Comment by smt88 | Hacker News Reader

Comment by smt88 | Hacker News Reader

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> Don't ideas take that stuff into account? Ie. isn't the market and the ability to build and sell the product part of the idea?

Ideas take that stuff into account, but "the ability to build and sell the product" are not part of the idea.

For example, I have a friend in the accounting industry. She says that tracking time spent on each client is still a huge pain point. Many firms do it with Excel spreadsheets, and some of them even use email.

I have an idea to solve that problem. I know how to build app, pitch it, and support it.

The obstacle is that I only have that one friend in the accounting industry. I could get her firm to use it, but I don't have any particularly special ability to convince the rest of that antiquated industry to modernize itself.

I learned this same lesson with a restaurant startup years ago. Unless you have very easy access to lots of prospective clients, you should never start a company to target those people.

(I'm talking about B2B above. The situation is a little different for B2C products, which just require tons of capital and a reasonable user-acquisition cost for that type of product.)

There's a reason investors are always talking about "unfair advantage", and that always means people. Being cashflow-positive is a game of pushing down your costs (for acquiring and serving users) and pushing up your per-user revenue.

The two factors that influence those metrics the most are your team and your access to the target market. A great team means that your sales move quicker, your product-development process is shorter, and you need fewer people. Access to your target market means that cash comes in sooner, sales cycles are shorter, and sales are bigger.

So when I say that startups should start with the market, I don't mean someone should say, "X market really needs Y product." I mean someone should say, "I know a bunch of executes in the [X] industry, and I can meet any one of them tomorrow."

> "I know a bunch of executes in the [X] industry, and I can meet any one of them tomorrow."

This is how we operate in our B2B. Talk to forty potential clients and find the problems at least several of them have in common. Then reduce the list of problems to the ones in your domain, that require relatively little customisation per client, etc.

I make it sound very simple; in reality you end up customising for each client, getting bogged down in maintenance, fielding feature requests that the rest of the client base won't require, etc. Running a business, in other words!

I agree with your point - but I don't think that the parameters are significantly different B2B or B2C - just the scale.

Of course, your cost of customer acquisition is likely to be way higher for an individual B2B sale than B2C, but the volumes are lower, and the revenues higher.

In both cases you need capital to understand the channels to the market, hone the proposition, build and refine the product.

In fact, I would contend that it is often cheaper to get to your first significant tranche of customers in a B2C environment - sales cycles tend to be shorter, the financial commit tends to be lower.

Agreed, you probably need a massive slug of Series A/B to grow that global B2C business significantly - but isn't that also true of a B2B proposition if you want to grow it to global scale?

The original poster's question is about idea generation, and seems to imply that crowdsourcing would provide some market validation of that idea, and "build in" a channel to that market, through those that participate in that crowd (i.e. a network generation effect).

I'm not sure that they are right - but it would be an interesting experiment that I've not seen executed in quite that way.

> but "the ability to build and sell the product" are not part of the idea.

I agree. I didn't say what I meant to say.

What I meant to say is that the idea includes an estimate of how likely it is that you'll successfully build and sell the product. An idea where you could reasonably assume a high likelihood of being able to successfully build and sell your product is good (or rather it has a few components of being good). An idea that meets some of the requirements of being good, but that doesn't have a reasonable chance at being able to be built and sold isn't a good idea.

I think that these estimates may have a rather large confidence interval in some cases, and that in these cases the team is extra important. But I also think that there do exist ideas that have a high likelihood of success with a narrow confidence interval, and that in these cases the team is less important (but still important, for the reasons that are well accepted). And so, I think it makes sense to look at it as a case-by-case, rather than saying more broadly that "ideas don't matter".

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