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How to pick startup ideas

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Re: How to pick startup ideas

#21

Post by nostrademons »

davemel37 wrote: post #16
nostrademons wrote: post #13

Earlier quoted context omitted.

That's true, but you also need a story about how you're going to grow your reach & influence faster than your competitor does. It can work, for example, if your main competitor is a hobbyist who doesn't take his product seriously. Ditto a major corporation for whom this is a sideshow that can't get resources from execs whose attention is focused elsewhere. But anybody can spend more money to tell more people about th…

In my experience, PR and third party validation will build a brand, not advertising. I do agree that the person who wins the perception of being first in peoples minds will win the branding battle...but I do not agree that the second place competitors won't build strong, viable companies. In fact, there are many examples of big brands being overtaken by smart positioning. Avis claimed, "we are number two so we try ha…

In my experience, rental cars are commodities. I search on their websites for the lowest price and go with that. On my last 4 trips I have used all four of Avis, Hertz, National, and Enterprise.

If they're trying to build a brand, they suck at it.

(I guess that what they have managed to do is distinguish themselves from no-name budget operators...I wouldn't really consider going with a rental car I haven't heard of, even if it's mentioned in the press. But then, that's validating the original article's point, first-mover advantage is immensely important, and no amount of spending is changing that.)

Re: How to pick startup ideas

#22

Post by frandroid »

vinceguidry wrote: post #12
inthewoods wrote: post #2

Interesting article - a lot of good stuff in it but I found it a bit to general to be really useful. As an example, the author states: "So you need to get to market with a viable product before anyone else does." That's the type of statement that I question - there are plenty of examples of companies creating products in saturated markets where they were not the first mover. In fact, sometime being a first mover can…

I found the article great in forcing me to reconsider my goals in that space. I'd always had this belief that it was possible, eventually, to find the right idea and break through and become the next Microsoft / Google / Apple. The more I actually understand about the broader economic environment, and the more I read about the people in question who started these companies, the more it just looks like right-place-rig…

> the more it just looks like right-place-right-time luck

That's confirmation bias. There are tons more people than you know of in the right-place-right-time, but couldn't/wouldn't act on it. You still have to build the start up and be persistent at it, have the right vision, do the right adjustments when competition comes around. These are also features shared by the Microsoft / Google / Apples out there.

Re: How to pick startup ideas

#23

Post by frandroid »

coffeemug wrote: post #15
nostrademons wrote: post #13

Earlier quoted context omitted.

That's true, but you also need a story about how you're going to grow your reach & influence faster than your competitor does. It can work, for example, if your main competitor is a hobbyist who doesn't take his product seriously. Ditto a major corporation for whom this is a sideshow that can't get resources from execs whose attention is focused elsewhere. But anybody can spend more money to tell more people about th…

> This assumes that the entire market knows about a solution the moment a first mover comes to market. It doesn't. The first mover will start getting customers before you do, and as they do their ability to reach customers will grow exponentially. You might start reaching a segment of the market they aren't reaching, but they'll trivially be able to lock you out.

Like Altavista locked Google out.

Re: How to pick startup ideas

#24

Post by nostrademons »

frandroid wrote: post #23
coffeemug wrote: post #15

Earlier quoted context omitted.

> This assumes that the entire market knows about a solution the moment a first mover comes to market. It doesn't. The first mover will start getting customers before you do, and as they do their ability to reach customers will grow exponentially. You might start reaching a segment of the market they aren't reaching, but they'll trivially be able to lock you out.

Like Altavista locked Google out.

Altavista falls under the "parent company believes it's an inconvenient sideshow, a technology demo for the company's main products" clause. The point of Altavista was to demonstrate the power of DEC's Alpha chips. That made it politically unfeasible to adopt one of Google's key innovations, using large quantities of commodity hardware to power innovative new algorithms.

Re: How to pick startup ideas

#25

Post by tjradcliffe »

frandroid wrote: post #22
vinceguidry wrote: post #12

Earlier quoted context omitted.

I found the article great in forcing me to reconsider my goals in that space. I'd always had this belief that it was possible, eventually, to find the right idea and break through and become the next Microsoft / Google / Apple. The more I actually understand about the broader economic environment, and the more I read about the people in question who started these companies, the more it just looks like right-place-rig…

> the more it just looks like right-place-right-time luck That's confirmation bias. There are tons more people than you know of in the right-place-right-time, but couldn't/wouldn't act on it. You still have to build the start up and be persistent at it, have the right vision, do the right adjustments when competition comes around. These are also features shared by the Microsoft / Google / Apples out there.

It's not an either/or: almost every successful company requires both hard work and luck. In very rare cases one or the other might be sufficient, but in the vast majority of cases both are necessary. The amount of luck required can be reduced by hard work, but it can't be taken to zero.

In the usual case, picking a product that turns out to have high demand is the biggest area where luck matters.

There are two kinds of high-demand products: the things that everyone wants but no one knows how to do, and things that no one knows they want but everyone knows how to do.

Fractal image compression is a good example of the former.

Almost everything else is a good example of the latter: smart phones, Facebook, Twitter.

There are some things that are both: the Model T ("If I'd asked my customers what I wanted they would have said a faster horse") and so on.

If you choose one of the former, the odds are you'll fail because if no one else can do it, you probably won't either.

If you choose one of the latter, the odds are you'll fail because if no one knows they want it, it's probably a stupid idea--which is often a smart idea whose time has not yet come.

This is not to say you shouldn't go for it! "The odds are you'll fail" is a simple statement of fact with regard to starting a business, but only for certain values of "fail". You'll learn a huge amount, grow in ways you never knew were possible, and have the adventure of a lifetime. Just be really, really careful about not getting wedged financially, and especially make sure you don't let friends or family members over-invest.

Re: How to pick startup ideas

#26

Post by eldavido »

inthewoods wrote: post #2

Interesting article - a lot of good stuff in it but I found it a bit to general to be really useful. As an example, the author states: "So you need to get to market with a viable product before anyone else does." That's the type of statement that I question - there are plenty of examples of companies creating products in saturated markets where they were not the first mover. In fact, sometime being a first mover can…

Differentiation is much broader than just the product. It could be in targeting a particular geographic niche, offering different financing, more convenient packaging, etc.

In marketing, they have a concept of the "four Ps" - product price place (distribution) promotion; all of these can be fertile ground to set yourself apart from the competition.

Re: How to pick startup ideas

#27

Post by sparaker »

inthewoods wrote: post #2

Interesting article - a lot of good stuff in it but I found it a bit to general to be really useful. As an example, the author states: "So you need to get to market with a viable product before anyone else does." That's the type of statement that I question - there are plenty of examples of companies creating products in saturated markets where they were not the first mover. In fact, sometime being a first mover can…

A nice read. I am going to adopt alot of practices from this article. And yes i think alot of times you just get lucky in a few things that can make or break your product. Good affiliations early on can give your product good PR.

Re: How to pick startup ideas

#28

Post by wooyi »

This articles makes sense, but it's hard to step back and be so reflective without being victim of analysis paralysis. Many times, you build a toy, something you like, and it turns out big. If you over analyze it, you may not build it because you can't predict the future no matter how well you think you can.

In many cases, analyzing your startup idea with such a complex framework will stop you at your tracks.

I prefer to follow the basic rules PG laid out (there are some overlaps) in his article on startup ideas.

Re: How to pick startup ideas

#29

Post by marcus_holmes »

nah, I had to stop reading when it said that First Mover Advantage was the key to success.

That's been so thoroughly debunked (try and think of a single successful startup that was First Mover with its business model). The First Mover spends all its time educating the market, the businesses who follow soon after can take advantage of that.

Really nice writing though :)

Re: How to pick startup ideas

#30

Post by marcus_holmes »

nah, I had to stop reading when it said that First Mover Advantage was the key to success.

That's been so thoroughly debunked (try and think of a single successful startup that was First Mover with its business model). The First Mover spends all its time educating the market, the businesses who follow soon after can take advantage of that.

Really nice writing though :)

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