Lecture 3: How to Start a Startup

I really can see that from his experience in Silicon Valley PG gave a view of what he has actually seen in how startup ideas are or have been found. I have to respect most of what he said.

Still, from some of what he said, I have a tough time taking him literally: E.g., as I recall from the lecture, he indicated that early on Google was just a little thing, just a small interest, or some such.

However, also, as is well-known, even in the early days of Google even as just an idea, Internet search was already widely regarded as an important need and problem. Without checking dates, there was, what, Lycos and Yahoo!, maybe more?

Without means of search, the Internet was like being in the world's biggest library with all the books, etc. just in a big pile. For libraries, the solution has long been the library card catalog, especially the subject index. So I have to suspect that, even in the beginnings of the idea for Google, the founders did understand that what they were working on was possibly important as a business.

Next, the lecture did mention that Ron Conway wrote Google an early check: I have to believe that Conway took the future of Google fully seriously.

From all I know, Facebook, Microsoft, Cisco, Intel, etc. all knew early on, at the beginning of the idea or not long after, that they were trying to make a successful business.

But the lecture seemed to be suggesting that at the start an idea is hardly more than a toy or curiosity.

Next there was,

> The way to get startup ideas is not to think about having good startups ideas: you’ll get bad and plausible ideas that will end up wasting your time.

> To have a good idea, take a step back and don’t even try.

While I can believe that PG has plenty of examples where startups followed this advice and were successful, still I'm shocked and have a tough time swallowing that this advice is the only way to be successful or that, in particular, always any effort to find a good idea

> will end up wasting your time.

Instead, I'd like to build on PG's

> What you really need to learn are your users’ needs.

Now I'm on board!

But then I want to go farther: Okay, not everyone has to go along with my next thinking, and here is some of why: First, there's not just one way to "skin a cat" or be successful. Second, and something I regard as very important for successful startups, as we know too well, a really successful startup is rare, so rare that we have to suspect that, not all, but some of the most successful startups will be taking approaches that are new and with few or no examples from the past, say, 30 years in Silicon Valley venture funded startups.

Moreover, if a startup looks close to what has been tried, and even worked, before, then we have to be suspicions and question if that "what" should be tried again instead of something new.

But, broad strokes, aside, let's try to be more definite:

Step (1) Need.

Assume we've seen some users' need. Suppose we use some judgment here and accept only a genuine need. Such a need might be, say, a safe, effective, cheap one pill taken once to cure any cancer. Yup, that's definitely a need -- no question. We want a need so serious that we can be quite sure, e.g., the pill, that the first good or a much better solution will be a must have and not just a nice to have. So, we pick a need.

Now I narrow the scope: We want to exploit Moore's law and the Internet and do have a need that, at least for its solution, is in information technology. One reason: Can send to the users just bits, and those sent just over the Internet.

Step (2) Solution.

With the need, we try to find the first good or a much better solution. If we fail, as we likely would for years on a cure for cancer, or, in information technology, a project were we needed an algorithm that shows that P = NP, we return to Step (1) and find another genuine need.

Step (3) How to

So, how can we find a solution?

Well, here's my suggestion: Right, even with PG's broad experience, the suggestion may so far never have been seen even by PG in Silicon Valley. So, in this sense we're talking something new, and we keep in mind that we should not be reluctant to pursue something new since being new and different is from maybe good up to crucial for the rare, big successes in the future.

But for something new, we very much want some evidence of, say, efficacy, or will that dog hunt?

So, we have a problem, and we want a solution, in information technology, and a solution we have high confidence in, even before we start writing software. So, where can we find examples of doing that? Sure: The US DoD. They've been doing that with, comparatively, a great batting average for 70+ years, that is, finding solutions that well informed people can have high confidence in before starting implementation.

So, we have

Lesson 1: By example, it's actually possible, and in the US DoD quite common, nearly standard, to find solutions that well informed people can have high confidence in before starting implementation.

Now, this lesson, and the fairly obvious DoD examples, e.g., the SR-71, were often quite expensive to implement. But, there is also

Lesson 2: The implementation work commonly was routine, that is, low risk, maybe expensive but, still, low risk.

More of my suggestion: It can be good, when we can, to convert the work of finding the solution to a mathematical problem where, if the math is correct, then we are quite sure the solution is correct and, quite likely, effective as a solution for the need.

Advantages here include: (A) The math has a good chance of being done just on paper by just one person, with very low "burn rate". (B) The math is comparatively easy to check for correctness. (C) Since we have assumed that our startup is in information technology, a solution based on math has a big natural advantage; e.g., maybe the implementation is just software with no metal bending, team of thousands, big buildings, etc.

So (1)-(3) is my suggestion for insight into how to find a good idea for a startup.

So, where is this suggestion for finding a startup idea unclear, wrong?

    entrepreneur
    noun, plural entrepreneurs

    1. a person who organizes and manages any enterprise, especially a business, 
    usually with considerable initiative and risk.