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Answer by Yair Weinberger, founder of alooma.com:
There is no such thing as an “idea” for a startup, at least not in the sense that most people are thinking about it. At least not in business-to-business, but I suspect not in business-to-consumer either.
What was the “idea” behind Google, Salesforce, or Slack? We used IRC 20 years ago and HipChat two years ago, but the great product and great execution of Slack took the market amazingly fast.
It also does not matter. It’s very rare that after 12 months you’ll be doing the same thing anyway. In the words of LinkedIn co-founder Reid Hoffman: “Starting a company is like throwing yourself off the cliff and assembling an airplane on the way down.”
Great companies always find inefficiencies in the markets they operate in, and create products that fit snugly into the needs of the market. So if you want a great startup idea, here is how my team went about it. I think it’s a repeatable process. In my opinion, this method works best for creating a business-to-business software-as-a-service startup.
Find a market that excites you. Otherwise you’ll be bored to death when doing your market research. For me, this was the data integration market, but that is because I suffered for more than a decade from the inefficiencies in this market. For others, this may be boring as hell.
Research the heck out of this market. Spend three to six months doing your market research. Put a foot in the door of anyone who will open it for you, and learn from him or her. Try to diversify as much as you can in terms of company size and business vertical (unless you nail down something specific very early), but the best geographic place to do this research is probably the San Francisco Bay Area. If you live in another country, hop on a jet and eat ramen for three months, while you drive (or Uber Pool) up and down the 101 for meetings.
Understand what products they are using today, what works, what does not work, and what they wish would have worked. You should focus on understanding why certain products have been unsuccessful. This information can be difficult to extract, because people will often paint a picture that is brighter than reality. Try to put a monetary value on these problems (cost of x engineers, two times shorter sales cycle, etc.).
It may take you 10-15 meetings to nail the right persona, but at the 100th meeting you’ll have a very good understanding of the market and the “holes” in it. If you found a big hole, and you can put a plausible $1 billion or more number on it, you’ve got your “idea.”
This is the time to start building an MVP to take to market. The nice thing about doing thorough market research is that you may well find your first five real customers there. For example, you can say, “Remember when we talked about x? I have now started a company around that idea. Would you be interested in buying my MVP?”
Your “idea” will change over time, so don’t fall in love with it. The market shifts and changes under your feet, competition emerges, and you will understand much more about the market when you’re actually trying to sell something. Be laser focused, but listen carefully to your surroundings. Try to increase your focus as you progress. Solve a very specific problem, and do it amazingly well.
Tell your idea to as many people as you can. No one will steal it, and it does not matter even if he or she tries to. Execution is at least 99.99 percent of it.
Good luck! It’s a fun ride.
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