Ask HN: We have a great team and capital but can't find a good idea
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-Things that we have:-
1) A great early team, made up of myself (just a normal bizdev guy) + 1 talented former private equity partner (who made a fortune on Wall Street) + 1 talented CMU CompSci PhD. The three of us have been friends for years and work together really well.
2) Investors that are willing to write blank checks (within reason) because of the trust in the team (mainly former colleagues of the PE guy).
3) Cash in the bank to continue experimenting
4) An interest in SaaS and ML (and some experience in the latter)
-Things that we don't have:-
1) Ideas of what to do
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We have read EVERYTHING on how to come up with startups ideas (ranging from Paul Graham essays to The Mom Test). We have ran interviews with friends in corporate and startups, asked old colleagues, attented conferences, organised meetups in our city, a ton of time spent networking, etc.
The few product ideas we came up with following the above process we dropped, often because we discovered that that space is ultra crowded or commooditized.
We will not give up but are getting unsure on how to break the stalemate.
Any tips or advice?
Thanks!
579 comments
[ 4.0 ms ] story [ 175 ms ] threadConsider that there were many search engines before Google and many social networks before Facebook and so on.
All spaces are crowded but there is still lots of room for improvement. Even a simple todo app doesn't do quite all the things everyone needs. You can imagine super versions of a todo that automatically uses your calendar to allocate time to the tasks. Then when people want to meet with you, it show you options that are spaced so you have time for your tasks and then analyzes the tasks you do and don't get done, and notices what the differences and then allocates the right time for the right task (morning for creative, night for braindead, lunch for meetings) or whatever.
The problems are the same problems. Just look at the current solutions and you can see they are lacking. Then the question is, can you find a good way to solve them. (You code up the above solution and simply doesn't work, for example. )
contact me at HN AT opendomain dot org
Explore spaces where change is rapidly occurring, and build things with those technologies/platforms/markets. You'll encounter problems along the way, be they legal, technical, distribution, etc. Some of those problems will be experienced by others and so you may stumble across a viable market. But you'll only know that by walking down those paths, rather than gazing from afar.
You could build an Ecommerce and sell stuff. Spend a few grands on some products and see which one converts the best. Or create the landing of some of your ideas and see if people will leave their info by buying some advertising on Facebook/Google.
A crowded market doesn’t necessarily mean that you have no chance. The key here is positioning your product to make it look different. If you have cash to spend you can actually test a lot of “boring” ideas by differentiating them (e.g. another to-do app that does X or is made for Y).
Even better, which problems do you face daily?
I used to think they'd stop coming but always new ideas come and I write them down in a list now. Too many to execute.
Some good, some probably not so great.
The accepted wisdom is that ideas are worth nothing but I strongly disagree. I think most ideas are worth nothing, but some ideas are incredibly valuable so I don't give my ideas away in case I want to make use of them one day.
My most important suggestion is the simplest: Come up with more ideas. Take a look through this guy's posts: https://medium.com/@x0054. Specifically, he set a goal to come up with 10 random ideas a day for a month. They are all over the place in terms of quality and practicality. Some of them are silly; some are outstanding. If you do this for a month (as do each of your partners, individually), you will have close to 1,000 ideas to comb through. Something will rise to the top.
Creativity is a habit. Creativity is a skill.
As for myself, I have several ideas that have risen to the top (out of hundreds) that are definitely money-makers, but I don't (yet) have the resources to pursue by myself. The hardest part for me is to find others who are motivated enough to bootstrap a business! It sounds like you have a good group, though, and for that I congratulate you and wish you luck!
It happens when you do some work and suddenly need some tool that could "do this or that" but all you find is complicated solutions or no solution at all
1) Write software that uses machine learning to search for tornados in doppler radar signal returns 2) Write software that manages inpatient health care, orders, prescriptions, labs, etc 3) Write software that uses machine learning to route network packets faster 4) Use machine learning to control an engine's ECU to maximize fuel economy or power via valve timing, spark degrees/timing, fuel/air mixture, injection timing, compression ratio, etc
1. Passion - what area excites the team the most? Health, AI, FinTech, Hardware? You are going to spend a few years building a brand, company, and product. The more connection you have to it the better.
2. Network! Be inclusive. You are basically saying you can build at scale quickly. Ideas come easily from interaction. Plan the next 30 days to scour every event you can and go. Listen, don't build. See what pops for the team. Iterate from there until something bubbles up.
Can you determine which articles in a corpus of news, or other documents, agree/disagree with one another? Can you cluster and sub-cluster along statements of fact being made? Can you then trace a statement of fact back to it's "original source" based on when that entry was acquired?
There's a lot of opportunity in that space...
But if you could interject at this moment of initial assimilation and provide some legitimacy or point out the lack thereof, you could provide a very useful service.
It would also help people change their minds, although as you mentioned, that is harder to do. But at least now you have better tools to do it.
Finally, not EVERYONE is completely disinterested in having their misconceptions corrected.
"The eye sees only what the mind is prepared to comprehend." - Henri Bergson
If you're doing a software startup, your team should be 3 engineers, not 2 business guys and 1 engineer.
Frankly I'm not sure you can succeed if you're just a mercenary (not trying to insult you).
To me it seems you're approaching the problem the wrong way : it shouldn't be about doing like everybody else or trying to be successful just because you think it will make you feel good but it should be about releasing this f* idea that is nagging you since years and that nobody can do better than you.
I have one of those ideas since 2007. One day ... ;-)
But right now I'm working on a back-end code generation tool : the user would just draw a data schema and once done get a database (as a script or as a container or directly in his cloud of choice) and scaffolding for the API.
The data schema is based on a specific method that makes it simple to think about your data without having to grok foreign keys.
I'm not sure I can pull it off but I want to see how far I can go.
GoDaddy founder Bob Parsons once said something like (paraphrased slightly) "never be scared to enter a crowded market. Just be better than everybody else". Something to think about.
Beyond that, consider that your product is not the only dimension on which you compete. That is, there are other ways to compete besides having the best product. As we all know, the best product doesn't always win.
I'd recommend reading The Discipline of Market Leaders by Fred Wiersema and Michael Treacy, as well as Mastering The Complex Sale, The Prime Solution and Exceptional Selling, all by Jeff Thull. These books deal a lot with how to compete and sell and differentiate yourself... even when selling a seemingly low-value commodity like sand. Another valuable book is Differentiate or Die by Jack Trout and Steve Rivkin.
Lastly, if the main battle for a certain segment is over for more than a decade, the incumbents seem to get lazy if they continue dominating the market for too long. Look at eBay for example, or Linked.In - they have stopped innovating and basically get worse with every "Facelift", but there's still considerable demand with a lack of alternatives. It's a long shot, but possible with great execution.
There is not an SME on their team in any area where they see a problem to fix - they 'only' have money.
they need to augment their team with an SME in an area they are willing to fund
Then here is their next problem:
Who is willing to get behind this team given the statements - There is only one reality - a confident founder who can provide them the vision to build something - and they provide the funding and maybe the CFO... but they may overly think of themselves as "technical" and meddle in the running of such an enterprise - which means doom.
These guys should simply take their funds and invest - not found shit. they will fail and bring down too many people (their employees) if they try...
There’s a well-known adage that “Having no competition may mean you have no market.” The corollary I’d add is that “Having competition doesn’t mean the market is full.”
Seen here: https://www.backblaze.com/blog/how-backblaze-got-started/
When you stumble across an idea that's actually viable, it feels like "Oh, why has nobody else done this yet? I better get it out there before the competition eats my lunch." It's very likely that you're actually overestimating the threat of competition, but that's because you have domain knowledge that makes the key differentiators of your product obvious to you but inconceivable to other entrepreneurs.
From your perspective, the idea was obvious and different, and that's why people use your product. From an outside perspective, you entered a crowded market and won it by being better than everybody else. The difference is in the level of detail with which you know the market. If from your perspective it appears to be a crowded market and you just need to be better than everybody else, you probably aren't going to be able to build that better product.
I’m sure there’s something in their diverse backgrounds that intersect in a way that solves a critical problem. For me, the thing that’s missing in their process is actually building a prototype and getting in front of a user to validate what they think they know.
That's a fair point. The key, I think, is understanding when a market is susceptible to entry by another player. But part of making that judgment is understanding the different dimensions along which you can compete, which is why I find The Discipline of Market Leaders so valuable. That was the first book I read that really made the case that it isn't necessarily just about your product. Likewise Crossing The Chasm makes a pretty good case that you can always (well, almost always) segment a market to a degree that there's a place where you can compete.
I entered a huge market as a solo founder with no industry experience and now get about 1% of the traffic that the big players with thousands of employees get, and I make a very decent income from it.
I think that trumps Parsons. That said, looking at ideas that "didn't work" can be a solid approach. That is, sometimes (for example) the idea was solid but the team failed. The market also changes and some ideas can be ahead of their time (and poorly executed).
I have a tremendous degree of regard for mcuban, and I think his advice has merit. But I wouldn't say either "trumps" the other. These pithy sayings are handy, but there's a lot of nuance to both of them (IMO) and the devil is in the details.
Should Google have decided not to pursue search because of Altavista, Dogpile, Magellan, Northern Light, Yahoo, and DMOZ? Should Facebook have eschewed social networking because of Friendster, Myspace, Livejournal, etc?
Sometime just being better than the other guys really is enough.
But I would counter with...Google wasn't a search company, but an advertising platform. And that's where is looked where others were not.
[0] https://www.cnet.com/news/overture-sues-google-over-search-p...
In terms of sales, GoDaddy is six times the size of the Dallas Mavericks business, and ~20 times the size Broadcast.com was before the dotcom bust.
But my sense is Cuban could do it again. Parsons benefitted from timing and is likely more of a one trick pony.
Yes, a great and lucrative trick. But still one trick :)
Check out PXG.com
"In 1984, he founded Parsons Technology in Cedar Rapids, Iowa, and began selling MoneyCounts, a home accounting program. In late 1987, Parsons was able to quit his job and focus completely on selling and overseeing growth of MoneyCounts. Eventually, Parsons Technology grew to be a 1,000-employee, privately held company. On September 27, 1994, Parsons completed the sale of Parsons Technology to Intuit, Inc. for $64 million."
You could sign people up for grocery/sundry subscriptions, just like Amazon, etc, and fulfill through those retailers.
Just starting with weekly groceries that omit single use plastics, by choosing glass peanut better jars and cardboard detergent boxes.
Ask them what problems they need fixed in their life or what things they thing are crap and could be improved.
I was going to say it might be worth looking for projects that have been validated by sales and then looking to grow them both with the team and capital.
Having something like a space with a couple ideas/ startups in it that have already been validated would lower your risk and expose you to more opportunities while growing the business. I assume.
That said, PE has plenty of opportunities within tech though. Which is essentially what you described.
What you need is something where you provide a specific solution to a real problem, something people are really willing to pay for.
Network, speak to people, ask them about their problems. What do they wish existed. And if it existed, would they pay for a solution (is it a real business).
I've got some ideas for things from recent life experiences that seem to be common. This is where the best ideas come from. When there is a real need, and those addressing it aren't doing it well, or at all. Look for that gap.
Never hesitate to connect with others either. A good conversation can spur thoughts, and this is where ideas germinate.
Remember, the idea doesn't have to be a killer. Lowering friction in a process to make it faster/easier/cheaper/better goes a long way to turning into something good (think Uber/Lyft/AirBNB), even if the business is old and commoditized.