You Dont Need a Good Idea To Start a Great Company
blog.eladgil.com
blog.eladgil.com
GEORGE: We go into YC.
JERRY: "We"? Since when are you a hacker?
GEORGE: (Scoffs) Hacker. We're talking about a startup.
JERRY: You want to go with me to YC?
GEORGE: Yeah. I think we really go something here.
JERRY: What do we got?
GEORGE: An idea.
JERRY: What idea?
GEORGE: An idea for the startup.
JERRY: I still don't know what the idea is.
GEORGE: It's about nothing.
JERRY: Right.
GEORGE: Everybody's doing something, we'll do nothing.
JERRY: So, we go into YC, we tell them we've got an idea for a startup about nothing.
GEORGE: Exactly.
JERRY: They say, "What's your startup about?" I say, "Nothing."
GEORGE: There you go.
(A moment passes)
JERRY: (Nodding) I think you may have something there.
'You don't need a good idea' != 'You don't need an idea'
Neither Google nor Facebook started as a company.
Both search and social networks were written off as markets when the two current leaders entered the space.
I don't want to invoke another semantic wrestling championship between execution and ideas, but you have to give credit to Facebook for realising that social networks are not just about dating. It was their idea of exactly replicating offline social relationships on the web, executed to near perfection that made them successful. Great ideas are a combination of many small seemingly trivial good ideas. They do matter, otherwise one wouldn't know what to execute.
I'm afraid this article does rather poorly on the swombat-o-meter - http://swombat.com/2011/1/20/how-to-write-good-startup-advic...
The point of this post is not "Are good ideas bad for a startup". Obviously good ideas are much better then bad ones, and great ones are much better then good ones.
The point of the post is "don't think you need the most amazing idea ever to start something. it is more important to start something and learn what the great idea is along the way".
Facebook and Google are examples of great ideas executed well creating huge markets, which did not exist when they set out. So how would have their founders fared if they chose to focus on a great market at the start? We would have yet another portal with banner advertising and a dating site.
I agree with the point of the post you mention here, but your post doesn't really support that.
Your advice is to focus on a great market. One of the hottest markets right now seems to be photo sharing. But I highly doubt the next great company will come out of there.
Can you give me an example of a great market today?
"Great market" /= "hot market"
Great market to my mind is a market that has a lot of users who will use your product (and better yet, you can make money off of them using your product). Maybe I will write a post on how to identify a great market, as that is a pretty big topic. But one example is often markets where user behavior is fundamentally shifting, or where there is a sudden change (e.g. adoption of truly smart phones) leading to opportunity.
I think certain areas in ecommerce are a good example today of changes in user behavior and business model leading to high growth companies (Gilt Group was just the beginning, and some really cool companies are getting started today around fashion/women's goods online).
Photo sharing fits the bill just right. Facebook has shown you can also make money off it.
Ecommerce is always a great market, but it's too vague because it's just commerce through a new medium. I'd prefer and love to read blog posts discussing specific ideas. Take that as reader feedback :-P
Did you see this Mixergy interview with the founder of Gemvara? http://mixergy.com/matt-lauzon-gemvara-interview/
It is one of the most innovative ideas I've come across recently, and apparently executed very well too.
To be honest I didn't want to name specific markets as I didn't want to create too much interest in areas where friends of mine are working. I didnt want to add attention and make it more crowded. :)
"It is all about execution. Even if you have a great idea - 5 other people will have it at the same time."
Just quoting a blog post...
Great point. A very good write-up on that is http://jasonlbaptiste.com/featured-articles/build-what-had-p....
Maybe I will write a post on how to identify a great market, as that is a pretty big topic.
For what it's worth, I'd love to see you write that.
Remember when 'on the internet' was the only thing changed in all those patent applications compared to what was going on before then? Suddenly appending 'on the internet' to something made it worth investigating. New fields open up all the time, if you're observing new findings in popular science it's very hard to not see opportunities enough for several lifetimes to scroll by in a single sitting of reading. Whether they're worth pursuing is another thing but the opportunities are there for the taking, no need to have a good idea or any at all to get off the ground.
Another way to start a great company that is pretty effective is to take an idea that already exists and simply do a better job of it.
You need to have an idea that you can believe has a chance of being successful.
disclosure: I burned my boat
made me laugh :) I burned mine too!
An exciting idea doesn't have to be a good idea. A lot of dumb ideas seem like good ideas until you're half way through executing on them.
Whether or not having a good idea is critical to a good startup, that can be debated. But few people can muster up motivation to take risks on ideas that don't excite them...
The best products aren't slapped together using existing solutions. They are built from the ground up to solve a problem. If your company is building a solution to solve a specific problem, you are a great company.
IMO you shouldn't build a company from a bad idea, but you can in your spare time try to validate an idea you're uncertain about. But don't quit your job at Google.
"Of the 26 companies that I consider realized or effectively realized in my personal track record, 17 of them made complete transformations or partial transformations of their businesses between the time we invested and the time we sold. That means there a 2/3 chance you’ll have to significantly reinvent your business between the time you take a venture capital investment and when you exit your business."
Source: http://unionsquareventures.com/2007/11/why-early-stage.php
"Here’s an interesting breakdown of the “transformers” versus the “stick to our plan” investments in my personal track record.
Greater than 5x – 11 total investments – 7 transformed, 4 did not
1x to 5x – 10 total investments – 6 transformed, 4 did not
Failures – 5 total investments, 1 transformed, 4 did not
Unrealized Union Square investments – 6 total, 3 transformed, 3 have not"
For example if someone starts a dating site but later transforms into a general social network, I would call that a complete transformation.
However if you start out making a ruby IDE but later realizes that real money is in MMORPGs or whatever, well you might have as well as waited.
Consider: The variant of (Poor People) + (Profitable Idea) = (50/50 Success) and the variant of (Great People) + (Unprofitable Idea) = (Failure). If (Great People) it is far easier to get (Profitable Idea) then to change (Poor People) to (Great People).
To use your example, if you're making a Ruby IDE and no one pays you, you will never be profitable. If you make a Greate Ruby IDE and no one pays you, you will never be profitable. Discovering that MMORPG's are more profitable one day, you build one, and people pay you, you might be profitable. You could consider the time you spent on your Ruby IDE a waste, or you could consider that you've learned something about software development as a business. It is far easier to change the idea then the people.
I also submit that it'll be easier to quit Google when you've discovered your home run idea than to change your entire business.
You could not be more wrong on this point. Being at google is a recipe for complacency. Quitting your job is incentive to actually figure out how to build something good. Because it's do that or fail.
The successful ones that are a result of an initial good idea are a strict subset of the ones that choose a promising market.