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Finding Profitable Startup Ideas

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Re: Finding Profitable Startup Ideas

#31

Post by throwaway0255 »

enraged_camel wrote: post #27
bronlund wrote: post #12

Finding a good idea is the easy part.

I used to think so as well, but over the years, I've realized that execution is the easy part, at least for me. Finding good ideas, as in ideas that can lead to profitable businesses, is difficult because it requires deep domain expertise.

Yeah I used to think so too. Now I just think it's a thing people like to say to emphasize how difficult and important execution is. But execution mattering doesn't mean ideas are easy.

Ideas are really, really hard. Good ideas are the result of an extraordinary feat of luck, an extraordinary feat of outworking everyone around you to get very deep domain expertise, or a combination of both.

Re: Finding Profitable Startup Ideas

#32

Post by brucephillips »

throwaway0255 wrote: post #28
bronlund wrote: post #12

Finding a good idea is the easy part.

Really? Because I've never been able to think of one. And every successful company I've seen grew out from an idea the founder had only because they were coincidentally deeply involved in some specific area of some market and something just clicked. It all seems extremely difficult to reproduce. If it's so easy to come up with good ideas, then why does random happenstance seem to be the most common way founders come…

There's a strong bias for founders to describe their founding story as a "Eureka!" moment. Don't fall for this. Most founders come up with ideas because they're looking for them.

Re: Finding Profitable Startup Ideas

#33

Post by slinger »

throwaway0255 wrote: post #28
bronlund wrote: post #12

Finding a good idea is the easy part.

Really? Because I've never been able to think of one. And every successful company I've seen grew out from an idea the founder had only because they were coincidentally deeply involved in some specific area of some market and something just clicked. It all seems extremely difficult to reproduce. If it's so easy to come up with good ideas, then why does random happenstance seem to be the most common way founders come…

Also if it's so easy, why these kind of posts frequently appears on the front page of HN? How to find a good idea worth pursuing seems to be a common question among aspiring intrepreneurs

Re: Finding Profitable Startup Ideas

#34

Post by bufferoverflow »

FLUX-YOU wrote: post #4

Are there research firms that do ground work research, focus groups, talk to people on the street, build real professional networks to extract "problem stories" for ideas, and do competition research to the same level that e.g. short sellers might? Are these just normal market research firms, and are there boutique firms that have low-volume, high value clients?

The problem is, people's words are not reliable. You can ask 100 people "would you pay $5/month for app X", and maybe 25 will say they would, but only 3 actually will when you build it.

There only real way to avoid building a useless MVP is to ask to pre-pay for a product that doesn't exist yet.

Re: Finding Profitable Startup Ideas

#35

Post by brucephillips »

slinger wrote: post #25
csallen wrote: post #11

Earlier quoted context omitted.

This is somewhat covered in the "Industry Growth Rates" section: > At any given time, there are dozens of industries operating within new and underserved markets that are experiencing rapid growth… This almost always represents a possible entrepreneurial opportunity. His strategy might benefit from incorporating some of the things you mentioned — shifting demographics, new tech, etc. Then again, one of the most commo…

> At any given time, there are dozens of industries operating within new and underserved markets that are experiencing rapid growth IMO finding a market that is rapid growing is the most difficult part. It seems that I can never find a good idea worth pursuing.

What do you mean "worth pursuing"? Do you mean that you can't find an idea worth investigating further? Or do you mean that you can't find an idea that survives a month of concentrated market research?

The latter is reasonable. The former isn't. You should be able to come up with lots of ideas worth following up on.

Let's play a game. Someone give me a product category, and I'll list ideas that are at least worth more research.

Re: Finding Profitable Startup Ideas

#36

Post by bluetwo »

lettergram wrote: post #10

It's interesting that of the many friends I have who started companies (10 - 12), only two of them didn't receive funding. Both businesses built from scratch and now have a revenue somewhere in the neighborhood of $1m a year after two years. That's honestly pretty good IMO. The other eight or so friends who started companies accepted some form of money. Of those, only two are still in existance. The survival rate of…

I've thought about taking money, not because I need the money, but because I am interesting in tapping some expertise. However, it has always been unclear how much expertise is exchanged for startup capital.

Re: Finding Profitable Startup Ideas

#37

Post by lubujackson »

I have issue with the "Blue/Red Ocean" concept. Google is supposedly a Blue Ocean idea. Really? Sure, their approach was novel but the search market was already saturated by Alta Vista, Lycos, Yahoo, etc. You could say the same about Facebook with the competition of Friendster and MySpace.

In both cases they took a new angle that let them expand well beyond the existing market, but the market did exist and was already developed. I would say that most "Blue Ocean" ideas seem to be more like "Red Ocean, with potential upside".

Re: Finding Profitable Startup Ideas

#38

Post by brucephillips »

katzgrau wrote: post #16
kozikow wrote: post #13

Earlier quoted context omitted.

Maybe the logic is another way around? Companies that have a clear product-market fit and generate enough revenue to self-fund and don't have competition closely behind their backs have much less reason to raise. Maybe you are mistaking "They were so successful, so they didn't need to raise" with "they didn't raise, so they were successful".

As a fairly successful bootstrapper, I'd say that it's more likely that taking money generally leads to a "runway" in that you need to be profitable or raise another round by the end of that runway. Many don't succeed in either of those efforts because they tend to take on heavy expenses too early, where a bootstrapper is much more thrifty and mindful of cash flow. In the early days of my company, I applied to YCombi…

Great point. This is why I advocate for taking money early on, but only increasing burn when a profitable business model is found.

This is the best of both worlds.

Re: Finding Profitable Startup Ideas

#39

Post by pwaai »

lettergram wrote: post #10

It's interesting that of the many friends I have who started companies (10 - 12), only two of them didn't receive funding. Both businesses built from scratch and now have a revenue somewhere in the neighborhood of $1m a year after two years. That's honestly pretty good IMO. The other eight or so friends who started companies accepted some form of money. Of those, only two are still in existance. The survival rate of…

I think startups die because they are pressured to spend a dollar or more for every dollar that comes in.

Bootstrapped businesses are forced to retain cash for a rainy day. It is anti-fragile vs the fragile nature of a negative/break even cash flow business that depends on a steady stream of investors who introduce other investors who introduce other investors. It's built on ego and not on fundamentals and humans are fallible.

These days you can just get a loan from a bank if you have a high enough MRR to cover the interest rate. No equity, no control traded for a 3rd party who's sole interest is ROI.

I've personally seen bootstrapped businesses that had healthy MRRs rapidly transform into a race to zero or negative cashflow. When I questioned the robustness, I was told by a software engineer angrily I didn't know what I was talking about and that perhaps my economic degree wasn't any use lol. I don't think he's equity is worth anything now but the whole scenario reminded me of the Horse in Animal Farm.

The fake it till you get bought out by a giant is a lottery. Don't trade your life for one.

Re: Finding Profitable Startup Ideas

#40

Post by baxtr »

lubujackson wrote: post #37

I have issue with the "Blue/Red Ocean" concept. Google is supposedly a Blue Ocean idea. Really? Sure, their approach was novel but the search market was already saturated by Alta Vista, Lycos, Yahoo, etc. You could say the same about Facebook with the competition of Friendster and MySpace. In both cases they took a new angle that let them expand well beyond the existing market, but the market did exist and was alread…

I think of it in terms of: do customers already know that they want/need it - alternativly phrased - does is it solve a current customer need/painpoint?

Taking that into account, google is indeed rather a red ocean idea. Whereas, the iPhone was a Blue Ocean product. The original iPhone was a bad phone to make calls with, it didn’t know MMS and no App Store. Many would prefer a Blackberry back then for serious stuff. But, is was magical enough to create a new market through its appeal.

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