Tactical advice for finding your next startup idea
Before we founded Pilot, my cofounders and I thought long and hard about what we wanted to do next. I even created a happiness framework to help me decide where I wanted to spend my time. I also tried to distill down lessons learned from our previous ventures—some the easy way, and some the hard way—and came up with the following advice.
As a note, my background is in B2B startups, and this advice has that slant, but much of it is generally applicable.
Target a huge market
The bigger your market is, the more breathing room you will have. No product in the world captures 100% of the market. Depending on the industry, you might even be ecstatic to have 1% market share. As an example: Salesforce only has 20% market share—and they're an international behemoth that has been at it for 22 years.
Why this matters: if the market size for your business is in the many billions of dollars per year, capturing a few percent of it still yields a very big business. But if your market size is much smaller than that, you’re in trouble.
To make matters worse: targeting a small market is the only problem that is not fixable for a company. You can replace a CEO, you can alter a product roadmap, you can tweak a marketing message. But it is impossible to fix market size, so do the back-of-the-envelope math upfront and aim big.
Solve a hair-on-fire problem
Your product has to solve one of the top three biggest problems your customer is facing. If it’s a nice-to-have, it just won’t cut it. A dangerous trap awaits you here: if you’re solving problem #10 for someone, you’re in trouble. Sure, you’ll get good feedback from your customers—“yes, this is a problem that I have!”—but you’ll be sad and frustrated when no one buys your product, because they’re never going to get around to solving problem #10. (If I get through priorities #1 and #2 on a given day, I’m feeling really great about myself. I don’t think I’ve ever gotten to priority #5.)
Fortunately, there’s a cheat code: if you solve one of your own hair-on-fire problems and there are lots of people like you in the world, you’ll be in good shape. (This is actually how the idea for Pilot came about: we wanted to solve a problem we struggled with at our previous companies.)
Obey the 60-second rule
One of two things needs to be true about your product: your user either needs to be able to pick it up and start using it immediately with no training, or you ask your user to change their workflow but the benefit is visible in the first sixty seconds.
An example of the first option: You get behind the wheel of an electric car and start driving. It works just like the car you’re already used to—and it’s quieter and you can charge it at home.
An example of the second option: It’s 2010 and you’re upgrading from your BlackBerry to an iPhone (yes, this is a vintage example). You’re losing the keyboard you know and love, but you’re sold on the better web browser and all the apps, so you’re willing to endure the learning curve.
What you cannot do is ask people to change their workflow and not immediately present the payoff. There can be no delayed gratification. People are busy. They don’t want to spend time learning your product or doing things differently unless you show them clearly and quickly why their life will be better if they do.
If you’re solving an important problem for people, they should be willing to pay you for it. The price of your product is also a proxy for how valuable it is. Broadly, if your product is expensive it means that you’re solving a real problem for your users.
Separately, price matters much more than you might think. It affects everything about your business: how you position it, how you can market it, how you can sell it, how you can support it, etc. For example, if your product costs $5/month, you can’t afford to hire someone to pick up the phone and sell it—you have to sell it online in a self-service way, because the economics don’t support any other approach. But if your product is more expensive, you can still sell it online in a self-service way, but you can also employ a sales team, etc.
In short, when possible, it’s better to solve an expensive problem because it gives you more flexibility.
Fit into an existing budget
Your life will be easiest if your product is a better version of something people are already paying for. If you’re entering an existing market, people already know how to think about your product, and there’s already a line-item in their budget for solving the problem. You don’t have to convince people that your problem is worth solving—you simply have to convince them that your solution is better than whatever they’re using today.
If you’re creating a brand new category, you have three challenges: (1) you have to make your customer aware of the problem you’re solving, (2) you need to convince them to spend money to solve it, and (3) they need to convince their boss to give them money to solve it.
In fairness: if you can successfully create a brand new category, you can fully own it—that’s awesome and very value-creating. But it’s also super-hard; it’s much easier if there’s room in the budget for the thing you sell.
Pressure-test with customers
Searching for your next idea is a painful and challenging process—and truthfully, it’s one of the parts I’ve least enjoyed about starting a company. There are two things that make it especially painful: (1) it’s exhausting to just think of ideas for 8 hours a day, and (2) for every idea you come up with, it’s easy to come up with tons of reasons why it won’t work. (This is unfortunately true for both your good ideas and bad ideas.)
The best antidote I’ve found is: once you have a promising idea, get out there and pressure-test it with potential customers. The mere act of talking to other people about your idea will feel good, and you’ll learn a lot.
Just make the call
Here’s the thing: No matter how much work you do, your idea will never feel quite perfect—and that’s okay. At some point, you’ll just need to make the call and start building your company. If you’ve followed the advice above, you’ve got a good head start.
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