How to Get and Evaluate Startup Ideas | Startup School

YC Group Partner Jared Friedman shares a framework for how to get and evaluate startup ideas. He shares many examples of YC companies and the inside stories of how they came up with the ideas that turned into billion dollar companies. Even if you have an existing idea, this talk helps founders confirm that their idea is good and/or provide framework for a future pivot.
Apply to Y Combinator: yc.link/SUS-apply
Work at a startup: yc.link/SUS-jobs
Chapters (Powered by bit.ly/chapterme-yc) -
00:00 - Finding a promising idea
00:51 - Where does this advice come from?
01:44 - 4 most common mistakes
06:29 - 10 key questions to ask about any startup idea
14:40 - 3 things that make your startup idea good
19:42 - How to come up with startup ideas
21:25 - 7 recipes for generating startups ideas
#startup #tech #entrepreneur

[@startupengineer]

How to Get and Evaluate Startup Ideas - Do you have founder market fit? - How big is the market? - Big now or small but rapidly growing - How acute is this problem? - It’s not a problem or it’s not a problem that people care about. - If the alternative to your solution is literally nothing then that’s great. - Do you have competition? - Most good startup ideas have good competition. - If going against entrenched competition, you generally need a new insight. - Do you or someone you know want this? - Did this only recently become possible or necessary? - New tech, regulatory change, new problem - That’s often what creates a new opportunity - Are there proxies for your business? - A large company that does something similar to your startup, but it’s not a direct competitor. - Is this is something you’d want to work on for years? - Often an idea grows on founders as it begins to work. - Is this a scalable business? - Software - yes - Services or anything with high skill human labor needed needs to be thought about deeply - Is this a good idea space? - One level of abstraction out from a particular startup idea. It’s a class of closely related startup ideas. - Infra monitoring tools, food delivery services etc. - Diff idea spaces have wildly different hit rates. In the last 10 years, fintech infra, vertical SaaS for enterprise had astonishingly high chances of becoming billion dollar companies. Consumer hardware and social networks were orders of magnitude lower. This changes over time. - Fivetran worked through an idea space multiple times before getting to the thing they actually succeeded Ideas that are hard to get started - Stripe. Thousands of developers knew this was a problem. Getting started was super difficult. Ideas that are boring - Gusto. Payroll software was left alone for a long time. Ideas that have existing competitors - Most good startup ideas have existing competitors. The reason there are no competitors is because no one wants the product. - A great situation is where there are existing competitors but you’ve noticed something they all seem to have missed, or they all suck. - What’s the unique insight? Dropbox realized the UX sucked with all existing ~20 competitors. Drew realized that if you could patch into the host operating system you could sync all the files automatically. That was the right insight. Generating organic startup ideas - Become an expert on something valuable. - Work at a startup. - Build things that you find interesting. Generating startup ideas forcefully - Start with what your team is especially good at and think of ideas that take advantage of your expertise. - Automatic founder market fit. - Rezi, open-door for rental apartments. Founders had worked in real estate and debt financing. When they got into YC they spent the first month looking for ideas. They only looked at the intersection of real estate and fintech. That’s a fertile space. - Start with a problem you’ve personally encountered, ideally one you’re in a unique position to see. - Vetcove. Dad was a vet and was using old school ways to order supplies. - Think of every job you’ve had (+ internships and life experiences). What problems did you come across that other people don’t know? - Think of things that you wish existed. - Order food from local restaurants. - Most likely to hit tarpit ideas. Is there a structural reason this doesn’t exist? - Look for things in the world that have changed recently that might have created a new opportunity. - The pandemic changed daily life. - Gathertown. Fun way to hang out with people online. - Variants of successful companies. - Nuvo cargo - flexport for latam. Large market, good proxies, even though he didn’t have domain expertise - Talk to people and ask them what problems they have - Find a fertile idea space and talk to people in the space. - AtoB founders literally went and talked to truck drivers at pit stops and talked to founders in the space. - Big industries that are broken - Find a cofounder with an idea lol

[@tahamian4822]

hello there brother, thank you for this summary. did you right all of this or did you use some sort AI (i am asking so i could boost my productivity) to help you because this was great

[@startupengineer]

@@tahamian4822all manual, otherwise I won’t retain anything 😅

[@bivegeteshemarodriguekevin5229]

Thank you so so much ❤

[@user-dx3mg5fy8r]

❤

[@emmanuelagana3766]

Bless you brother

[@rupamkundu3574]

This is life changing advice! Keep up the good work YC!

[@bilbobeutlin3405]

Him picking up the bottle and not drinking somehow triggered me so hard Apart from that, great video

[@Ms_3sam3]

Me too, I don't know why

[@etekumoses3320]

It’s an idea I see a problem in that 😂😂

[@jolima]

The moment you realise the guy is high on a cocktail of psychedelics and amphetamines 👀

[@bilbobeutlin3405]

@@jolima you might be onto something here, he barely blinks...

[@Rugby2000]

I am so glad I am not the only one who that disturbed😑

[@parthi2929]

Summary: 3 Parts Common mistakes - just building that doesnt solve real problems (Solution in search of a Problem - SISP). - tarpit idea (existing ideas, not taking off - ex, task planner), - not evaluating the idea, picking first idea, etc - waiting for perfect idea on other side of spectrum - Paul - an idea is a good starting point If your idea good? - 10 key questions - founder/market fit? - good idea for team - how big is market? big now & small now, but rapidly growing - how acute is this problem? Ex. Brex - do u have competition? competition is good. - do you want this? do we know personally someone wanting this? - only recently possible or recently necessary? Ex.Checkr - r there good proxies for this business? (similar, not direct competitor) Ex. Rappi - is this an idea u want to work on for years? often, idea morphs, could also be boring. - is this a scalable business? - is this a good idea space? Ex. Fivetran 3 things that make idea seem bad, but actually make them good (most founders shy away) - schlep blindness. Ex. Stripe. Read Paul Graham's article. - hard to get started - boring space (Ex, payroll), boring doesn't matter as we grind, anyway - existing competitors (Ex, dropbox) - needs specific insight how to come up with new ideas? - made up idea possible, btu not best way. Organic is better. - long game - become expert, work at startup, just build things (thought not startup idea) - 7 recipes - start with team expertise, idea taking advantage of that expertise (Rezi)- interdomain advantage - start with problem encountered (Ex, Vetcove) - things you personally wish existsed (Ex, Doordash) - beware of tarpit - things that have changed recently Ex. Covid => gathertown - new variants of successful companies Ex. nuvo cargo - talk to people and ask what problems (first idea space), Ex. AtoB - big industries seem broken => right for disruption - find cofounder in yc No one knows for sure if good, so just launch and find out

[@samanmonazami9156]

Thanks!

[@William_Clinton_Muguai]

Invaluable! 🙏

[@tolgaylmaz479]

who asked

[@dark___light]

thanks

[@allenllewellynkra]

Thanks!

[@AryanChaurasia10]

I am so grateful for getting access to these high quality content! Thank you all!

[@akshatjainbafna]

Your guys' explanation is so cool, I wish I had all the teachers explaining all the technical lessons with this pedagogical approach. The way he told Hmm! AI is cool what can I apply AI to.

[@assaflaufer6762]

One of the best videos EVER about this topic, and I have seen a lot...

[@martinstine]

Great course. I got an idea on how to market myself startup while taking this course. Bunch of thanks YC and Jared.

[@lailaalfaddil7389]

That's right, getting in touch with an FA during the pandemic was how I was able to scale through the crazy stock downtrend and helped me stay in profit & save my finances.

[@razor8629]

17:10 Come on Jared - I was waiting for you to drink... and you did nothing 🤷‍♂- Ahhhhh SO FRUSTRATED 😡!

[@mahedul]

yeah man same.

[@AC7-5EP]

Thank you Mr. Friedman for the very insightful speech.

[@AlphaChinou]

This YC channel is amazing stuff. The best I have found anywhere.

[@ariellozon4893]

Just a great video. totally practical. totally grounded and totally based on experience. Thanks!!

[@saidmuminrahmatov5451]

this is the most insightful material from your channel so far ! God bless that guy!!!! This speaker need to do the majority of upcoming material because of his ability to deliver his thoughts and key insights PERFECTLY!!!

[@nezrinmelikova1877]

I really appreciate it. Really helpful and insightful video. Thanks a lot to everyone who has an effort on this video.

[@ivanalcazar9060]

Amazing that a resource like this is free. As someone who is looking into entrepreneurship after consulting, this has been helpful with trying to understand idea generation and evaluation.

[@ashwinkale2870]

hey you worked into consultancy industry

[@chrcz8346]

Amazing that you’re sharing this. Thanks. It’s adorable how he grabbed the water and never drank. I would’ve waited for you to drink so that’s my idea for him. We’re even. :)

[@imamsandrabbis]

This is gold, thank you for sharing these resources!

[@itsbonakim]

This is amazing! Thank you for sharing. I'm a product designer, and while I am not looking for a start up idea right now, I think these principles are applicable at work as well. Thx!!!

[@rish5152]

Hello! Anyone in need of a project manager and a academic writer to inbox me. Referrals will be greatly appreciated.

[@alexk219]

I don’t ever comment on videos, but this was fantastic. Tons of lightbulb moments while watching this. Thank you

[@chapterme]

Chapters (Powered by ChapterMe) - 00:00 - Finding a promising idea 00:51 - Where does this advice come from? 01:44 - 4 most common mistakes 01:47 - Not a real problem 03:12 - Getting stuck on a tarpit idea 05:38 - Not evaluating an idea (or) Waiting for the perfect idea 06:29 - 10 key questions to ask about any startup idea 06:41 - Do you have founder/market fit? 07:59 - How big is the market? 08:31 - How acute is the problem? 09:12 - Do you have competition? 09:30 - Do you want this? 09:50 - Did this recently become possible or necessary? 10:46 - Are there good proxies for this business? 11:18 - Idea you'd want to work for years 11:55 - Is this a scalable business? 12:15 - Is this a good idea space? 14:40 - 3 things that make your startup idea good 15:14 - Hard to get started 16:25 - Boring space 17:59 - Existing competitors 19:42 - How to come up with startup ideas 21:25 - 7 recipes for generating startups ideas 21:40 - What your team good at 23:31 - Start with a problem you personally encountered 24:59 - Using recipes one and two 25:44 - Personally wish existed 26:22 - Things that have changed recently 28:08 - Talk to people and ask their problems 31:16 - Big industries that seem broken

[@setoelkahfi]

You're really useful, robot.

[@monsieuralexandergulbu3678]

Good bot, have a snack

[@nachoantolin8071]

You forgot about the: 17:10 - Water drinking try

[@george_davituri]

wonderful chapters 🍵👍

[@scienceness6689]

WHICH BOT BRO ?

[@kamertonaudiophileplayer847]

It is a very helpful video. It helped me to find three very good ideas. Thank you, man.

[@ArunKumar-jk5pq]

An awesome talk. It is inspirational to see folks interested in seeding "founders" in the audience.

[@PranavRajagopal]

I really want to start a business. Thanks for this video! Need all the advice I can get

[@shahincassim1855]

This this the single best presentation I have had on SaaS. The presentation and structure were well laid out. The content is amazing. Thank you very much.

[@AkshitChaudhary0]

This Video is more worth than a Whole book on this topic

[@harrison6082]

18:30 Good point! If not that many people are using it and the competition sucks, then that could be a good area to look into

[@astrarai-thesobercoder]

Agreed 💯

[@devmaycry4703]

Thanks, Jared! Really practical and useful piece of information.

[@alaetazrouti]

thank u so much for sharing this valuable tips with us!!

[@franciswong5249]

Jared is the best, such great advice and insight!

[@techytimo]

Honestly this is very valuable. Thank you!

[@apurav2007]

Extremely helpful. Thank you

[@GeorgiDimitrovX]

Such an insightful talk. Thanks Jared

[@Yaxqb]

Insanely inspiring advice. Thank you!!!

[@PeterSodhi]

You are amazing thank you for sharing. We will make this our innovation intake process!

[@davidhernandez9275]

Thank you for the video! In 2 aspects I got confused, could u please elaborate? 1) You recommend avoiding products that seem "fun" but then you recommend that if you are a programmer, you should code projects that you find interesting 2) In some moments you mention it is bad if the product doesn't have competitors because it means maybe people didn't want this solution, but then you mention that it is counter-intuitive but it is good having competitors

[@juanmartinlloret3686]

Great video, keep the good work YC!

[@naseelrahim]

this is phenomenal.straight hit.Insha Allah i will be pitching at YC in the near future..

[@jenchow1036]

Thanks for sharing this!

[@CleopatraShamiso]

So practical and encouraging. I got down a lot of notes.

[@boxer1129]

This is just incredible. Thank you!

[@justinwitcoff8951]

This is extremely helpful. Thank you, YC

[@sifisohadebe5401]

Thank you! This video is the inspiration i needed.

[@kunle009]

This is golden. Thanks for this. I hope to make good use of this info's.

[@hyderabbasi]

Amazing advice. Love the podcast too.

[@rouakrimi]

Excellent video with very useful tips, Thank you!

[@vollmerama]

This really is an amazing channel for me as a UX designer.

[@abenjamin13]

Thank you very much. GReatly appreciate this advice.

[@mahdi5796]

Thank you. It was insightful.

[@Ms_3sam3]

Really great video, I've learnt a lot, Thank you.

[@kodykendall]

Is there anywhere we can learn about "idea spaces"? Has anyone put together a comprehensive list, and their hit rates? That would be an extremely interesting set of data to look at.

[@johnstalkernet]

Excellent. Thank you very much!

[@Lightrunnerr]

The bad tarpit idea (3:16) and a good hard-to-get-started idea (15:14 ) seems pretty similar. Both are fairly obvious ideas that make you wonder why no one did it yet. Both are harder than expected.

[@pditty8811]

We've been taking shots every time he says the work "Sucked". I see two of every word I'm typing and I'm shitfaced...

[@rish5152]

Hello! Anyone in need of a project manager and a academic writer to inbox me. Referrals will be greatly appreciated.

[@enesxmusa]

Beyond fruitful. But it would be great to focus a bit more on people who don’t have expertise as they’re either young or still studying. Just like the founders in the Truck industry you mentioned. Detailed information and instructions would be really appreciated!

[@lvhise]

This was extremely informative and inspirational. Thank you so much! Going to find my co-founder now!

[@mrmrjims3865]

I wish I had show this to my teammate at school at entrepreneurship projects, they were rejecting any idea that simply appear to exist in Google, or exclude anything that look boring

[@ib_concept]

Awesome. Ideas that take advantage of your expertise

[@quanxu1]

Excellent video! The concepts are clearly explained and with examples. Anyone noticed that Jared is dressed like an engineer rather than an executive? Kind of resonant to some of the concepts mentioned here :)

[@PortmannInternational]

Great presentation. Thank you

[@zma8080]

Omg … when you didn’t drink … killed me

[@joyhoon]

I fill really thirsty because of this

[@auguststas7770]

Pure gold. It is somehow not the same like the people teach in university. Maybe it is because of teacher but That is very cool.

[@yafiwala]

17:00 is just so true ❤

[@michaelmcwhirter]

Woah! Let's hear more from this guy!

[@junrepasa]

Great content thanks so much.

[@JaimeGuajardo]

Wow one of the best startup videos ever

[@YosmelLGD]

This was an amazing talk wow !!

[@faisalalmansour9090]

Great video. Thank you!

[@archiee1337]

Perfect timing

[@PidaTakesaris]

Are you guys at YC only tech, do you look at humanitarian products eg green energy solutions, or novel hardware for aerospace, industrial & domestic markets?

[@AlessandroOrlandi83]

Very interesting video. thank you!

[@rafaelruiz3459]

Great Video. From Panama!

[@kaafoezoker1605]

I will research and stand on my square.I respect the accelerator. Problem solving.If I come to you it will be correct.

[@greenhouse_fin]

Thanks man!

[@liamtal3324]

maybe do a video of solving founder/market fit Thx

[@devjeet_choudhury]

Tarpid ideas can also work if you have relevant connections and a rough idea of how you can execute them.

[@17teacmrocks]

some proxies don't work due to differences in other geographies like 1) whoever thought uniqlo would do well in the US like in JP clearly didn't realize our clothing market is much more diversified with pricing accessible to everyone. (JP used to have limited options between expensive foreign imports and ultra-cheap street shop clothing with variable quality). 2) McD's trying to compete in SEA, where local tastes and ingredients were vastly different, local competition was at least as cheap, better tasting, and familiar

[@qbakuba2057]

great advices thanks

[@aldorodriguez7310]

This content is magnificent, It’s Ivy League quality from people who are in the trenches.

[@RoyPark2638]

Good Ideas 1. Hard problem 2. Boring space 3. Existing competitors

[@Minsturuiop]

Great info!

[@kalimistakidou9103]

So many gems; thank you YC🙏

[@rahi_joshi]

Excellent talk!

[@RoyPark2638]

7 Recipes for generating startup ideas 1. Start with what your team is especially good at -> automatic founder market fit 2. Start with a problem personally encountered 1 & 2 -> 1. think of every job you've had. 2. What are problems or opportunities you've been in a special position to see? 3. Think of things you personally wish existed -> Doordash, but dangerous to be tarpit idea. 4. Look for things in the world that have changed recently -> c19 example 5. Look for new variants of successful companies -> Nuvocargo example 6. Talk to people and ask what problems they have -> requires a lot of skills. Pick a fertile idea space, and talk people in that idea space, not just to potential customers, but also to founders of companies in that idea space to get advice what ideas are actually worth pursuing. Gooe example is AtoB: Makes a fual cards for truck drivers, pivoted idea, and spent whole YC batch time to find a idea. 1. Picked an idea space. 2. Drove to truck stops and talked to potential users. 3. Asked other founders about the industry. 4. Evaluated several ideas before picking fuel cards. I'm willing to put my work since I am doing this for full-time. I go with 6. 7. Look for big industries that seem broken

[@CaliforniaRussianRiverBees]

Great Information. Just Do It !!!!🏀

[@ektasinha9159]

Let's say you have an idea, you believe it will solve a problem in the market. But you need additional data such as sending a survey or conducting some coffee chats with people to evaluate if this is a real pain point. Anybody who responds to the survey or comes to your coffee chats would in future not be able to claim any right to the success of your product in the future as they were simply providing early feedback. Is that understanding correct? Trying to see if it is necessary to get some kind of NDA or other doc signed by people who give feedback in early stages of the product ?

[@EricMills]

Is there any concrete data around idea space hit rate?

[@princecanuma]

Best advice ever!

[@RoyPark2638]

Hello YC! It's Roy! Thank you so much for sharing this valuable content! It's so amazing, and I learned so much from it. I love it because this video indicated the exact problem I had - mistake 1: AI is excellent, and try to solve it. I will go do SISP and find a problem to fall in love with.

[@britannio]

Wait, the idea is to avoid working on a SISP right? Becoming an expert in AI is great, building an AI product that nobody wants is not so great.

[@RoyPark2638]

@@britannio thanks for the comment. I rewatched the video, and you are right. SISP is something we should avoid. However, I would like to get some clarification because I was considering looking for a problem like AtoB company. The video explanation is at 28:42.

[@britannio]

@@RoyPark2638 In that case, the founders were going up to truck drivers and asking them what problems they faced (searching for a problem). This is different to first developing a product then hoping to find some truck drivers that might hypothetically have a use case for it. Solution In Search of a Problem (SISP) is a solution developed without considering the problem whereas, to avoid wasting your time, you want to always find the problem first.

[@britannio]

Here's another good video kzbin.info/www/bejne/eoDXdJ9rhbprfJI

[@RoyPark2638]

@@britannio That's clear! Thank you very much for the clarification!

[@shreyajain8735]

Which editing app did you use to make the first screen?

[@juniorsolo518]

Just launch it and found out

[@1000xdigital]

Sometimes localized problems that are relevant to a niche (with big market share) and specific to your country.

[@user-io8sl3qx6v]

Thank you Sir :)

[@bug_fixes_and_bucket_lists]

This is a really great video

[@red_brains]

I have a good idea that people face this problem everyday (and they get used to it :() But I lack skills and it takes me around 6 months to get the skills needed to built this startup. Unfortunately I've shared my idea with couple of coursmates. What should I do (1. Start project after 6 months hoping no one will steal my idea; 2. Start now, build project with programmers and share income with them?🤯)

[@user-vm1ie1mx7i]

How is this possible, looks too good to be true

[@mandrivnyk-evhen]

Thank you, Jared. Glad to get new useful video with advise. Will try to apply it to my new idea. Thanks, from Ukraine 🇺🇦

[@BrodieTheAthlete]

Thanks YC 🙏

[@kaafoezoker1605]

Product fit and team.

[@alqassemnasr2864]

good explanation👍

[@scienceness6689]

00:11 Common mistakes with startup ideas 02:07 Fall in love with a high-quality problem to find a startup idea. 06:01 Founder market fit is crucial for a startup idea to succeed. 08:01 Evaluate the startup idea based on market size, problem acuteness, competition, personal interest, and recent changes. 12:16 Choosing a good idea space is crucial for startup success. 14:20 Picking a good idea space is crucial for finding startup ideas. 18:28 Dropbox saw opportunity in a crowded market 20:15 To generate organic startup ideas, become an expert on something valuable, work at a startup, or build things that interest you. 23:48 Vetcove founders noticed a problem in the old-fashioned way veterinarians order supplies and built a solution. 25:45 Think of things you personally wish existed 29:14 A to B founders became experts in the trucking industry by physically talking to truck drivers and other founders. 31:03 Finding startup ideas: anyone can do it, but it requires effort Crafted by Merlin AI.

[@alexanderthefirst6002]

How would you mvp a distribution business?