Nov 17, 2022 · 32m · y-combinator
How to Get and Evaluate Startup Ideas | Startup School · Y Combinator
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In this Y Combinator Startup School lecture, Group Partner Jared Friedman presents a structured guide on evaluating and generating high-potential startup ideas while avoiding common founder traps. Through real-world YC case studies and actionable ideation frameworks, he outlines how entrepreneurs can find scalable, real-world problems worth solving.
Statements from this episode (14)
Broad societal problems are too abstract to be good startup starting points
“No doubt those are real problems, but they're too abstract to make good starting points for startup You need something that's more specific, something that's tractable with a startup.”
Tarpit ideas seem deceptively easy but conceal hidden structural barriers
“They all form around some, like, widespread problem that lots of potential founders encounter. And it's a problem that seems like it could be easily solved with a startup, but it's an illusion. There's actually a structural reason why it's very hard or impossi…”
No founder in 20 years of YC built a successful friend-meetup app
“Well, it turns out that there are some structural reasons why this idea is hard, which is why in, like, 20 years of people applying to YC with this idea, nobody has actually pulled it off.”
Founder-market fit is the single most important criterion for evaluating startups
“If I had to pick like one most important criteria, it'd probably be this one. And what I mean by founder market fit is just, are you the right team to be working on this idea?”
Before Brex, banks strictly refused to issue corporate credit cards to startups
“And before Brax, if a startup NYC wanted a corporate credit card, they literally could not get one because no bank would give a credit card to a startup.”
The best startup problems are those where the customer alternative is nothing
“Like if you're, if the alternative to your solution is literally nothing, that's what a good problem looks like.”
Founders develop passion for boring industries once the business actually succeeds
“Often an idea grows on founders over time as it starts to work. As I'm going to talk about in a moment, a lot of the best startup ideas are in boring spaces like tax accounting software or something like that, like no one is particularly passionate about, like…”
Fintech and vertical SaaS have drastically higher unicorn hit rates than consumer
“Over the last 10 years, if you started a company that did, like, fintech infrastructure or vertical SaaS for enterprise, the probability that your company became a billion-dollar company was astonishingly high. Whereas if you started something in consumer hard…”
Boring startup ideas have a much higher success rate than fun ideas
“And the thing is that because most founders shy away from ideas like this, boring ideas like payroll software have a much higher hit rate than fun ideas like apps to find new restaurants to eat at, Or, like, apps to find the next song to listen to. Something l…”
Most good startup ideas have existing competitors, proving market demand exists
“Counterintuitively, most startup ideas, most good startup ideas have existing competitors. When founders go into spaces with no existing competitors, they often find out that the reason that there are no competitors is because no one wants the product.”
Dropbox had approximately 20 cloud storage competitors when it initially launched
“So when Dropbox launched, there were already about 20 cloud-based file storage companies. Dropbox was like the 20th company in its space to launch.”
Over 70% of the top 100 YC companies generated their ideas organically
“If you look at the YC top 100 companies, at least 70% of them had their startup ideas organically, rather than by, like, sitting down and explicitly trying to think of a startup idea.”
Replit originally started as an interesting side project, not a business
“This is exactly how Replik got started. It was just something that Amjad found interesting. It wasn't supposed to be a startup originally.”
Many YC applicants pitch ideas completely unrelated to their actual domain expertise
“It is weird how many startups apply to YC and we look at their applications and the founders like are actually legitimate experts in something, but the idea that they're applying with is like something completely different.”