Startup Ideas and 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 picking
a good one
through validation

It’s based on
the book,
Hello,
Startup
hello-startup.net

I’m
Yevgeniy
Brikman
ybrikman.com

Founder
of
Atomic
Squirrel
atomic-squirrel.net

1. Inspiration
2. Knowledge
3. Environment
4. Problem
5. Market
6. MVP
Outline

Is it from a
flash of insight?

Thomas Edison and a light bulb

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

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

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 is
a remix of
other books

Ideas are connections between the
knowledge in your mind

The more you know, the more
connections are possible

To form connects, you need
the right environment

Throughout history, we often
see multiple discovery

Calculus: Isaac Newton and
Gottfried Wilhelm von Leibniz

Evolution: Charles Darwin and
Alfred Russel Wallace

Telephone: Elisha Gray and
Alexander Graham Bell

“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 journal
2. Get away from work
3. Add constraints
4. Live in the future
5. Look for pain
6. 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.

First, work intensely to load the
problem into your mind.

Einstein had his best ideas during
violin breaks.

Some people get ideas in the
shower. I get mine on walks.

Try this exercise from Made to
Stick:

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.

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

“Live in the future, then
build what’s missing.”
– Paul Graham

But how exactly do you
live in the future?

At Xerox PARC, they used to
play the Wayne Gretzky Game

“Skate to where the puck
is going to be, not where
it has been.”
– Wayne Gretzky

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

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)

“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

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 whys
3. 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

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?
”

The famous question from
Sequoia Capital: Why now?

Why not 2 years ago? 2 years from
now? What changed?

You found a real problem. Should
you be the one to solve it?

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

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 competitors
2. Use ad-targeting tools
3. Find a community
4. Do some good-old research

Competitors are a form of
validation too.

Tools to research competitors:
1. Web analytics
Quantcast, Moz, Comscore, Alexa, SimilarWeb
2. Mobile analytics
App Annie, Apptopia, Xyo, Apptweak
3. Social analytics
Fanpage Karma, SpyFu, Google Trends, Twitonomy
4. Funding
CrunchBase, AngelList, Owler, Kickstarter

Use ad-targeting tools to
explore market demographics

Ad-targeting tools:
1. Google Keyword Planner
2. Facebook Ads
3. LinkedIn Ads
4. Twitter Ads

There may already be a
community for your product

Community tools:
1. Meetup.com
2. Lanyrd
3. Subreddits
4. Quora topics
5. LinkedIn Groups

Research tools:
1. Newspapers, books, journals
2. Government reports, SEC filings
3. Google
4. Google Trends
5. World Bank Data
6. AYTM Surveys
7. Nielson Research

If the market is big enough, the
next validation step is the MVP

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.

The smallest experiment does have
to be viable

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

Light bulb (blue): Serge Saint
Light bulbs (many): Andrew Moore
Thomas Edison with bulb: Wikimedia
Isaac Newton: Wikimedia
Archimedes: Wikimedia
Thomas Edison: Louis Bachrach
Potted plant: Craig Sunter
Windows: Wikimedia
Mac OS: Wikimedia
Xerox Alto: DigiBarn
NLS Computer: Mother of All Demos
Journey: Wikimedia
Elton John: Wikimedia
Beatles: Wikimedia
Lady Gaga: Wikimedia
Information vs knowledge: gapingvoid
Everything is a Remix: Kirby Ferguson
Copy, transform, combine: Kirby Ferguson
Gottfried Wilhelm von Leibniz: Wikimedia
Isaac Newton: Wikimedia
Alfred Russel Wallace: Wikimedia
Charles Darwin: Wikimedia
Elisha Gray: Wikimedia
Alexander Graham Bell: Wikimedia
Henry Ford: Wikimedia
Moleskine: Barn Images
Linus Pauling: Wikimedia
Glasses: Matheus Almeida
Walk in the park: Brian Smithson
Barbed wire: Alexandre Dulaunoy
Wayne Gretzky Game: Alan Kay
Blueprint: Will Scullin
References & image credits, part 1

References & image credits, part 2
Egg: Kate Ter Haar
Meeting: Simon Blackley
Steve Blank: Wikimedia
Death Valley: 白士李
Men shaking hands: Didriks
Toothpaste: William Warby
Colgate aisle: Fredrik Rubensson
Crest Pro Health: m01229
Listerine: Mike Mozart
Crowd: Scott Cresswell
Arm wrestling: U.S. Army Europe Images
Community: Kat
Clock: Earls37a
Evan Williams: Wikimedia
MVP car: Henrik Kniberg
Wayne Gretzky: Wikimedia
Paul Graham: Wikimedia
Lab experiment: UCL
Dean Simonton: UC Davis
Google Analytics: Blue Fountain Media
Coffee cup: OiMax
Truck: darkday
Report: Juhan Sonin

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