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I've asked 750+ startup founders. "How did you come up with your idea?" Here are their answers

First, they most commonly say:

"Solve your own problems. Meaning, live on the edge of tech and see what issues you encounter. Then build a startup to solve it."

I agree, and I love that.

But it's not the whole answer you want. Where do these problems actually come from?

1) I’ll start by defining what a good startup idea looks like to me.

It offers a meaningful benefit, such as:

  • A big reduction of an intense/frequent frustration

  • A big reduction in the cost of an expensive problem

  • A big increase in how entertaining/emotional a thing is

2) I call these 3x ideas

— ideas compelling enough to overcome the friction to try 'em. Btw, some people say startups must be "10x better to succeed." This is misleading.

For an app to be 10x better, than, say, Uber, it would have to straight up teleport you to your destination.

3) Examples of real 3x ideas:

  • Dropbox/Box: Cheaply share files without coordination or friction

  • Instacart: Get groceries delivered—without a big cost premium

  • Uber: Get a cab 3x faster, in 3x more locations, and for cheaper

4) So, where do these 3x ideas come from?

From the creation of new infrastructure—either technological or legal.

I keep an eye on this. For example:

1. New technologies

  • Fast mobile processors

  • High-capacity batteries

  • Cryptocurrency architecture

  • VR

2. Changes in the law

  • Legalization of marijuana

  • Patents expiring (And 1,000 more infrastructure examples.)

When new technological/legal infrastructure emerges, startups pounce to productize the new 3x possibilities.

Those possibilities fall into categories:

1. Cost reductions:

  • Cheaper broadband enables cloud storage (Dropbox)

  • Cheaper batteries enables electric cars (Tesla)

2. Better functionality:

  • Smartphones and 3G spawned the mobile era

3. Brand new categories:

  • The legalization of marijuana spawned weed stores and weed delivery apps (And more.)

So takeaway number one is that new infrastructure spawns startups.

5) But, we're not done.

For those ideas to survive in the market, I believe you need another criterion:

Cultural acceptance. Society has to be ready for you:

Here are startups that became possible through changes in societal behavior.

1. Pop culture making behaviors less cool:

  • Cigarettes go out of style, so we get nicotine and vaping

  • Heavy drinking goes out of style, so we get low-alcohol seltzers

2. Mobile apps making it more normal to trust strangers:

  • The rise of Uber, Airbnb, Tinder, and couchsurfing better acclimated society to trusting people they’ve only met over the Internet. This next part is important:

6) Implication: Study changes in infrastructure plus shifts in cultural acceptance to identify what’s newly possible in your market. Here's an example:

Uber saw that widespread smartphone adoption with accurate GPS data made it possible to replace taxis with gig workers.

Cultural acceptance was needed here—because it was unorthodox to step into a stranger's car and entrust them with your safety.

7) Okay, so let's turn all this into a framework.

Here's just one way to find startup ideas.

Step 1: Spot upcoming infrastructure

Step 2: Determine if market entry is now possible

Step 3: Explore second-order ideas too

8) Second, when another startup captures a 3x benefit,

it typically produces many downstream 2x ideas.

This is a key point.

For example, now that millions use 3x products like Slack, Zoom, and Uber, what tools could make them less expensive, more reliable, more collaborative?

9) To recap: One way to find startup ideas is to study infrastructure (3x ideas) and observe what emerges from startups that tackle that infrastructure (2x ideas).


Originally Posted by https://twitter.com/Julian
Compiled into a post by me!

  1. 2

    Awesome stuff. You're making me think I'm about to create the next Uber.

  2. 1

    Cultural acceptance is to me the most crucial criteria. Even the best startup ideas won't work if society is not ready to embrace them. Thanks for sharing!

  3. 1

    That's impressive! Thanks for sharing it.

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