There's an unbelievable amount of advice and content online on finding the right startup idea. Unfortunately, I thought most of it was too noisy. We've been going through the ideation maze for a bit over a month, and here's some learnings, advice, frameworks, and resources on finding and validating the right idea.

Finding Ideas

Be comfortable with being uncomfortable

A close friend in college had the mantra of "seek discomfort". It may be depressing to be stuck in the ideation maze, but it's infinitely better than dedicating time to the wrong idea.

Fragmented, Low NPS Market

Keith Rabois (from Founders Fund) has a legendary tweet:

Formula for startup success: Find large highly fragmented industry w low NPS; vertically integrate a solution to simplify value product.

I like this quote because of its simplicity. In established markets, this is a good strategy, but it doesn't apply as nicely to emerging markets.

Insider vs. Outsider

Stephen Ango wrote a very insightful article on this topic that I recommend, but I'd like to highlight a specific portion:

Common wisdom encourages us to solve the problems we see in our immediate surroundings — in writing it’s distilled as “write what you know”, but it can be generalized as “do what you know”.
Without deep experience in a specific field, this approach rarely yields good problems to solve, usually for one or both of these reasons:
(1) The problem is very personal, it doesn’t help very many people (2) The gains to be made are small
...
Every complex system has problems. Most industries are complex and ripe for problem-finding. The challenge is knowing enough about the domain, yet retaining the beginner’s mind necessary to actually see the problem.

Simply, you're an insider if you're building in an area of deep expertise, and an outsider otherwise.

There's examples of both types of founders, but my general recommendation is to spend more time thinking about areas where you're an outsider.

Most great founding teams are highly technical and capable of building the product themselves. Because of that, the first idea they think of is an improvement on a product that they themselves have used. There's category-defining companies that have come out of this approach (Notion, Linear) but my opinion is that these markets are significantly more saturated, and the potential differentiators are far more limited.

Framework

Here's the steps you should work through, in order, when finding an idea:

Customers
Problems
Solution

There's a really great resource written by Erik, co-founder of Vanta, that I'd be happy to share over e-mail, but I'd like to quote him here:

When you skip steps, you bundle multiple assumptions together — you’re validating a problem, solution, and implementation all at once. If the probability of being right about one of those is 1% and you guess a problem, solution, and implementation — what’s the probability that you’re right about all three simultaneously?
Yeah, it’s 1%^3, or a one-in-a-million chance of success. If you take those problems in sequence, you can attempt each stage 100 times to expect success once for a total of 300 total attempts. That’s not only better, it’s the difference between a chance of success and deterministically setting yourself up to fail.

It may seem obvious, but the solution should never precede the problem. It's an easy trap to fall into, especially when you're constantly looking at other successful companies for inspiration.

We did this often, when we would think about "What about this AI product" or "Toast for Y vertical" and realize in customer interviews that their problems were totally different than the hypothetical ones we had imagined.

Validating Ideas

Can you work on this for 5-10 years?

In general, I don't think founders are fully honest with themselves when answering this question (us included, at first).

If your startup does well, you'll be working on this idea for the next 5-10 years of your life (at least). Even if the idea is something you'd be able to sell customers, talent, and investors on, at the end of the day you're the one who has to believe in the idea more than anyone else.

Wave Hunting and Why Now

Ayo of kunle.app has written a fantastic article on this topic:

If you’re optimizing for impact, choosing a material problem matters far more than your personal effort and your ability to execute.
...
This resonated as I thought of what didn’t work at my last startup and where we could have done better. We spent 4 years building an incredible amount of things and doing a (in my opinion) better than average job of micro-optimizations to make the product and business work. We read all the things, worked all the hours, spent all our savings and it still didn’t matter.
I think our biggest headwind was working on something that didn’t matter, in a domain that wasn’t growing in any macro sense.

Many investors will emphasize that there should be a "why now" for what you're building, but I prefer the "wave hunting" analogy.

First, is your TAM large enough? If it isn't, is it growing exponentially? If the answer is "no" to both of those questions, the hard truth is that you should find a different idea.

You want to have the strongest possible tailwinds possible when you're picking an idea. Since most startups fail, your job is maximizing your chance of success over all else. For some ideas, the "why now" won't be apparent until much later, but in general, I believe that all successful companies realize their "why now / wave" at some point.

Storytelling and Founder-Market Fit

My (perhaps contrarian) opinion is that story is the single greatest factor that determines whether a startup succeeds or fails. The story you tell is how you get investments, it's how you close candidates, and how you convince customers to use your solution over everything else in the market.

Most of the company story is built up over time, but having a strong founder-market story can exponentially increase your chance of success. (Startup success, like many things in life, is compounding – having a stronger story to start will itself compound over time).

What is the scale of your ambition? Or, is your idea actually insane?

There's a quote from the Arc program that really stuck with me:

As a founder, it's equally as difficult to make a restaurant successful as it is to make the next Tesla successful. The main difference is that no talented person wants to work at a restaurant.

What I took away from this is that it's harder to get funding, harder to attract talent, and strangely harder to succeed the less ambitious your idea is.

If the odds are already so stacked against you, and success is so improbable, why not shoot for the moon?

Finding and validating startup ideas