a real problem that existing solutions haven't fully addressed.

The best way to get startup ideas is to notice them organically. Organic ideas are more likely to be good, unlike explicit brainstorming which often leads to 'tar pit ideas'. To foster organic ideas for the long term: become an expert in a valuable field (e.g., by working at a startup) or build interesting things even if not immediately commercial. For immediate idea generation, seven recipes are provided: 1. Start with your team's expertise: This automatically creates founder-market fit (e.g., Rezi in real estate/fintech). 2. Start with a problem you personally encountered (e.g., VetCove for veterinarian supplies). 3. Think of things you personally wish existed (e.g., DoorDash for food delivery), but beware of tar pit ideas. 4. Look for recent changes in the world that create new opportunities (e.g., Gather Town during the pandemic). 5. Look for successful companies and create new variants (e.g., Nuvo Cargo as 'Flexport for Latin America'). 6. Talk to people and ask about their problems, ideally in a fertile idea space; talk to both potential customers and founders (e.g., A to B in the trucking industry). 7. Look for big industries that seem broken and ripe for disruption. A bonus recipe is to find a co-founder who already has an idea. The speaker concludes by emphasizing that the best way to know if an idea is good is to just launch it and find out.