How the Best Founders Get Them and Why Novelty Is Overrated

Some interesting ideas in this post which I pulled out the ones that I liked the most. Click the link to read the full outline.


…if you want to start a startup, you’re probably going to have to think of something fairly novel. A startup has to make something it can deliver to a large market, and ideas of that type are so valuable that all the obvious ones are already taken.

That space of ideas has been so thoroughly picked over that a startup generally has to work on something everyone else has overlooked.

Part 1: Ideation–Creative Thinking

The Stages of Creativity

In 1926, Graham Wallas conducted pioneering research into creativity and came up with five stages of creativity. I have taken most of the following stages from the Wikipedia article on creativity.

  1. Preparation. Preparatory work on a problem that focuses the individual’s mind on the problem and explores the problem’s dimensions.

  2. Incubation. Where the problem is internalized into the unconscious mind and nothing appears externally to be happening.

  3. Intimation. The creative person gets a “feeling” that a solution is on its way.

  4. Illumination or insight. Where the creative idea bursts forth from its preconscious processing into conscious awareness.

  5. Verification. Where the idea is consciously verified, elaborated, and then applied.

Part 2: Evaluation–What Makes a Great Startup Idea

Part 3: Pre-Inventive Frameworks for Startup Ideas

In reality, nothing is as cut-and-dried as this chart. Some ideas hover near the boundaries and some ideas move from one category to another; they seem strange at first but become paradigm-shifting. Others seem incremental at first but become revolutionary.

We can also use the idea matrix to distinguish between two different types of startup ideation: those that focus more on utility and those that focus on novelty.

NoveltyEntropy.png

There are several important novelty advantages:

  • Ability to make money without competition for a period of time

  • Ability to secure venture capital (more and earlier)

  • Branding

  • Ability to learn earlier

  • Ability to get lock-in (network effects)

  • (If possible) an ability to secure a patent on an idea

Believe it or not, there are probably several novelty disadvantages too:

  • Pioneering an idea that others can copy with less effort / cost

  • Educating the market about an idea which will benefit all competitors

  • Inability to meet all of the demand

As a market moves toward efficiency it often passes through 3 stages:

  1. No competition and not enough supply

  2. Competition but still not enough supply

  3. Full competition and full supply

The biggest difference was that serial entrepreneurs were much more likely to leverage their industry expertise to find their startup idea.

To find startup ideas based on your expertise, ask yourself the following questions:
What areas of expertise do I have?

In those areas, what problems need to be solved?

  • What solutions would I like to see?

  • Is there big enough demand in this area that I could start a business and be successful?

  • Could I spin out some part of the business I am currently in?

  • Could I spin out a division?

  • Have I noticed any underserved customers in my current business that would benefit from a different solution?

16 Pre-Inventive Frameworks for Startup Ideas

Over the years, I have compiled a list of 16 pre-inventive frameworks for finding startup ideas:

  1. Test, Pivot, Iterate

  2. Scratch Your Own Itch

  3. Do What You Love

  4. The Hedgehog Concept

  5. Change the World

  6. Solve a Difficult Problem

  7. Catch a Wave

  8. Copy (With Or Without Modification)

  9. Predict the Future

  10. Startup Taxonomies

  11. Find Competitive Advantage

  12. Transplant

  13. Find a Niche

  14. Find a Forgotten Idea

  15. Find Effective Surprise along the Pivot Pyramid

  16. Analogize

#3 Do What You Love

“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.” —Steve Jobs from his Stanford Commencement Address

Based on Collins’ research, a successful startup idea can be uncovered by asking yourself these three questions:

  1. What am I passionate about?

  2. What can I be the best in the world at doing?

  3. What could I do that would make me enough money?

#6 Solve a Difficult Problem

Ask yourself:

  • Have I or has anybody I know developed a novel solution to a problem?

  • Am I aware of an unmarketed technology that could solve a big problem?

  • Could I find one?