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How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

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Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#21

Post by crikli »

So...to me this article illustrates the dramatic differences in objective and mentality between bootstrappers and VCs.

This VC looks at this idea, figures out that in order to own the market and make $fuckton, they'd have to spend > $fuckton. Decides to bail.

As a bootstrapper of businesses, I look at this case study and go "well yeah of course it'll take $fuckton because you're haven't focused on a narrow enough niche". Which of course they haven't because you can only make $shittons from niches, not $fucktons (where $fuckton is up to an order of magnitude larger than $shitton).

It's a very different set of expectations. $idea might not be investable as a VC, but if you can really define a specific niche, get a toehold, and patiently build from there, $idea might have merit for a bootstrapper.

(All that said I don't think this particular idea has legs based on the reasons identified in the "Regarding competition" section and also from my own limited experience in the music space).

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#22

Post by myth_drannon »

arnaudsm wrote: post #9

It's crazy how markets saturate quickly online. You really need a large marketing budget and/or network effect to triumph nowadays, product quality is not differentiating enough. I am scared for the future, this will inevitably lead in harder-to-break monopolies. I worked for an entire year on a next-gen comparison engine (picked.cc if you want to check it out), and even with exciting user feedback and crazy conversi…

You need initial capital or connections. Right now in Canada the well connected are flushed with free money from the government. Just say you are doing AI or add AI to the company name (nope, elasticsearch document scoring recommendation is not AI!) and you get millions from the government to push your way into the market.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#23

Post by anstosa »

crikli wrote: post #21

So...to me this article illustrates the dramatic differences in objective and mentality between bootstrappers and VCs. This VC looks at this idea, figures out that in order to own the market and make $fuckton, they'd have to spend > $fuckton. Decides to bail. As a bootstrapper of businesses, I look at this case study and go "well yeah of course it'll take $fuckton because you're haven't focused on a narrow enough nic…

Ansel from PSL here.

Absolutely. Because we're venture-backed and are spinning out venture-backed companies, we are limited to billion dollar ideas. It's not uncommon for us to kill great ideas that could "only" make tens of millions of dollars.

We're hoping through blog posts like this and other means to be able to share more of them because we want those companies to exist, we're just not set up to create them!

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#25

Post by kbuchanan »

This may strike some as silly, but before the iPhone was invented, there were ZERO searches for the term "iPhone". (I assume, ha!) By all means, do market analysis, but remember that demand is not static—it can be shaped by what you offer. I co-founded a firm 13 years ago that now employees 50 people that most certainly would have been killed by this type of analysis.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#26

Post by eschulz »

This startup also faces a fatal problem when users find a great music teacher, and then they just cut out the startup for future dealings with the teacher. They lose both the parents and the best teachers. Similar to those startups that pair you with a maid.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#27

Post by dragonwriter »

kbuchanan wrote: post #25

This may strike some as silly, but before the iPhone was invented, there were ZERO searches for the term "iPhone". (I assume, ha!) By all means, do market analysis, but remember that demand is not static—it can be shaped by what you offer. I co-founded a firm 13 years ago that now employees 50 people that most certainly would have been killed by this type of analysis.

> before the iPhone was invented, there were ZERO searches for the term "iPhone".

Before the Apple iPhone was invented, there were probably some searches for “iPhone” because infogear had a product with that name in 1998, and Cisco (who has purchased infogear) started using it for Linksys products not long before the Apple iPhone launch.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#28

Post by DevX101 »

crikli wrote: post #21

So...to me this article illustrates the dramatic differences in objective and mentality between bootstrappers and VCs. This VC looks at this idea, figures out that in order to own the market and make $fuckton, they'd have to spend > $fuckton. Decides to bail. As a bootstrapper of businesses, I look at this case study and go "well yeah of course it'll take $fuckton because you're haven't focused on a narrow enough nic…

You're also ignoring the probability of success. This project is only worth $shitton ($30 million) if the project were perfectly executed and other market participants didn't dynamically react to this new entrant. This isn't the likely outcome.

The expected value of this project is probably only $5-10 million once you factor probability of success into account and thus not worth the time and effort at trying in the first place. A $5-10 million E.V. project is very much worthwhile for two founders who wanted to bootstrap though!

One reason VCs target billion dollar ideas is that you'll probably fail. But in the unlikely scenario that you succeed, it more than makes up for the 10-20 other projects in their portfolio that DID fail.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#29

Post by smallgovt »

lowdose wrote: post #3

So these guys have to read up on some articles about multisided marketplaces which what they were testing. Starting a matching platform between consumers and teachers is not a feasible plan because this is a longer term relationship and a platform is easily cut out. A platform like uber works because nobody has a regular cab driver. Supply and demand matching is also terrible for dog walking platforms. Don't spend ti…

Can you clarify what you mean by "supply and demand matching is terrible" for dog walking platforms?

It seems like if the primary qualifier on marketplace success is the ease at which two parties can cut out the platform, dog walking would not pass.

Re: How to Kill a Startup Idea with Google Keyword Planner and AdWords: A Case Study

#30

Post by tixocloud »

myth_drannon wrote: post #22
arnaudsm wrote: post #9

It's crazy how markets saturate quickly online. You really need a large marketing budget and/or network effect to triumph nowadays, product quality is not differentiating enough. I am scared for the future, this will inevitably lead in harder-to-break monopolies. I worked for an entire year on a next-gen comparison engine (picked.cc if you want to check it out), and even with exciting user feedback and crazy conversi…

You need initial capital or connections. Right now in Canada the well connected are flushed with free money from the government. Just say you are doing AI or add AI to the company name (nope, elasticsearch document scoring recommendation is not AI!) and you get millions from the government to push your way into the market.

I’d love to see some of that money. I’m Canadian and you’re right, the stuff that gets put out as AI is quite sad. They tried to pitch me as well to get my feedback on their platform.
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