How to Find a Startup Idea: Learning to Spot a Good One

In 1883, in the small Illinois town of Shelbyville, Josephine Cochrane was widowed. Her husband left her 1,535.59 dollars and a fair amount of debt. And one problem she couldn't get out of her head.

The problem had begun years earlier, after a dinner party. As the story goes, her family heirloom china was getting chipped as the servants washed it. Cochrane looked for a better way. When she couldn't find one, she decided to build it herself.

In the shed behind her house, she worked with a young mechanic named George Butters. First she measured the dishes one by one. She made separate wire compartments for plates, cups and saucers. She fitted the compartments onto a wheel lying flat inside a copper boiler. As the wheel turned, hot soapy water sprayed up from below and rained down on the dishes. There was no brush; water pressure did the work. The patent came through on 28 December 1886, number 355,139.

Then came the unexpected part. She couldn't sell the machine to householders like herself. It cost between 75 and 100 dollars, and most homes didn't have as much hot water as it needed. The turning point was the 1893 Chicago World's Fair. Nine machines were installed in the fair's restaurants and pavilions, and orders followed from hotels and restaurants. The dishwasher wouldn't spread into homes until the 1950s.

Cochrane's idea didn't come from a flash of inspiration but from an ordinary problem she saw every evening. And it didn't stay where it started: the machine she designed for herself became the machine for hotels.

How do you find a startup idea?

Y Combinator partner Jared Friedman tackles exactly this question in a talk recorded for Startup School 2020. His starting point is surprisingly simple: finding a startup idea isn't hard, because the world is full of real, unsolved problems. The hard part is learning to notice them.

Four common mistakes

According to Friedman, the first mistake is waiting for a brilliant idea before you start. When Google was founded it was roughly the twentieth search engine, and Facebook was the twentieth social network. What made them big wasn't a brilliant first idea but a good-enough idea executed extremely well.

The second mistake is the opposite: jumping on the first idea that comes to mind. For a business you'll give years of your life to, spending a few weeks thinking first isn't too much. Treat the idea as a starting point. In its early days, Airbnb too was a site for renting out air mattresses in other people's homes.

The third mistake is starting from a solution rather than a problem. "Uber for plumbers" is a solution, but it's unclear what problem it solves. At YC they call this a "solution in search of a problem", and these ideas often never find one. The fourth mistake is believing that finding ideas is hard.

Weigh the idea with four questions

Friedman suggests a simple scoring method adapted from his colleague Dalton Caldwell. How big could the idea get? Are the founders experts in this space? How sure are you that the problem you're solving is real? Do you have a new insight that others don't see?

His examples read like answers to these questions. Flexport founder Ryan Petersen had worked in international trade for ten years before starting the company. Airbnb's founders had tried hosting strangers they met online in their own home and found that what everyone thought was dangerous was actually enjoyable.

Switch off the hidden filters

The sneakiest trap is the filters that weed out good ideas before you're even aware of them. Jobs that look like a hassle top the list; Paul Graham calls this "schlep blindness". In Friedman's example, thousands of programmers knew what a pain it was to take card payments online. But dealing with banks and learning card infrastructure scared them off, so none of them built Stripe.

Boring areas get quietly filtered out too. Gusto came out of payroll software, which everyone found terrible but nobody touched. Washing dishes was at least as boring as payroll. Avoiding markets with competitors is another filter: a market with no competitors usually has a reason, and often it's that nobody wants the product. Dropbox entered a market with dozens of file-syncing products, armed with a better one.

Learn to notice ideas

Friedman says the best ideas are found not by sitting down and thinking but by noticing. Once you know what a good idea looks like, you start seeing them everywhere. Working at the cutting edge of a field, especially at another startup, sharpens that eye fast.

Still, if you want to sit down and generate ideas, the three strongest of the seven recipes he lists are these. The first is to start from what your team is especially good at; roughly half of YC's most successful companies came this way. At every company you've worked for, what did you learn that others don't know, and what looked broken? Lattice's founders started from how bad the performance review software was at the company where they worked together.

The second is something you wish someone would build for you. When DoorDash's founders couldn't find a way to get Thai food delivered in the suburbs, they built that way themselves. Cochrane's shed was the nineteenth-century version of this recipe. The third is to look at what has changed in the world recently: when the iPad came out, PlanGrid moved construction plans from paper to tablets.

Seeing and thinking

The English word "idea" comes, via Latin, from the Greek "idea". According to Wiktionary, its earliest meanings were form and appearance; at its root is the verb "idein", "to see". Go further back and you reach the Indo-European root weyd-, again meaning to see. Latin "videre" and Sanskrit "veda", meaning knowledge, belong to the same family. For the Greeks, an idea was first something seen.

The Turkish word "fikir" (idea), on the other hand, comes from the Arabic "fikr": to think, to mull something over. "Tefekkür" (contemplation) shares the same root. One describes the eye, the other the mind. A good startup idea needs both: first to see a problem, as Cochrane did, then to think about it for a few weeks, as Friedman suggests.

With other eyes

In La Prisonnière (The Prisoner), published in 1923, Marcel Proust writes this while describing what art gives us:

"Le seul véritable voyage, le seul bain de Jouvence, ce ne serait pas d'aller vers de nouveaux paysages, mais d'avoir d'autres yeux..."

The only true voyage, the only fountain of youth, would be not to visit new landscapes but to have other eyes.

Cochrane's china was no different from china that had been chipped in the wash for centuries. What was different was the eye looking at it. Which problem that you see every day, and no longer notice, could be your idea?

Once you've found your idea, read How to Run a Customer Interview to test whether the problem is real.