Rationalizing Startup Ideas
A common mindset I find myself in goes something like this:
“I have an idea, it seems like a pretty good idea logically, and I have done research and realize there is currently nothing out there like this. I think some more, and come to the conclusion that IF this idea was actually good and would work, it would already exist. There have been millions of other people in the same situation that came up with the same/similar idea that IF the idea was actually good, would have executed it and therefore it would exist. And if it didn’t exist, that implies that the idea was likely bad/flawed in a critical way I don’t currently understand.”
This mindset plagued my ideas for years, and I think I have found the solution to make it work logically. Of course this doesn’t always apply to every idea, and there must be some ideas that this doesn’t apply to. One way I have been able to rationalize it is to reduce the amount of “opportunities” others have had to come to the same conclusion.
There are two ways to “fix” this problem, the first being time and the second being domain expertise.
First, if timing is a significant factor, this drastically reduces the amount of opportunities others have had to come up with the same idea. New technological developments for example could create new opportunities no one could have foreseen, and those quick to understanding will come up with ideas that are new. Also, there is a scale limitation here. Say some new tech comes out that makes driverless cars very affordable, effective and desirable. You’re just some dude, so don’t put your focus on creating the best new driverless car. Doing this you compete for the big money, with multinational billion-dollar corporations. You will never win. You are best off attacking a small piece of the overall change, and dominating it. So with this example, maybe you run some analysis on which parking lots in cities will be unnecessary, and you jump in to buy them, and then can later sell them for a profit due to them being available for buildings. Or, say you develop a device for inside the car for entertainment purposes, and market it well, you can dominate this space. These I would rate as more medium sized ideas. Potential for quite large profit, but still possible for a small group of dedicated individuals. A strong group of experts in the area, with enough foresight, preparation, and execution could “win” in one of these new markets and take home big money.
That example also touches on the second point, domain expertise.
Not considering time, as an individual or small group you have no chance in nearly any significant area at competing with large companies. You cannot (probably) make the best new cell phone, TV, motorcycle, or surfboard. EVEN if you manage to make a really awesome product, you will at best be bought by a larger company or worse, get beat in the long run by economies of scale and cost. The only way for you to “win” is to create/provide something either so deep into a niche that there is a small market, OR compete on an intellectual level in something that you are a domain expert in. Realistically it will be a combination of a niche that you are a domain expert in. Again, in this scenario, you won’t become the next Apple or Google, but you could become a sizable company that dominates your niche. You won’t be Steve Jobs rich, but there is still potential to make more than you could ever need.
Obviously this whole strategy doesn’t always hold. Someone has to make the next Google and Tesla. But, I’m going to go ahead and assume that isn’t going to be you, or me, or anyone I know. My main purpose here is to just offer up a way to get around that original issue I had with my ideas. Consider the aspects of time and domain expertise when you evaluate your ideas, and if you are trying to come up with ideas, start looking in areas you are a domain expert AND consider the timeline of future events when you try to come up with them. This will increase the quality of your ideas, and it has certainly worked for me.