Thoughts on how to generate startup ideas, when you aren't scratching a personal itch.

1. GENERATING STARTUP IDEAS
For the MIT Entrepreneurship Education Forum
Dec 3, 2014
Giff Constable
www.neo.com
@giffco

2. 2
About Me
CEO of Neo (global innovation consulting firm)
6 startups, founder of 2, multiple exits
Author of Talking to Humans

3. “The way to get startup ideas is not to try to think
of startup ideas.”
− Paul Graham, Y Combinator
3

4. 4
What about when you need to come up with an
idea?

5. What is a good startup idea?
• It is rooted in a real human need
• You can see how it can become an impressive
business (even if no one else can)
• You are passionate about it
• You have some sort of advantage in solving it
• Is a mission, a north star, not a set of features
5

6. The paradox of startup ideas is that they are
simultaneously worthless and invaluable
6

7. Don’t be a slave to the idea
7

8. 8
What is a bad process?

9. “Find a wave and get in front of it”
9

10. What the VCs are chasing
10

11. 11
What is a good process?

12. First, know thyself
• A personal problem?
• A particular customer?
• A particular industry?
• A particular business model?
• A particular funding or exit profile?
• A lifestyle or a go-big-go-home business?
12

13. Second, go looking at an intersection
Domain Insight
Change Unmet Needs
13

14. Bring a cross-functional mindset
Domain Insight
Change Unmet Needs
14
BUSINESS
ENGINEERING DESIGN

15. Apply a classic VC filter: why you?
Problems you
want to solve*
Problems you
can solve
Problems you
have an
advantage in
solving
Problems you can
build a business
by solving
* I mean “willing to dedicate the next 5-10 years of your life solving” 15

16. 16
Let’s work via an example

17. My constraint, for this talk, will be a personal
challenge I have observed and feel close to.
I’m friends with working moms, and married to
one.
Can I make their lives better?
17

18. Instead of brainstorming in a room, I need to
gather domain insight.
Sometimes you can observe customers, but in this
case I need to talk to people.
18

19. 19
By talking to 15 working moms, I learn:
1. they are exhausted all the time
2. they feel guilty about not doing more for their children and their
work
3. they feel like they have no time to do anything well
4. they are both proud of themselves and jealous of the stay-at-home
moms
5. they compare themselves against stay-at-home moms, who can
go to ballet practice and cook dinner
6. they struggle to find time for their relationship with their partner

20. 20
The bottom two insights feel actionable:
1. they are exhausted all the time
2. they feel guilty about not doing more for their children and their
work
3. they feel like they have no time to do anything well
4. they are both proud of themselves and jealous of the stay-at-home
moms
5. they compare themselves against stay-at-home moms, who can
go to ballet practice and cook dinner
6. they struggle to find time for their relationship with their partner

21. 21
Instead of jumping to solutions, immerse yourself
deeper in the problem

22. 22
By talking to 10 working moms on having no time to cook:
• No one can cook dinner because neither they nor their spouse
can’t get home early enough
• Half of them don’t even like to cook
• Attempted solutions are fragmented: some get frozen dinners,
some get fresh packaged meals, some cook on the weekend in
prep for the week, and a few are trying new ingredient delivery
services that make it easy

23. 23
By talking to 10 working moms on having no time for partner:
• They struggle to find time for their relationships with their
partner, because date night has been so inconsistent that they
can’t keep a steady babysitter
• And they have struggled to find new babysitters that they trust,
because they aren’t comfortable with strangers
• And their friends hoard their babysitters so that they are
available when needed
• Current solutions are babysitter agencies (the cost is egregious)
or hitting up friends whose kids are now older (inconsistent)

24. 24
How to choose?

25. Questions you can ask
1. does it seem like a real problem?
2. does the addressable market seem large?
3. do current market incumbents feel vulnerable?
4. do I possess an unfair advantage in addressing the
problem?
5. am I more passionate about one versus another?
Note: these questions often require more research into the domain 25

26. In this case, we’re most passionate about solving
the relationship challenges for working moms
26
(our North star)

27. 27
Now you can brainstorm solutions

28. Four exercises
1. has something changed that is opening up new opportunities?
(technology advance, government regulation, consumer
behavior, market structure)
2. if you had to do one of the current market solutions 100x
cheaper, how would you?
3. if you had to do one of the current market solutions 10x better,
how would you?
4. are there analogs in other industries, with similar
characteristics, that you can learn from?
Credit to Shane Snow’s Smartcuts for the bottom three 28

29. Suspend the inner naysayer and question the
impossible
29

30. Let’s examine a few changes that might lead to
inspiration for our hard-working couples
30

31. Teenagers are now so over-scheduled that they
don’t have time for babysitting
31
1

32. This is an information hoarding / information
efficiency problem, and the Internet is solving
many of these kinds of problems through
crowdsourcing and the power of connected,
motivated humans
32
2

33. This is a “trustworthy supply” problem, and the
sharing economy is solving many supply problems
with things like AirBnB and Lyft
33
3

34. This is a need-it-when-you-need-it problem, and
mobile phones mean that participants now can
communicate effectively in real-time
34
4

35. AIRBNB FOR BABYSITTING!
Stay-at-home moms can earn extra cash by babysitting their friend’s
kids in the evening, allowing for those never-happen date nights.
35

36. Brilliant? Dumb?
The idea is really a question, and that’s where
lean startup comes in.
36

37. 37
In summary

38. 1. Know your constraints
2. Look at the intersection of domain insight, change
and unmet needs
3. Get into the market and learn
4. Filter for passion and unfair advantages, because it
will be a long road
38

39. An entrepreneur is “someone who solves
problems, making the world the way it ought to
be.”
− Sean Ammirati (Entrepreneur & VC)
39

40. For more on qualitative research, read Talking to Humans
THANK YOU
Giff Constable
giff@neo.com
giffconstable.com
@giffco

41. APPENDIX
41

42. On Domain Insight
• what is the structure of the market? (vendors,
customers, distributors, indirect competitors, business
models)
• how big is the addressable market?
• how has the market been evolving?
• what new pressures are the different players feeling?
42

43. On Unmet Needs / Customer Insight
• Observe customer behavior (get out of the building)
– focus on their goals (jobs to be done)
– what are they struggling with?
– how are they solving things today?
– study the fringes: power users, extreme users
– don’t speculate on solutions with the customer
– study analogs in different sectors with similar customer
dynamics
43

44. On Change
• technological / scientific
• societal
• governmental
• industry structure
• customer behavior
44

45. What is a bad startup idea?
• What VCs are chasing
• Something that is a feature, not a business
• Something that is only an incremental improvement over
market incumbents
• Something you don’t care enough about to commit years to
• Something you have no special insight into how to tackle
• Something you don’t have, and can’t get, the resources to
bring to market
45