One of my biggest pet peeves is the tendency for entrepreneurs to waste their time on bad startup ideas. Yes, the idea is less important than the team and execution, but why force yourself to swim upstream?
While I’ve given a talk on Stanford’s needfinding process, I have an even easier rubric you can apply: You startup should address something that is common, valuable, and broken.
Obviously, you need to address a big market. Tackling a common problem gives you a big potential market…but it isn’t the only factor.
You need something that is valuable to the individual users/buyers. The human resistance to change is so strong, that it takes something fairly valuable to provide the required activation energy.
Finally, you need to focus on something that’s currently broken. It doesn’t matter if a market is common and valuable, if it isn’t broken, it’s going to be tough to revolutionize it.
A great example of this rubric is Uber. The need for taxis and car service is common, especially in certain major cities. It’s definitely valuable, given the amount of money people spend. And it’s totally broken, as anyone who has tried to get a cab in New York on Friday night can attest.
In contrast, I recently saw an article about a new startup that will allow you to pay the bill at restaurants with your phone, rather than your credit card. While this is common and valuable, it’s hard to see how it’s broken.
Now what would be valuable is the ability to get your check and pay your bill without having to wait for your server! Hopefully they pivot to add those features.
About the Author: Chris Yeh
Chris is a Co-Founder and General Partner at Wasabi Ventures. He was on the founding team of pioneering Internet companies such as United Online Services (Nasdaq: UNTD) and Merrill Lynch’s Intelligent Technologies Group. He has founded, advised, or invested in dozens of startups, including Ustream and PBworks.
This was originally posted on Chris Yeh’s blog.