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Startup IDEASand VALIDATION
Every startup begins with an
idea
Links in websites can be ranked like citations in academic papers
Professionals need an online presence and social network
This is a talk about coming up with ideas
And pickinga good one
through validation
Founder of
Atomic Squirrel
atomic-squirrel.net
PAST LIVES
1. Inspiration2. Knowledge3. Environment4. Problem5. Market6. MVP
Outline
1. Inspiration2. Knowledge3. Environment4. Problem5. Market6. MVP
Outline
Where do ideas come from?
Is it from aflash of insight?
Thomas Edison and a light bulb
Isaac Newton and an apple
Archimedes and “Eureka!”
Actually, most historians believe the “Eureka!” story
is made up.
An apple did not hit Newton. He studied gravity for 20
years.
Edison didn’t invent the light bulb, but an affordable
filament.
After testing thousands of materials.
“I have not failed. I've just found 10,000 ways that won't work.” – Thomas Edison
Ideas are not just flashes of insight. They grow and
evolve.
Which means first, you must plant seeds
The seeds of ideas are knowledge
1. Inspiration2. Knowledge3. Environment4. Problem5. Market6. MVP
Outline
What do the following songs have
in common?
They are all based on the exact same 4 chords
And so are dozens of other hit songs
Top 100 movies, 2000 - 2009
74 of them were sequels, remakes, or adaptations
The sequel to a movie based on a cartoon based on a US toy based on Japanese toy.
Not the first search engine (Yahoo, Altavista, Excite, etc.)
Key idea copied from bibliometrics and citation analysis
Not the first social network (SixDegrees, Friendster)
Not the first professional network (Ryze, Xing)
This talk is a remix of
my book
My book isa remix of
other books
1. Inspiration2. Knowledge3. Environment4. Problem5. Market6. MVP
Outline
Throughout history, we often see multiple
discovery
“I invented nothing new. I simply assembled the discoveries of other men behind whom were centuries of work. Had I worked 50 or 10 or even 5 years before, I would have failed. So it is with every new thing.
Progress happens when all the factors that make for it are ready, and then it is inevitable. To teach that a comparatively few men are responsible for the greatest forward steps of mankind is the worst sort of nonsense.” – Henry Ford
The environment plays a huge role in coming up
with ideas
The key ingredients:
1. Keep an idea journal2. Get away from work3. Add constraints4. Live in the future5. Look for pain6. Talk to others
The key ingredients:
1. Keep an idea journal2. Get away from work3. Add constraints4. Live in the future5. Look for pain6. Talk to others
Not a diary, but a way to log ideas whenever you have them.
No filters. Don’t judge your ideas. Just write them down.
Write down not only ideas, but also problems and questions.
A UC Davis study by Dean Kean Simonton found eminent achievers produce not only more “great” works, but also more “bad” ones.
“The best way to have a good idea is to have a lot of ideas.” – Linus Pauling
Review periodically. This is how ideas grow and evolve.
The key ingredients:
1. Keep an idea journal2. Get away from work3. Add constraints4. Live in the future5. Look for pain6. Talk to others
First, work intensely to load the problem into your mind.
Then get away from work.
Einstein had his best ideas during violin breaks.
Some people get ideas in the shower. I get mine on walks.
The key ingredients:
1. Keep an idea journal2. Get away from work3. Add constraints4. Live in the future5. Look for pain6. Talk to others
In 15 seconds, write down as many things that are white as you can think of.
Do the exercise again, but this time, write down white things in your refrigerator.
Which was easier?
Constraints breed creativity
Someone once challenged Ernest Hemmingway to write a story in just 6 words. The result:
For sale: baby shoes, never worn.
If no ideas are coming to mind, try narrowing the problem space
The key ingredients:
1. Keep an idea journal2. Get away from work3. Add constraints4. Live in the future5. Look for pain6. Talk to others
“Live in the future, then build what’s missing.” – Paul Graham
But how exactly do you live in the future?
“Skate to where the puck is going to be, not where it has been.” – Wayne Gretzky
The key ingredients:
1. Keep an idea journal2. Get away from work3. Add constraints4. Live in the future5. Look for pain6. Talk to others
Where there is pain, there is opportunity
“This is stupid, there must be a better way” – Mahmoud Al-Qudsi
“Is this how the world should be?” – Reid Hoffman
The key ingredients:
1. Keep an idea journal2. Get away from work3. Add constraints4. Live in the future5. Look for pain6. Talk to others
Don’t keep your ideas secret.
If someone could beat you just by hearing your idea, it wasn’t a defensible idea to begin with.
Two minds are greater than one
Just explaining your ideas out loud will reveal new ideas
Even if the other person isn’t an expert in that domain
Even if the other person isn’t a person (rubber duck debugging)
1. Inspiration2. Knowledge3. Environment4. Problem5. Market6. MVP
Outline
“The surprising fact is that companies large and small, established
corporate giants as well as brand new
startups, fail in 9 out of 10 attempts to launch
their new products.”
CB insights looked at the post-mortems of 100+ failed startups
The #1 cause of failure: “no market need”
Don’t spend years working on the wrong problem
It’s easy to find something that sounds like a problem,
but isn’t
Consider the dental industry
Problems to solve: Healthy teeth, healthy gums
Problems to solve: white teeth, fresh breath
Wrong problem means wrong products, marketing, sales
“People don't want to buy a quarter-inch drill. They want a quarter-inch hole!” – Theodore Levitt
How to validate you’re solving the right problem:
1. Ask who will buy it?2. Ask the 5 whys3. Ask why now?4. Ask why you?
How to validate you’re solving the right problem:
1. Ask who will buy it?2. Ask the 5 whys3. Ask why now?4. Ask why you?
Find a customer before you build the product
Don’t build anything until they commit to buying it.
Who would buy a non-existent product? An
earlyvangelist.
Earlyvangelist:
1. They have a problem.2. They’re aware of the
problem.3. They built an interim
solution.4. They have money to spend.
To find these customers, you’ll have to get out of the
building
How to validate you’re solving the right problem:
1. Ask who will buy it?2. Ask the 5 whys3. Ask why now?4. Ask why you?
If you ask people what coffee they like, most would say, “a dark, rich, hearty roast.”
But what most people actually like is milky, weak coffee.
“If I had asked people what they wanted, they would have said faster horses.” – Henry Ford
You have to dig to find the real problems and solutions.
“The truck won’t start.”
“The battery died.” “Why?”
“The alternator wasn’t working.”
“Why?”
“The alternator belt broke.”
“Why?”
“The belt wasn’t replaced on time.”
“Why?”
“We didn’t follow the maintenance
schedule.” “Why?”
How to validate you’re solving the right problem:
1. Ask who will buy it?2. Ask the 5 whys3. Ask why now?4. Ask why you?
The famous question from Sequoia Capital: Why now?
Why not 2 years ago? 2 years from now? What changed?
Example: Webvan vs Instacart.
How to validate you’re solving the right problem:
1. Ask who will buy it?2. Ask the 5 whys3. Ask why now?4. Ask why you?
You found a real problem. Should you be the one to
solve it?
Don’t ignore aspirations
It takes, on average, 10 years to build a successful startup
Are you willing to dedicate a decade of your life to this?
If you’re willing, the next step is to evaluate the market
1. Inspiration2. Knowledge3. Environment4. Problem5. Market6. MVP
Outline
How many customers do you need to be successful?
For example, if you want to do $1B in revenue some day:
Sell product at: $1 to 1 billion: Coca-Cola (cans of soda)$10 to 100 million: Johnson & Johnson (household products)$100 to 10 million: Blizzard (World of Warcraft)$1,000 to 1 million: Lenovo (laptops)$10,000 to 100,000: Toyota (cars)$100,000 to 10,000: Oracle (enterprise software)$1,000,000 to 1,000: Countrywide (high-end mortgages)(from the Stanford Startup Engineering Course)
Market sizing techniques:
1. Research competitors2. Use ad-targeting tools3. Find a community4. Do some good-old research
Market sizing techniques:
1. Research competitors2. Use ad-targeting tools3. Find a community4. Do some good-old research
Competitors are a form of validation too.
Tools to research competitors:1. Web analytics
Quantcast, Moz, Comscore, Alexa, SimilarWeb2. Mobile analytics
App Annie, Apptopia, Xyo, Apptweak3. Social analytics
Fanpage Karma, SpyFu, Google Trends, Twitonomy4. Funding
CrunchBase, AngelList, Owler, Kickstarter
Market sizing techniques:
1. Research competitors2. Use ad-targeting tools3. Find a community4. Do some good-old research
Use ad-targeting tools to explore market demographics
Ad-targeting tools:
1. Google Keyword Planner2. Facebook Ads3. LinkedIn Ads4. Twitter Ads
Market sizing techniques:
1. Research competitors2. Use ad-targeting tools3. Find a community4. Do some good-old research
There may already be a community for your product
Community tools:1. Meetup.com2. Lanyrd3. Subreddits4. Quora topics5. LinkedIn Groups
Market sizing techniques:
1. Research competitors2. Use ad-targeting tools3. Find a community4. Do some good-old research
Research tools:1. Newspapers, books, journals2. Government reports, SEC filings3. Google4. Google Trends5. World Bank Data6. AYTM Surveys7. Nielson Research
If the market is big enough, the next validation step is
the MVP
1. Inspiration2. Knowledge3. Environment4. Problem5. Market6. MVP
Outline
A Minimum Viable Product is not a product. It’s a process.
“You know that old saw about a plane flying from California to Hawaii being off course 99% of the time—but constantly correcting?
The same is true of successful startups—except they may start out heading toward Alaska.” – Evan Williams
Naïve view of product development
A more realistic view of product development
In a trial-and-error world, the one who finds errors fastest,
wins.
The MVP process is repeatedly ask yourself two
questions:
1. What’s my riskiest assumption?
2. What’s the smallest experiment to test it?
The smallest experiment doesn’t have to be a product.
Landing pageMVP(Buffer)
Explainer video MVP (Dropbox)
Crowd-funding MVP (Pebble)
The smallest experiment does have to be viable
Let’s go through an example
1. Inspiration2. Knowledge3. Environment4. Problem5. Market6. MVP
Outline
For more info, see
Hello, Startup
hello-startup.net
For a list of startup ideas, market sizing tools, and MVP
tools, see hello-startup.net/resources
Questions?
Light bulb (blue): Serge SaintLight bulbs (many): Andrew MooreThomas Edison with bulb: WikimediaIsaac Newton: WikimediaArchimedes: WikimediaThomas Edison: Louis BachrachPotted plant: Craig SunterWindows: WikimediaMac OS: WikimediaXerox Alto: DigiBarnNLS Computer: Mother of All DemosJourney: WikimediaElton John: WikimediaBeatles: WikimediaLady Gaga: WikimediaInformation vs knowledge: gapingvoid
Everything is a Remix: Kirby FergusonCopy, transform, combine: Kirby FergusonGottfried Wilhelm von Leibniz: WikimediaIsaac Newton: WikimediaAlfred Russel Wallace: WikimediaCharles Darwin: WikimediaElisha Gray: WikimediaAlexander Graham Bell: WikimediaHenry Ford: WikimediaMoleskine: Barn ImagesLinus Pauling: WikimediaGlasses: Matheus AlmeidaWalk in the park: Brian SmithsonBarbed wire: Alexandre DulaunoyWayne Gretzky Game: Alan KayBlueprint: Will Scullin
References & image credits, part 1
References & image credits, part 2Egg: Kate Ter HaarMeeting: Simon BlackleySteve Blank: WikimediaDeath Valley: 白士 李Men shaking hands: DidriksToothpaste: William WarbyColgate aisle: Fredrik RubenssonCrest Pro Health: m01229Listerine: Mike MozartCrowd: Scott CresswellArm wrestling: U.S. Army Europe ImagesCommunity: Kat
Clock: Earls37aEvan Williams: WikimediaMVP car: Henrik KnibergWayne Gretzky: WikimediaPaul Graham: WikimediaLab experiment: UCLDean Simonton: UC DavisGoogle Analytics: Blue Fountain MediaCoffee cup: OiMaxTruck: darkdayReport: Juhan Sonin
