Evaluating StartUp Ideas (Part 2)
I present to your attention the translation of the second part of the article, authored by Paul Tyma , according to the evaluation of StartUp-ideas. Translation of the first part here .
1) Let the ideas ripen. Every new idea seems the most delightful of all the ideas that I have ever had. Usually it starts like this:
After I began to admire too many ideas, I made a rule for myself. I reflect on the idea for three days, only after that I am voicing it. In the first and subsequent days I myself am not my own from excitement, but by the end of the third day I calm down. Or not, and I get the feeling that I really stumbled upon something worthwhile. Simply put, ideas always look better, while they are "piping hot." You are looking for ideas that seem different even as time passes.
2) Take into account the size of your market. If you read Guy Kawasaki's blog, then you probably saw him mentioning how often new companies brag about the huge size of their new market. Guy scolds them for being overly optimistic, but he also knows that it is better to believe that the market is indeed large (and it is possible to exaggerate its size in conversation), or forget about it. Numbers of hundreds of millions and billions are good - in fact, you are hoping to get at least a drop.
Consumer markets may be prohibitively large. If you are a guy from the basement, with an idea that captures the forty billionth market - this is a great success. Hopefully, you don’t have any misconceptions that you will own the market alone (where there is money, there are competitors, and they will take away most of the market before you can break into it). But at the same time, the larger the market, the easier it is to find buyers.
')
Specialized markets such as sales of hardware, software development and / or delivery of correspondence will never become scanty - it all depends on how quickly and efficiently you penetrate them. The simple rule: more is better. If the market is big enough (and thanks to your idea you occupy a certain share on it), then you will probably attract the attention of a large company that wants to take your share to itself. This means that you will either be bought or will compete with you - the end result is possible thanks to the execution of your idea (and not to herself).
3) “Building a business around a new development tool” is wrong for many reasons. Some markets are not only niche - they live on free land. And I do not mean the United States - I mean the market where people are used to getting everything for free.
The software developer in me continues to come up with ideas for creating software development tools. Occupational disease, I suppose. I know this area and understand how to solve this or that problem. But be that as it may, development tools, in general, are a really bad area for finding good business ideas. Considering that things like Netbeans and Eclipse, the creation of which took thousands of man-hours, were given away in vain. The catch is that the developers have created their own culture of free distribution of software products. It is safe to say that there is nothing wrong with that, unless, of course, you are thinking of building a business on this.
With all this, there are niches inside the development tools that are even worse than others. Take two dollars, add to them the amazing idea of ​​a Java development tool that has ever been, and you can buy yourself only a cup of coffee. Java developers are especially used to getting development tools for free. In contrast, Microsoft has developed a culture among .NET and Windows developers who are used to paying for support. In other words, if you “must” create a developer tool that you intend to sell, stick to the market segment where there is Microsoft or some other, where payment is an idea that you agree with.
4) In essence, not all ideas have such a price as you think. Yes, I know you are smart. Yes, you are amazing, super duper creative. But in reality, there are very few ideas that are truly truly original.
Let two technologies (say, the Internet and mobile phones) develop independently of each other. And at some point in time a simple idea can act as a bridge uniting them. The product will be born. And the sooner you see this opportunity, the more brilliant your idea will be.
But with each passing day, the distance between these two technologies is reduced, and your brilliant idea becomes a little more obvious. In other words, if someone has not thought about this opportunity, it will soon begin. And the more people see it, the more chances there will be of someone who wants to start a company on this idea.
And the winner will be the one who first brings the product to the market, creates the marketing and marketing infrastructure and, in fact, ensures sales. Do not rely solely on the idea. Infrastructure must be created. If it does not exist, even if at a minimum level, the idea will be stolen (at least in the market sense). Definitely, you can create a world-class company with a good idea and a great infrastructure.
A small remark: as soon as progress reaches the point where these two technologies converge on their own (without your idea) - your idea is likely to be considered insignificant (hopefully, you will earn on it before this happens).
5) Competition is good . If you have no competition, you have no idea. Competition tells you, and investors, that your idea is not stupid. If you have been working on a product for 3 years already, and you do not have a single competitor, then maybe they know something about the day when you are going to put your product up for sale, which you do not know.
Do not be afraid to base an existing idea if you have an idea, which is the key difference. Altavista and Google made search engines. Altavista started developing long before Google appeared and probably laughed when they heard that some Goggle was going to hire them. I hate to say it, but the concept of “theft of ideas” in business is very difficult to define. Patents tried to give this concept legal force, but it works poorly (although you need them, of course), so it hardly matters.
Each of your ideas is an extension of an existing one (Each Web 2.0 idea assumes that the Internet exists. Each “mix” steals the functionality of 2 or more existing web services). How close your new idea is to the old one determines how many people will say that you stole it. And there will always be people who claim it.
As an example, I created Mailinator in July 2003. It was the first email service that allowed inboxes to create mailboxes. There are currently half a dozen similar sites (some even stole my FAQ section). Does it matter? Could I do something about what happened? Should I have tried to crush them?
The best tactic is to simply throw them out of the market and make new features. Protection of the idea is hardly possible, the ongoing work on improving the service, that is what is required. (And, by the way, the idea about Mailinator was not mine. This is Jack's idea).
1) Let the ideas ripen. Every new idea seems the most delightful of all the ideas that I have ever had. Usually it starts like this:
- Point of reference: the idea came
- A minute later: (some details)
- Two minutes later: I'm starting to think about a suit in which I will give a signal about the end of trading on the day of our IPO
After I began to admire too many ideas, I made a rule for myself. I reflect on the idea for three days, only after that I am voicing it. In the first and subsequent days I myself am not my own from excitement, but by the end of the third day I calm down. Or not, and I get the feeling that I really stumbled upon something worthwhile. Simply put, ideas always look better, while they are "piping hot." You are looking for ideas that seem different even as time passes.
2) Take into account the size of your market. If you read Guy Kawasaki's blog, then you probably saw him mentioning how often new companies brag about the huge size of their new market. Guy scolds them for being overly optimistic, but he also knows that it is better to believe that the market is indeed large (and it is possible to exaggerate its size in conversation), or forget about it. Numbers of hundreds of millions and billions are good - in fact, you are hoping to get at least a drop.
Consumer markets may be prohibitively large. If you are a guy from the basement, with an idea that captures the forty billionth market - this is a great success. Hopefully, you don’t have any misconceptions that you will own the market alone (where there is money, there are competitors, and they will take away most of the market before you can break into it). But at the same time, the larger the market, the easier it is to find buyers.
')
Specialized markets such as sales of hardware, software development and / or delivery of correspondence will never become scanty - it all depends on how quickly and efficiently you penetrate them. The simple rule: more is better. If the market is big enough (and thanks to your idea you occupy a certain share on it), then you will probably attract the attention of a large company that wants to take your share to itself. This means that you will either be bought or will compete with you - the end result is possible thanks to the execution of your idea (and not to herself).
3) “Building a business around a new development tool” is wrong for many reasons. Some markets are not only niche - they live on free land. And I do not mean the United States - I mean the market where people are used to getting everything for free.
The software developer in me continues to come up with ideas for creating software development tools. Occupational disease, I suppose. I know this area and understand how to solve this or that problem. But be that as it may, development tools, in general, are a really bad area for finding good business ideas. Considering that things like Netbeans and Eclipse, the creation of which took thousands of man-hours, were given away in vain. The catch is that the developers have created their own culture of free distribution of software products. It is safe to say that there is nothing wrong with that, unless, of course, you are thinking of building a business on this.
With all this, there are niches inside the development tools that are even worse than others. Take two dollars, add to them the amazing idea of ​​a Java development tool that has ever been, and you can buy yourself only a cup of coffee. Java developers are especially used to getting development tools for free. In contrast, Microsoft has developed a culture among .NET and Windows developers who are used to paying for support. In other words, if you “must” create a developer tool that you intend to sell, stick to the market segment where there is Microsoft or some other, where payment is an idea that you agree with.
4) In essence, not all ideas have such a price as you think. Yes, I know you are smart. Yes, you are amazing, super duper creative. But in reality, there are very few ideas that are truly truly original.
Let two technologies (say, the Internet and mobile phones) develop independently of each other. And at some point in time a simple idea can act as a bridge uniting them. The product will be born. And the sooner you see this opportunity, the more brilliant your idea will be.
But with each passing day, the distance between these two technologies is reduced, and your brilliant idea becomes a little more obvious. In other words, if someone has not thought about this opportunity, it will soon begin. And the more people see it, the more chances there will be of someone who wants to start a company on this idea.
And the winner will be the one who first brings the product to the market, creates the marketing and marketing infrastructure and, in fact, ensures sales. Do not rely solely on the idea. Infrastructure must be created. If it does not exist, even if at a minimum level, the idea will be stolen (at least in the market sense). Definitely, you can create a world-class company with a good idea and a great infrastructure.
A small remark: as soon as progress reaches the point where these two technologies converge on their own (without your idea) - your idea is likely to be considered insignificant (hopefully, you will earn on it before this happens).
5) Competition is good . If you have no competition, you have no idea. Competition tells you, and investors, that your idea is not stupid. If you have been working on a product for 3 years already, and you do not have a single competitor, then maybe they know something about the day when you are going to put your product up for sale, which you do not know.
Do not be afraid to base an existing idea if you have an idea, which is the key difference. Altavista and Google made search engines. Altavista started developing long before Google appeared and probably laughed when they heard that some Goggle was going to hire them. I hate to say it, but the concept of “theft of ideas” in business is very difficult to define. Patents tried to give this concept legal force, but it works poorly (although you need them, of course), so it hardly matters.
Each of your ideas is an extension of an existing one (Each Web 2.0 idea assumes that the Internet exists. Each “mix” steals the functionality of 2 or more existing web services). How close your new idea is to the old one determines how many people will say that you stole it. And there will always be people who claim it.
As an example, I created Mailinator in July 2003. It was the first email service that allowed inboxes to create mailboxes. There are currently half a dozen similar sites (some even stole my FAQ section). Does it matter? Could I do something about what happened? Should I have tried to crush them?
The best tactic is to simply throw them out of the market and make new features. Protection of the idea is hardly possible, the ongoing work on improving the service, that is what is required. (And, by the way, the idea about Mailinator was not mine. This is Jack's idea).
Source: https://habr.com/ru/post/296978/
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