The Worst Startup Idea
The Consequences of Valuing Idea Creation over Experience
Americans make more than one billion car trips every year. UPS and FedEx have a combined market cap of over $100 billion. Enter The People’s Parcel, the Airbnb for packages: ship stuff by collaboratively consuming automobile rides, and save the planet.
I heard this pitch as a judge at a startup competition. There are many reasons I disliked the idea. Here are three:
(1) There are huge—almost certainly insurmountable—logistical issues in picking up and dropping off (not to mention transferring) packages.
(2) This is an awesome service…for transporting drugs. It’s decentralized, essentially impossible for anyone to regulate package contents, and certain to be shut down by the authorities.
(3) The usual “collaborative consumption” story (e.g. Airbnb) is that technology is enabling peer-to-peer transactions at a similar level of efficiency as B2C transactions. In other words, using Airbnb to book a someone’s house is roughly as efficient as booking a hotel room. The People’s Parcel is significantly less efficient than UPS or FedEx because of the need to implement extremely complicated logistics (essentially on a per-trip/per-user level).
If any of the “founders” pitching The People’s Parcel had any experience in shipping packages (or anything like it), I doubt they would have spent more than 20 minutes on it before throwing the idea out. However, this was Startup Weekend, yet another institution in a long line of new institutions designed to encourage everyone—especially the young and inexperienced—to try their hand at creating a company, and going through the steps to validate the business idea.
As a pedagogical tool, Startup Weekend is fantastic. It’s fun, it’s collaborative, and it’s hard not to learn something about starting a business. But as a cultural movement, from Y Combinator through Startup Weekend, it has a darker side. As we move the typical high-achiever model of aspiration from “work for a large, established business and climb the ladder” to “create your own business before you leave college” (where the “ladder” is YC, then VC funding, then exit), we skip entirely over the value of working for large, established companies before you create your own.
The best startup pitch from that competition—in my opinion—was a meal-planning service (like The Fresh 20) for body builders, created by a body builder (who saw the need and how it needed to be done). In fact, I could divide the good pitches from the bad pitches in that competition simply by asking, “does at least one of the founders have actual, significant experience in the space?”
And it’s amazing to me that even when recent graduates are wondering whether they should work for established companies or startups, the only “established companies” they seem to consider are technology companies (Google, Facebook). If you want to come up with awesome, fundable ideas, go work for large companies with deep pockets that have old and archaic processes and few highly-technical and dynamic problem solvers. Identify the inefficiencies, make friends with decision makers, and then leave, build your solution, and sell it back to them. (Even better, get the company to invest in your new startup).
To quote Mr. Lebowski: “My advice is to do what your parents did; get a job, sir.”
