How to Get and Evaluate Startup Ideas | Startup School

The speaker begins by emphasizing the importance of discussing startup ideas and providing a sophisticated approach to thinking about them, as done at Y Combinator (YC). They clarify that no one can predict which ideas will succeed, but some are more likely than others. The talk is based on an analysis of the top 100 YC companies, insights from Paul Graham's essay, experience helping YC companies pivot, and learning from mistakes in rejected YC applications. The talk is divided into three parts: common mistakes with startup ideas, evaluating the quality of an idea, and generating new ideas. The most common mistake is creating a solution without a real problem, known as a 'solution in search of a problem.' The speaker advises falling in love with a problem rather than a solution and warns against 'tar pit' ideas that seem promising but lead nowhere.

The speaker discusses common mistakes made with startup ideas, such as building something that doesn't solve a real problem ('solution in search of a problem'), getting stuck on 'tar pit' ideas that are perpetually unproductive, and not considering whether an idea would make a good business. They also caution against waiting for the perfect idea, which doesn't exist, and instead suggest starting with a good initial idea that can evolve. A framework of 10 key questions is provided to evaluate startup ideas, starting with 'founder-market fit,' where the team's expertise aligns with the idea. The market size, problem acuteness, competition, personal desire for the solution, and recent changes enabling or necessitating the idea are also considered. The speaker highlights the importance of picking a good 'idea space' with a high success rate and founder fit.

The speaker identifies three factors that can make startup ideas seem unappealing but are actually beneficial because they deter most founders, leaving opportunities for the more astute: ideas that are hard to get started, ideas in a boring space, and ideas with existing competitors. They discuss 'schlep blindness,' where the perceived difficulty of starting up, such as Stripe's need for banking deals and technical knowledge, scares off potential founders. The speaker also argues that boring ideas like payroll software (Gusto) are often more successful because they are less crowded, and that competition can indicate an unsolved problem, as seen with Dropbox's innovative approach to file storage.

The speaker suggests that the best startup ideas come organically rather than from forced brainstorming. They recommend becoming an expert in a valuable field, working at a startup to gain expertise, and building things out of personal interest as ways to naturally encounter good startup ideas. The speaker also provides seven strategies for generating startup ideas: leveraging team expertise, starting with a personal problem encountered, wishing for something that doesn't exist, identifying recent changes that create opportunities, looking at successful companies for new variants, talking to people about their problems, and examining broken big industries. They also mention a bonus strategy of finding a co-founder with an existing idea.

The speaker shares a detailed example of how the founders of A to B, a company that makes fuel cards for truck drivers, systematically searched for a startup idea. Despite not being experts in the trucking industry, they chose it as a 'fertile idea space' due to its size and lack of disruption by startups. To become experts, they visited truck stops to talk to drivers about their problems and spoke with founders of existing companies in the space. This approach led them to identify fuel cards as a valuable problem to solve, demonstrating a method that any founder can use to find a startup idea, albeit with significant effort.

The speaker concludes with the advice that it's often difficult to determine if a startup idea is truly good, and the only sure way to find out is to launch the idea and see how it fares in the market. They encourage founders who are unsure about their idea to take the leap and launch, emphasizing that the process of bringing an idea to market will provide the clarity needed to assess its potential.