You Don't Need a Good Idea to Start a Great Company | Hacker News Reader

You Don't Need a Good Idea to Start a Great Company

blog.eladgil.com

49 pointsrememberlenny14 comments

The problem with many first time entrepreneurs is that they fall in love with a solution. That's backwards. Fall in love with a problem, innovate a solution.

I’ve always said if the “what” is compelling enough the customer won’t care about the “how”… like you said too many people fall in love with the “how”

There are big obvious counter examples. Bezos thought the internet was a solution to a lot of things. He was right. He wasn't in love with selling books. None of the Paypal guys were in love with the problem of sending money. Kalanick wasn't in love with the problem of moving people about.

There is a reason a lot of tech companies are started by engineers. They like building things!

I can appreciate some of the sentiment here, but, how do you start the startup without an idea.. you have nothing to actually sell to your customers. No idea of what to do for them for money.

Just take an existing idea and build a similar product or service competing with the existing providers of that same idea?

problems. they are everywhere, you just gotta find one where people will pay you to fix it. the idea is connected to the problem you want to solve, think of the people you know and love. is there anything you can do to help them? well, that’s an idea. then you test it, you see if your idea solves their suffering or allows them to get back something they lost or feel like they are losing, it’s a very powerful motivator and can be rewarding on many levels outside of monetary

edit: keep a journal and start jotting down anything that comes to mind. you’ll have to test them somehow, write down some metrics that way you know if you are moving towards your end goal

Follow the problem and then follow the money.

You don’t have to have the perfect or right solution to start talking to people.

Decide what area you think companies might need help In a very general sense. — I’m going to improve HR software and then go from there.

It’s a lot easier to find a probable that you lived. Ever found a broken process at work? Ever had to automate some kind of process? Start there and talk to people.

Talk to enough people you will notice threads of commonality. That’s where to focus. From there you need to find out where there is budget.

People have this fantasy that you’re sitting in the back yard and you go… wait a minute that’s it!! And that probably happens but it’s usually a long fact finding mission before you figure it all out.

>You Don't Need a Good Idea to Start a Great Company

Nope, but it can require a truly great company to get the most out of a good idea.

Seems to me the most likely Googler to succeed if they retired to start their own company would be one who had an endless (and constantly growing) number of ideas to choose from, not someone who hasn't come up with an overwhelmingly motivational idea or two after just a few days or hours.

But do you need a great idea to get funding?

Maybe just great numbers?

You don't need funding to start a software company, and for some companies it can be a kiss of death. How many products have been brought to market but rather than grow slowly and organically, they took far more cash than it necessary, and now rather than live with their good product, they have to turn it into yet another dark-pattern cancer of the internet to give their investors the return they expected?

Not everything needs to be some kind of social media for the world, just write a program that solves a niche problem that people will pay for. Bootstrap it with funds from contracting/consulting. You'll know when it's time to drop the side business and go all-in on the product.

THEN once you have a fully validated market, cashflow, all that good stuff, if you want to grow fast you can go seek funding from a much stronger position.

I complain about positive interest but having fixed return expectations on an overfunded startup sounds just as bad to me. How many profitable companies have died simply because they didn't match the profit expectations of the bank or VC?

The startup becomes desperate to grow even if growth isn't what the startup needs. It's just another case of "when the money runs out, people stop working" but in this case it is not customers' money (whose money is flooding the bank accounts of the startup), it's the investors' returns that are running out as he pumps an increasing quantity of money into the company. Just like the bank has certain expectations of how big a company should be so has the VC. One of the bigger problems in developed economies is that small businesses do not get the funding they need. VCs want big chunky companies and they want growth potential at every stage.

Has anyone created a mini incubator that simply buys all the failed startups that the big VCs didn't want?

The small software startup funding problem seems like a very hard nut to crack. First I think its best to stop thinking of yourself as a "startup" and start thinking of yourself as closer to a normal business. PG's Startup = Growth article really explains this, and all the VC madness and overfunding comes from this expectation.

So you've moved the problem from getting VC funding to getting a bank loan like a normal business. But now the problem is that your small software business is still a higher risk proposition than a donut shop, because we've clearly validated that there's a market for donut shops, but your software company still needs to validate that it even has a business.

Now your software company sits in this murkey middle where your lack of potential is too risky for a VC, but your lack of market validation makes you too risky for a traditional bank loan.

Why then start a small software business? Because its the lowest risk proposition for the founder. Get 2 founders together and bootstrap a 2M ARR, with the appropriate development a business experience and a decent understanding of your market, there's a very high chance you can pull this off. Now you're looking at a $750,000 annual income and half an asset that is worth at least 10M at a 5x multiple.

Point being, given that the whole point of a small software company is to minimize founder risk in order to give the founders the best chance at a very substantial income, it shouldn't be surprising that the most realistic way to fund such a company is bootstrapping. I doubt there's a better answer to the problem since the whole reason you're in this situation is that you the founder wanted to keep all the gains while removing all the long-term risks to yourself. To make that happen you the founder are the one who has to front the cash.

Personally (haven't started a company) there is basically only one thing you need before starting: your first customer, then not screwing up, but that I believe is easier.

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