A Bunch of ‘Stupid’ Startup Ideas That Made Billions
A lot of people look at the startups like Instagram or Facebook and say “I want to build a company like that. All I need is a really good idea.”
After all the conventional wisdom is that with a smart idea making billions is just matter of details. Here is a bunch of ‘stupid’ ideas that made billions:
1. Snapchat
When Evan Spiegel stood up in a Stanford product design class to present an idea for his final project, he explained a mobile app where friends could share photos that would disappear, forever, in a matter of seconds.
“Everyone said, ‘That is a terrible idea,’” Spiegel remembers. “Not only is nobody going to use it, they said, but the only people who do, will use it for sexting.” A venture capitalist sitting in on the class said it could be interesting, if he made the photos permanent and partnered with Best Buy.” (source)
Everyone said, ‘That is a terrible idea.’
2. Apple
On April Fool’s Day of 1976, Jobs and Wozniak formed Apple Computer Inc. Wozniak designed what was going to be Apple 1.
Because he was a proud HP employee and loved the company, he believed the product rightfully belongs to his employer as he signed a document stating everything he designs belongs to HP.
So he approached his managers with a proposal to manufacture it…5 times.
According to Wozniak, he “begged HP to make Apple I.” “Five times they turned me down,” he said.
“I begged Hewlett-Packard to make the Apple I. Five times they turned me down.”
3. Airbnb
Renting airbeds in your living room to random people and serving them breakfast sounds like the kind of idea you should be secretive about or everyone will instantly recognize the potential, deploy it and watch it turn into billion dollar business right?
It turns out AirBnb founders told it everybody and everybody thought it’s a dumb idea.
Friends of founders, all investors, including those who invested in in and even founders themselves.
According to Brian Chesky “we thought this idea wasn’t going to work was the moment we came up with it”. The only investor who gave AirBnB a chance was Paul Graham who said:
“We thought Airbnb was a bad idea. We funded it because we really liked the founders.”
4. Space X
An internet entrepreneur starting a company that builds rockets on a premise of: if NASA can launch a rocket for $100 million, we can do it for $50 million?
What a sound idea. Surely, I wouldn’t tell this one to anyone, it’s so obvious it’s going to work.
However, not everyone thought about it this way. Well in fact nobody did, not even the founder of it.
According to Elon Musk himself:
“In fact, when I started SpaceX, I thought that the most likely outcome was failure. And I think to have any other expectation would have been irrational.”
5. Google
When Google started there were some 20 search engines everyone was already using.
Three years after the breakup of Soviet Union even Russia had a search engine.
Google was so late to the market they were practically irrelevant. And that wasn’t all — most of the existing search engines were so commercially unsuccessful that everyone categorized them as money losers.
As for Google, the only difference was that they stripped down all the content from their homepage.
At that particular time the idea was so bad that when Larry Page offered to sell Google to Excite for $750,000, Excite didn’t even want it.
6. Facebook
In one of his essays, Paul Graham recalls “One of my most valuable memories is how lame Facebook sounded to me when I first heard about it. A site for college students to waste time?”
When Facebook started there were already Friendster and Myspace. Before them there were number of social networking sites most of which failed.
Social networking was a fad, there were sites like Facebook popping out everywhere around the world. It was probably the least original idea of all at the time — and their focus was Harvard alone.
Now think about it, what sort of business it is, if the total market is 20k students and the website is for free and makes no money? Seriously, by definition that’s not even a business.
7. PayPal
Making real money payments with an insecure AOL or Yahoo email address?
Well, why not after all the company is not even a bank and it’s run by bunch 20 year old guys — who wouldn’t be happy to trust them with their money?
It turns out the team at paypal has already failed four times with other ideas.
Wait, are stupid ideas better than “smart ideas”?
Y Combinator is famous for having invested in startups like AirBnB, Dropbox, Reddit or Stripe.
The founder Paul Graham describes their funding process as “black swan farming.” This strategy is best illustrated by a venn diagram presented by Peter Thiel (founder of Paypal and investor in Facebook, Tesla and SpaceX):
According to Graham, startup investing is hard for two reasons:
- that effectively all the returns are concentrated in a few big winners, and
2. that the best ideas look initially like bad ideas.
The founder of 500 startups, Dave McClure goes beyond and argues he doesn’t care about black swans but focuses on grooming the ugly ducklings.
All of this is quite counter-intuitive, especially if you consider that most people think it’s all about the “great idea.”
The magic of just doing something.
Many of our potential clients at Appster have been waiting for ages for “that great idea.”
If you think of startups like Paypal — they had fived ideas that failed but they executed every one of them.
Instagram started as Burnbn — a foursquare knockoff. Pinterest began as an ecommerce startup and Youtube as a dating site. AirBnB sold cereals. Steve Jobs and Woz hacked phones for money before officially founding Apple.
It’s becoming a cliché to repeat this, but it’s really all about the execution.
Google seemed like a fail but it took them few years to build AdSense that made them successful and it wasn’t even their idea.
Mark Zuckerberg did some great execution in gradually penetrating the market and maintaining growth higher than all other social networks. He also managed his board well and got best people to work with him.
AirBnB relaunched three times until getting it right and Paypal failed four times but they hung in there.
The history and all the most successful startups above prove us once again that all we need isn’t really just a good idea.
Instead, we need to show up and keep executing. We need to keep just doing something no matter how challenging it gets at times.
As Chuck Close puts is perfectly:
“Inspiration is for amateurs — the rest of us just show up and get to work.”
//
Thanks for reading!
If you enjoyed this article, feel free to hit that heart button below ❤ to help others find it!
