6 ms·

You Dont Need a Good Idea To Start a Great Company

105 points by eladgil 16y ago

Charuru 16y ago
It's true some successful company are the results of serious pivots. But I bet some 80% of them are the result of an initial good idea. IMO you shouldn't build a company from a bad idea, but you can in your spare time try to validate an idea you're uncertain about. But don't quit your job at Google.
- eladgil 16y ago
  Support from Fred Wilson's blog that most of his successful outcomes (success defined as "exit) were pivots: "Of the 26 companies that I consider realized or effectively realized in my personal track record, 17 of them made complete transformations or partial transformations of their businesses between the time we invested and the time we sold. That means there a 2/3 chance you’ll have to significantly reinvent your business between the time you take a venture capital investment and when you exit your business." Source: http://unionsquareventures.com/2007/11/why-early-stage.php http://unionsquareventures.com/2007/11/why-early-stage.php
  - eladgil 16y ago
    More from the same blog post by Fred Wilson on his investments: "Here’s an interesting breakdown of the “transformers” versus the “stick to our plan” investments in my personal track record. Greater than 5x – 11 total investments – 7 transformed, 4 did not 1x to 5x – 10 total investments – 6 transformed, 4 did not Failures – 5 total investments, 1 transformed, 4 did not Unrealized Union Square investments – 6 total, 3 transformed, 3 have not"
  - Charuru 16y ago
    Are you sure we're talking about the same "transformation"? Also that 17 lumps major and minor transformations together... For example if someone starts a dating site but later transforms into a general social network, I would call that a complete transformation. However if you start out making a ruby IDE but later realizes that real money is in MMORPGs or whatever, well you might have as well as waited.
    - dinedal 16y ago
      Does it matter? I think the point is that (Great People) + (Profitable Idea) = (Success) Consider: The variant of (Poor People) + (Profitable Idea) = (50/50 Success) and the variant of (Great People) + (Unprofitable Idea) = (Failure). If (Great People) it is far easier to get (Profitable Idea) then to change (Poor People) to (Great People). To use your example, if you're making a Ruby IDE and no one pays you, you will never be profitable. If you make a Greate Ruby IDE and no one pays you, you will never be profitable. Discovering that MMORPG's are more profitable one day, you build one, and people pay you, you might be profitable. You could consider the time you spent on your Ruby IDE a waste, or you could consider that you've learned something about software development as a business. It is far easier to change the idea then the people.
      - Charuru 16y ago
        But that's implying that working at Google won't be as rewarding. There's a lot of pressure to execute and iterate and so on when you're doing a startup. People sometimes forget to sit down and relax. Being in a less risky, less stressful position at Google can give you the important insights you need when you really start your business. I also submit that it'll be easier to quit Google when you've discovered your home run idea than to change your entire business.
        harryh 16y ago
        "Being in a less risky, less stressful position at Google can give you the important insights you need when you really start your business." You could not be more wrong on this point. Being at google is a recipe for complacency. Quitting your job is incentive to actually figure out how to build something good. Because it's do that or fail.
        Psyonic 16y ago
        If this is so, why are there so many startups started by ex-Googlers?
- riffer 16y ago
  It's true some successful company are the results of serious pivots. But I bet some 80% of them are the result of an initial good idea. The successful ones that are a result of an initial good idea are a strict subset of the ones that choose a promising market.
revorad 16y ago
If you're going to talk of great companies, you can't leave out the two juggernauts of our time. Neither Google nor Facebook started as a company. Both search and social networks were written off as markets when the two current leaders entered the space. I don't want to invoke another semantic wrestling championship between execution and ideas, but you have to give credit to Facebook for realising that social networks are not just about dating. It was their idea of exactly replicating offline social relationships on the web, executed to near perfection that made them successful. Great ideas are a combination of many small seemingly trivial good ideas. They do matter, otherwise one wouldn't know what to execute. I'm afraid this article does rather poorly on the swombat-o-meter - http://swombat.com/2011/1/20/how-to-write-good-startup-advice-articles http://swombat.com/2011/1/20/how-to-write-good-startup-advic...
- eladgil 16y ago
  I agree re: Facebook and Google. But to your point, both Facebook and Google could have been seen as bad ideas since, as you state: >Both search and social networks were written off as markets when the two current leaders entered the space. The point of this post is not "Are good ideas bad for a startup". Obviously good ideas are much better then bad ones, and great ones are much better then good ones. The point of the post is "don't think you need the most amazing idea ever to start something. it is more important to start something and learn what the great idea is along the way".
  - revorad 16y ago
    Sorry, this topic is bound to lead to a semantic merry-go-round! Facebook and Google are examples of great ideas executed well creating huge markets, which did not exist when they set out. So how would have their founders fared if they chose to focus on a great market at the start? We would have yet another portal with banner advertising and a dating site. I agree with the point of the post you mention here, but your post doesn't really support that. Your advice is to focus on a great market. One of the hottest markets right now seems to be photo sharing. But I highly doubt the next great company will come out of there. Can you give me an example of a great market today?
bowmande 16y ago
I would think you don't need a great idea to have a great company, but you need an idea that is worth something.
rradu 16y ago
Problem is that it's hard to drop a steady job and be motivated about an idea you know isn't very good. You need to have an idea that you can believe has a chance of being successful.
- scotch_drinker 16y ago
  Conversely, dropping a steady job for a crappy idea might be just the kind of motivation you might need to become successful. Full disclosure: I'm trying to convince myself of this every single morning.
  - jayliew 16y ago
    Burn the boats: http://techcrunch.com/2010/03/06/andreessen-media-burn-boats/ http://techcrunch.com/2010/03/06/andreessen-media-burn-boats... disclosure: I burned my boat
    - ericmsimons 16y ago
      "disclosure: I burned my boat" made me laugh :) I burned mine too!
      - jayliew 16y ago
        I'd drop you an email to say hi but your HN profile is empty :)
        ericmsimons 16y ago
        ericsimons@es40.net - thanks for reminding me to update that!
- justinmares 16y ago
  I also think there are too many cases where people just drop everything and go with an idea that is doomed to fail. It seems like there is competing advice between "do your homework" posts and "go for it!" posts.
thesash 16y ago
It's all about getting the right people on the bus: http://www.jimcollins.com/article_topics/articles/good-to-great.html http://www.jimcollins.com/article_topics/articles/good-to-gr....
ericmsimons 16y ago
Hmm...I agree to disagree. I think the best companies start with an idea. It may not be a product idea, but a goal (ie: let's bridge the gap between technology and social = facebook). The best products aren't slapped together using existing solutions. They are built from the ground up to solve a problem. If your company is building a solution to solve a specific problem, you are a great company.
jacquesm 16y ago
You don't even need an idea at all. All you need is to find a crossroads where two fields intersect and that has not been discovered by anybody else. Those crossroads are discovered, not invented and every time a new field is made by someone with a new idea a thousand new crossroads instantly spring up. Remember when 'on the internet' was the only thing changed in all those patent applications compared to what was going on before then? Suddenly appending 'on the internet' to something made it worth investigating. New fields open up all the time, if you're observing new findings in popular science it's very hard to not see opportunities enough for several lifetimes to scroll by in a single sitting of reading. Whether they're worth pursuing is another thing but the opportunities are there for the taking, no need to have a good idea or any at all to get off the ground. Another way to start a great company that is pretty effective is to take an idea that already exists and simply do a better job of it.
m0th87 16y ago
The last time I saw a post like this on HN, I replied that both idea and execution are important, with a contrived example. The creativity of the responses made me rethink my stance. http://news.ycombinator.com/item?id=1404428 http://news.ycombinator.com/item?id=1404428
sabat 16y ago
The real point this guy has is: don't wait for the best idea possible -- just pick something that's promising and start. You probably won't end up doing what you start with anyway, but it's better than just spinning your wheels waiting for inspiration.
bretthopper 16y ago
JERRY: So you're saying, I go in to YC, and tell them I got this idea for a startup about nothing. GEORGE: We go into YC. JERRY: "We"? Since when are you a hacker? GEORGE: (Scoffs) Hacker. We're talking about a startup. JERRY: You want to go with me to YC? GEORGE: Yeah. I think we really go something here. JERRY: What do we got? GEORGE: An idea. JERRY: What idea? GEORGE: An idea for the startup. JERRY: I still don't know what the idea is. GEORGE: It's about nothing. JERRY: Right. GEORGE: Everybody's doing something, we'll do nothing. JERRY: So, we go into YC, we tell them we've got an idea for a startup about nothing. GEORGE: Exactly. JERRY: They say, "What's your startup about?" I say, "Nothing." GEORGE: There you go. (A moment passes) JERRY: (Nodding) I think you may have something there.
- ssebro 16y ago
  Best. Post. Evar.
- j18490 16y ago
  Straw man argument. 'You don't need a good idea' != 'You don't need an idea'
  - bretthopper 16y ago
    You're taking this too seriously.
deleted 16y ago
[deleted]
umeshkacha 16y ago
I think link is down for this article. Could you please check?

105 points by eladgil 16y ago

It's true some successful company are the results of serious pivots. But I bet some 80% of them are the result of an initial good idea. IMO you shouldn't build a company from a bad idea, but you can in your spare time try to validate an idea you're uncertain about. But don't quit your job at Google.

eladgil 16y ago
Support from Fred Wilson's blog that most of his successful outcomes (success defined as "exit) were pivots: "Of the 26 companies that I consider realized or effectively realized in my personal track record, 17 of them made complete transformations or partial transformations of their businesses between the time we invested and the time we sold. That means there a 2/3 chance you’ll have to significantly reinvent your business between the time you take a venture capital investment and when you exit your business." Source: http://unionsquareventures.com/2007/11/why-early-stage.php http://unionsquareventures.com/2007/11/why-early-stage.php
- eladgil 16y ago
  More from the same blog post by Fred Wilson on his investments: "Here’s an interesting breakdown of the “transformers” versus the “stick to our plan” investments in my personal track record. Greater than 5x – 11 total investments – 7 transformed, 4 did not 1x to 5x – 10 total investments – 6 transformed, 4 did not Failures – 5 total investments, 1 transformed, 4 did not Unrealized Union Square investments – 6 total, 3 transformed, 3 have not"
- Charuru 16y ago
  Are you sure we're talking about the same "transformation"? Also that 17 lumps major and minor transformations together... For example if someone starts a dating site but later transforms into a general social network, I would call that a complete transformation. However if you start out making a ruby IDE but later realizes that real money is in MMORPGs or whatever, well you might have as well as waited.
  - dinedal 16y ago
    Does it matter? I think the point is that (Great People) + (Profitable Idea) = (Success) Consider: The variant of (Poor People) + (Profitable Idea) = (50/50 Success) and the variant of (Great People) + (Unprofitable Idea) = (Failure). If (Great People) it is far easier to get (Profitable Idea) then to change (Poor People) to (Great People). To use your example, if you're making a Ruby IDE and no one pays you, you will never be profitable. If you make a Greate Ruby IDE and no one pays you, you will never be profitable. Discovering that MMORPG's are more profitable one day, you build one, and people pay you, you might be profitable. You could consider the time you spent on your Ruby IDE a waste, or you could consider that you've learned something about software development as a business. It is far easier to change the idea then the people.
    - Charuru 16y ago
      But that's implying that working at Google won't be as rewarding. There's a lot of pressure to execute and iterate and so on when you're doing a startup. People sometimes forget to sit down and relax. Being in a less risky, less stressful position at Google can give you the important insights you need when you really start your business. I also submit that it'll be easier to quit Google when you've discovered your home run idea than to change your entire business.
      - harryh 16y ago
        "Being in a less risky, less stressful position at Google can give you the important insights you need when you really start your business." You could not be more wrong on this point. Being at google is a recipe for complacency. Quitting your job is incentive to actually figure out how to build something good. Because it's do that or fail.
        Psyonic 16y ago
        If this is so, why are there so many startups started by ex-Googlers?
riffer 16y ago
It's true some successful company are the results of serious pivots. But I bet some 80% of them are the result of an initial good idea. The successful ones that are a result of an initial good idea are a strict subset of the ones that choose a promising market.

revorad 16y ago

If you're going to talk of great companies, you can't leave out the two juggernauts of our time. Neither Google nor Facebook started as a company. Both search and social networks were written off as markets when the two current leaders entered the space. I don't want to invoke another semantic wrestling championship between execution and ideas, but you have to give credit to Facebook for realising that social networks are not just about dating. It was their idea of exactly replicating offline social relationships on the web, executed to near perfection that made them successful. Great ideas are a combination of many small seemingly trivial good ideas. They do matter, otherwise one wouldn't know what to execute. I'm afraid this article does rather poorly on the swombat-o-meter - http://swombat.com/2011/1/20/how-to-write-good-startup-advice-articles http://swombat.com/2011/1/20/how-to-write-good-startup-advic...

eladgil 16y ago
I agree re: Facebook and Google. But to your point, both Facebook and Google could have been seen as bad ideas since, as you state: >Both search and social networks were written off as markets when the two current leaders entered the space. The point of this post is not "Are good ideas bad for a startup". Obviously good ideas are much better then bad ones, and great ones are much better then good ones. The point of the post is "don't think you need the most amazing idea ever to start something. it is more important to start something and learn what the great idea is along the way".
- revorad 16y ago
  Sorry, this topic is bound to lead to a semantic merry-go-round! Facebook and Google are examples of great ideas executed well creating huge markets, which did not exist when they set out. So how would have their founders fared if they chose to focus on a great market at the start? We would have yet another portal with banner advertising and a dating site. I agree with the point of the post you mention here, but your post doesn't really support that. Your advice is to focus on a great market. One of the hottest markets right now seems to be photo sharing. But I highly doubt the next great company will come out of there. Can you give me an example of a great market today?

bowmande 16y ago

I would think you don't need a great idea to have a great company, but you need an idea that is worth something.

rradu 16y ago

Problem is that it's hard to drop a steady job and be motivated about an idea you know isn't very good. You need to have an idea that you can believe has a chance of being successful.

scotch_drinker 16y ago
Conversely, dropping a steady job for a crappy idea might be just the kind of motivation you might need to become successful. Full disclosure: I'm trying to convince myself of this every single morning.
- jayliew 16y ago
  Burn the boats: http://techcrunch.com/2010/03/06/andreessen-media-burn-boats/ http://techcrunch.com/2010/03/06/andreessen-media-burn-boats... disclosure: I burned my boat
  - ericmsimons 16y ago
    "disclosure: I burned my boat" made me laugh :) I burned mine too!
    - jayliew 16y ago
      I'd drop you an email to say hi but your HN profile is empty :)
      - ericmsimons 16y ago
        ericsimons@es40.net - thanks for reminding me to update that!
justinmares 16y ago
I also think there are too many cases where people just drop everything and go with an idea that is doomed to fail. It seems like there is competing advice between "do your homework" posts and "go for it!" posts.

thesash 16y ago

It's all about getting the right people on the bus: http://www.jimcollins.com/article_topics/articles/good-to-great.html http://www.jimcollins.com/article_topics/articles/good-to-gr....

ericmsimons 16y ago

Hmm...I agree to disagree. I think the best companies start with an idea. It may not be a product idea, but a goal (ie: let's bridge the gap between technology and social = facebook). The best products aren't slapped together using existing solutions. They are built from the ground up to solve a problem. If your company is building a solution to solve a specific problem, you are a great company.

jacquesm 16y ago

You don't even need an idea at all. All you need is to find a crossroads where two fields intersect and that has not been discovered by anybody else. Those crossroads are discovered, not invented and every time a new field is made by someone with a new idea a thousand new crossroads instantly spring up. Remember when 'on the internet' was the only thing changed in all those patent applications compared to what was going on before then? Suddenly appending 'on the internet' to something made it worth investigating. New fields open up all the time, if you're observing new findings in popular science it's very hard to not see opportunities enough for several lifetimes to scroll by in a single sitting of reading. Whether they're worth pursuing is another thing but the opportunities are there for the taking, no need to have a good idea or any at all to get off the ground. Another way to start a great company that is pretty effective is to take an idea that already exists and simply do a better job of it.

m0th87 16y ago

The last time I saw a post like this on HN, I replied that both idea and execution are important, with a contrived example. The creativity of the responses made me rethink my stance. http://news.ycombinator.com/item?id=1404428 http://news.ycombinator.com/item?id=1404428

sabat 16y ago

The real point this guy has is: don't wait for the best idea possible -- just pick something that's promising and start. You probably won't end up doing what you start with anyway, but it's better than just spinning your wheels waiting for inspiration.

bretthopper 16y ago

JERRY: So you're saying, I go in to YC, and tell them I got this idea for a startup about nothing. GEORGE: We go into YC. JERRY: "We"? Since when are you a hacker? GEORGE: (Scoffs) Hacker. We're talking about a startup. JERRY: You want to go with me to YC? GEORGE: Yeah. I think we really go something here. JERRY: What do we got? GEORGE: An idea. JERRY: What idea? GEORGE: An idea for the startup. JERRY: I still don't know what the idea is. GEORGE: It's about nothing. JERRY: Right. GEORGE: Everybody's doing something, we'll do nothing. JERRY: So, we go into YC, we tell them we've got an idea for a startup about nothing. GEORGE: Exactly. JERRY: They say, "What's your startup about?" I say, "Nothing." GEORGE: There you go. (A moment passes) JERRY: (Nodding) I think you may have something there.

ssebro 16y ago
Best. Post. Evar.
j18490 16y ago
Straw man argument. 'You don't need a good idea' != 'You don't need an idea'
- bretthopper 16y ago
  You're taking this too seriously.

deleted 16y ago

[deleted]

umeshkacha 16y ago

I think link is down for this article. Could you please check?