Unveiling RDI: How ideas for impactful startups are discovered

Our investments are driven by a singular thesis: The Super Evolution. And lately, the convergence of compute, engineering, and data has sped up at an unprecedented rate. The rapid progress we’ve witnessed in Foundation Models is accelerating this work even further, at a clip even the industry itself can barely predict. The Super Evolution is here, and with it, our conviction in our work has only grown.

This year we’re expecting an even greater accelerated rate of innovation thanks to added geopolitical and economic pressure. The Fed is predicting a recession (history has shown that recessions drive the most audacious changemakers to tackle the biggest challenges), the war in Ukraine has renewed focus on the necessary energy transition, and tensions with China have led to a re-focus on critical technology and infrastructure. Young talent is witnessing this upheaval and searching for mission-driven companies looking to tackle these challenges head-on. There’s a refocus on solving core problems, and bold ideas and even bolder founders emerge.

And it’s these bold and talented founders who make the Super Evolution a reality. We want to help you become one of them. That’s why today we’re unveiling the exact process that many of these entrepreneurs (and entrepreneur hopefuls) employed to pinpoint their brilliant business opportunities.

We’re calling this process Research Driven Ideation (RDI). It’s a framework you will use to research, map, and unearth brilliant ideas. The first steps are available now for current and future entrepreneurs looking to find their inspiration.

RDI is how winning ideas are determined

Think of it this way: the speed of innovation is increasing. And as it does, more entrepreneurs will be experimenting, iterating, and driving the progress needed for a better world. And even more brilliant scientists and technologists will be looking to contribute to our world in some form or fashion — even if they aren’t sure about exactly where to start.

So, where do current and future founders get the ideas for their companies? Well, there is no “lightbulb moment.” Rarely is there even a sudden “flash of inspiration.” These ideas are cultivated through a specific and exacting process (RDI). The RDI process teaches entrepreneurs how to deeply research an industry, dive into a problem, and determine an idea.

This exact methodology was pioneered and tested by two Innovation Endeavors partners, Scott Brady and Harpi Singh (in partnership with Dave Leeds and Eric Botto). They used RDI to determine their first company idea, which catalyzed a business plan which became the company known as FiberTower, which was acquired by AT&T. This process was so unique that it was documented and turned into a hallmark case study, ProjectSHED, which is still taught at Stanford today.

Over the past two years, RDI has been taught to hundreds of Stanford GSB students (this process has now been added to the Stanford GSB curriculum), along with students at Berkeley, MIT, and Harvard. RDI allowed us to meet and incubate incredible founders, and help them build businesses we’re proud to invest in, including Skylo, Afresh, Aro Homes, and ClearMetal. RDI has been academically tested by some of the brightest minds in their field, proven by founders, and for the first time, we are thrilled to provide this framework to our broader community.

So, what is RDI?

Curious thinkers use RDI to obtain a complete picture of an industry or space through detailed interviews with industry experts and data analysis. This work often leads to unique insights often missed by those too deeply entrenched in a problem to “see” a fresh solution. Those who follow the RDI process stand on the shoulders of thought leaders, stakeholders, and experts in order to see patterns, identify gaps, and understand the big, impactful, non-obvious problems of an industry — and the current and future opportunities surrounding them.

Mastering the RDI process is a powerful skill that will be invaluable regardless of the path taken, and the outcome of the process is what you make it. Those who have completed RDI have gone on to found venture-backed startups (like the incredible companies we mentioned above), land coveted roles in both the industries they explored or adjacent ones and elevate their professional profiles.

RDI is just the beginning

RDI is not venture creation or fundraising, although it will lead to opportunities that will undoubtedly entice investors and connect you with potential customers. It’s not company building or team building beyond your initial research partners, yet it will most definitely lead to a network ripe with mentors, advisors, co-founders, and early employees. It’s not a problem-solving or product-creation exercise, but it will truly enable the uncovering of core problems that need to be solved and critical products that could be developed.

RDI is the journey’s beginning, not the end, and it is a powerful prerequisite that involves three key phases.

Phase 1: team formation and alignment

Phase 1 is all about creating a solid foundation. This phase focuses on selecting your research partners, defining success, and plotting your course. Phase 1 is the time to voice and align on your motivations, goals and objectives, and to set your expectations for the journey ahead.

By the end of this phase, you will have created an opportunity rubric that outlines the ideal criteria, must-haves, and show-stoppers for any potential industry. A rubric is a valuable tool, but much of the value lies in the reflection, discussions, and prioritization involved in its creation.

Phase 2: bench-level analysis

Phase 2 is about ramping up and getting “smart” and organized. An initial focus area or space is selected. This will be your “haystack” to explore. This period is an opportunity to create an industry primer that will become the basis for future work. At the end of Phase 2, you should understand your space reasonably well and be “cocktail party conversational.” You should have a solid market hypothesis, a map of the space with an initial set of interview targets, and a set of preliminary questions with areas to explore.

Phase 2 is the time to create structures, set a schedule and cadence, select tools and processes, and outline targets, timelines, and milestones. The more these items can be ironed out in the early days, the smoother the subsequent phases will go, so you can be as efficient with your time as possible.

We want to support passionate innovators looking to start their RDI journey. All materials required to complete RDI are available now for those who are curious and interested in having a deep understanding of an industry and market.

The materials in the initial phases will guide you through the beginning of the process and help you organize your research, set team goals and direction, and create your primer. You must complete the research required in Phases 1 and 2 in order to access and embark on Phase 3. Phases 1 and 2 lay a solid foundation for this work, and the remainder of your research won’t make sense without it!

Phase 3: research, synthesis, and evaluation

Phase 3 is where the rubber meets the road and is the core of RDI. This phase is all about curiosity-driven conversations with people who live, breathe, and shape the area of interest. It is an iterative hands-on phase of outreach, interviewing, information capture, synthesis, and evaluation.

In addition to gathering knowledge and ideas, each cycle will lead to additional contacts, more effective questions, and more refined hypotheses. Capturing any ideas that spin out of this phase is essential, it is equally important to resist the urge to latch on to the early problems or insights and dive too deeply down the first rabbit hole you find. Instead of chasing every new idea or potential opportunity, you should capture them and evaluate them systematically as your research progresses.

While Phase 3 involves initial high-level conversations and exploration, it also allows you to dive deeply into focused sub-categories of your work and to test specific hypotheses. Efforts are focused on disproving hypotheses and discarding ideas that no longer serve you and, conversely, building confidence in the ideas that remain. At the end of this phase, you will be an expert in your space from top to bottom. You will know the problems and opportunities facing the industry today and will be able to predict the problems and opportunities of tomorrow. Where you go from here is up to you, but the options will be numerous.

As we said previously, it’s the founders we work with who truly make the Super Evolution a reality. Our hope is that through RDI, we can democratize the ideation process and make it a little easier for founders to solve problems that matter. We need more teams driving the Super Evolution. We need more innovation and fresh ideas. We know this works.

An important note: this content could not be shared if it weren’t for the work of Stanford GSB alumni, Brett Jordan. Brett is an RDI mentor and devotee of the process himself. He spent countless hours over the course of a year building and cataloging this material, mapping out a clear process, meeting with former RDI teams, refining tactics, collecting best practices, and writing all of the material we have shared with you. Thank you, Brett!

Think you already have a winning idea within climate, the physical economy, intelligent software, computing infrastructure, or engineering biology? Reach out. We’d love to hear more.