Paul Graham over at Y Combinator put together a good list of ideas for start-ups. If you're looking for some inspiration, take a look:
Startup Ideas We'd Like to Fund
Paul Graham
July 2008
When we read Y Combinator applications there are always ideas we're
hoping to see. In the past we've never said publicly what they
are. If we say we're looking for x, we'll get applications proposing
x, certainly. But then it actually becomes harder to judge them:
is this group proposing x because they were already thinking about
it, or because they know that's what we want to hear?
We don't like to sit on these ideas, though, because we really want
people to work on them. So we're trying something new: we're going
to list some of the ideas we've been waiting to see, but only
describe them in general terms. It may be that recipes for ideas
are the most useful form anyway, because imaginative people will
take them in directions we didn't anticipate.
Please don't feel that if you want to apply to Y Combinator, you
have to work on one of these types of ideas. If we've learned
nothing else from doing YC, it's how little we know. Many of the
best startups we've funded, like Loopt,
proposed things we'd never considered.
1. A cure for the disease of which the RIAA
is a symptom. Something is broken when Sony and
Universal are suing children. Actually, at least two things are
broken: the software that file sharers use, and the record labels'
business model. The current situation can't be the final answer.
And what happened with music is now happening with movies. When
the dust settles in 20 years, what will this world look like? What
components of it could you start building now?
The answer may be far afield. The answer for the music industry,
for example, is probably to give up insisting on payment for recorded
music and focus on licensing and live shows. But what happens to
movies? Do they morph into games?
2. Simplified browsing. There
are a lot of cases where you'd trade some of the power of a web
browser for greater simplicity. Grandparents and small children
don't want the full web; they want to communicate and share pictures
and look things up. What viable ideas lie undiscovered in the space
between a digital photo frame and a computer running Firefox? If
you built one now, who else would use it besides grandparents and
small children?
3. New news. As Marc
Andreessen points out, newspapers are in trouble. The problem
is not merely that they've been slow to adapt to the web. It's
more serious than that: their problems are due to deep structural
flaws that are exposed now that they have competitors. When the
only sources of news were the wire services and a few big papers,
it was enough to keep writing stories about how the president met
with someone and they each said conventional things written in
advance by their staffs. Readers were never that interested, but
they were willing to consider this news when there were no alternatives.
News will morph significantly in the more competitive environment
of the web. So called "blogs" (because the old media call everything
published online a "blog") like PerezHilton and TechCrunch are one
sign of the future. News sites like Reddit and Digg are another.
But these are just the beginning.
4. Outsourced IT. In most companies
the IT department is an expensive bottleneck. Getting them to make
you a simple web form could take months. Enter Wufoo. Now if the marketing department
wants to put a form on the web, they can do it themselves in 5
minutes. You can take practically anything users still depend on
IT departments for and base a startup on it, and you will have the
enormous force of their present dissatisfaction pushing you forward.
5. Enterprise software 2.0.
Enterprise software companies sell bad software for huge amounts
of money. They get away with it for a variety of reasons that link
together to form a sort of protective wall. But the software world
is changing. I suspect that if you study different parts of the
enterprise software business (not just what the software does, but
more importantly, how it's sold) you'll find parts that could be
picked off by startups.
One way to start is to make things for smaller companies, because
they can't afford the overpriced stuff made for big ones. They're
also easier to sell to.
6. More variants of CRM. This
is a form of enterprise software, but I'm mentioning it explicitly
because it seems like this area has such potential. CRM ("Customer
Relationship Management") means all sorts of different things, but
a lot of the current embodiments don't seem much more than mailing
list managers. It should be possible to make interactions with
customers much higher-res.
7. Something your company needs that doesn't
exist. Many of the best startups happened when someone
needed something in their work, found it didn't exist, and quit
to build it. This is vaguer than most of the other recipes
here, but it may be the most valuable. You're working on something
you know customers want, because you were the customer. And if it
was something you needed at work, other people will too, and they'll
be willing to pay for it.
So if you're working for a big company and you want to strike out
on your own, here's a recipe for an idea. Start this sentence:
"We'd pay a lot if someone would just build a ..." Whatever you say
next is probably a good product idea.
8. Dating. Current dating sites
are not the last word. Better ones will appear. But anyone who
wants to start a dating startup has to answer two questions: in
addition to the usual question about how you're going to approach
dating differently, you have to answer the even more important
question of how to overcome the huge chicken and egg problem every
dating site faces. A site like Reddit is interesting when there
are only 20 users. But no one wants to use a dating site with only
20 users—which of course becomes a self-perpetuating problem. So
if you want to do a dating startup, don't focus on the novel take
on dating that you're going to offer. That's the easy half. Focus
on novel ways to get around the chicken and egg problem.
9. Photo/video sharing services.
A lot of the most popular sites on the web are for photo sharing.
But the sites classified as social networks are also largely about
photo sharing. As much as people like to share words (IM and email
and blogging are "word sharing" apps), they probably like to share
pictures more. It's less work and the results are usually more
interesting. I think there is huge growth still to come. There
may ultimately be 30 different subtypes of image/video sharing
service, half of which remain to be discovered.
10. Auctions. Online auctions
have more potential than most people currently realize. Auctions
seem boring now because EBay is doing a bad job, but is still
powerful enough that they have a de facto monopoly. Result:
stagnation. But I suspect EBay could now be attacked on its home
territory, and that this territory would, in the hands of a successful
invader, turn out to be more valuable than it currently appears.
As with dating, however, a startup that wants to do this has to
expend more effort on their strategy for cracking the monopoly than
on how their auction site will work.
11. Web Office apps. We're
interested in funding anyone competing with Microsoft desktop
software. Obviously this is a rich market, considering how much
Microsoft makes from it. A startup that made a tenth as much would
be very happy. And a startup that takes on such a project will be
helped along by Microsoft itself, who between their increasingly
bureaucratic culture and their desire to protect existing desktop
revenues will probably do a bad job of building web-based Office
variants themselves. Before you try to start a startup doing this,
however, you should be prepared to explain why existing web-based
Office alternatives haven't taken the world by storm, and how you're
going to beat that.
12. Fix advertising. Advertising
could be made much better if it tried to please its audience, instead
of treating them like victims who deserve x amount of abuse in
return for whatever free site they're getting. It doesn't work
anyway; audiences learn to tune out boring ads, no matter how loud
they shout.
What we have now is basically print and TV advertising translated
to the web. The right answer will probably look very different.
It might not even seem like advertising, by current standards. So
the way to approach this problem is probably to start over from
scratch: to think what the goal of advertising is, and ask how to
do that using the new ingredients technology gives us. Probably
the new answers exist already, in some early form that will only
later be recognized as the replacement for traditional advertising.
Bonus points if you can invent new forms of advertising whose effects
are measurable, above all in sales.
13. Online learning. US schools
are often bad. A lot of parents realize it, and would be interested
in ways for their kids to learn more. Till recently, schools, like
newspapers, had geographical monopolies. But the web changes that.
How can you teach kids now that you can reach them through the web?
The possible answers are a lot more interesting than just putting
books online.
One route would be to start with test prep services, for which
there's already demand, and then expand into teaching kids more
than just how to score high on tests. Another would be to start
with games and gradually make them more thoughtful. Another,
particularly for younger kids, would be to let them learn by watching
one another (anonymously) solve problems.
14. Tools for measurement. Now
that so much happens on computers connected to networks, it's
possible to measure things we may not have realized we could. And
there are some big problems that may be soluble if we can measure
more. The most important of all is the defining flaw of large
organizations: you can't tell who the most
productive people are.
A small company is measured directly by the market. But once an
organization gets big enough that people on in the interior are
protected from market forces, politics starts to rule, instead of
performance. An improvement of even a few percent in the ability
to measure what actually happens in large organizations would have
a huge impact on the world economy, and a startup that enabled it
would be entitled to a cut.
15. Off the shelf security.
Services like ADT charge a fortune. Now that houses and their
owners are both connected to networks practically all the time, a
startup could stitch together alternatives out of cheap, existing
hardware and services.
16. A form of search that depends on
design. Google doesn't have a lot of weaknesses. One
of the biggest is that they have no sense of design. They do the
next best thing, which is to keep things sparse. But if there were
a kind of search that depended a lot on design, a startup might
actually be able to beat Google at search. I don't know if there
is, but if you do, we'd love to hear from you.
17. New payment methods. There
are almost certainly things whose growth is held back because there's
no way to charge for them. And the people who could implement
solutions don't realize how much demand there would be, precisely
because this growth has been held back. So pretty much any new way
of paying for things that's easier for some class of situations
will turn out to have a bigger market than its inventors expected.
Look at Paypal. (Warning: Regulated industry.)
18. The WebOS. It probably won't
be a literal translation of a client OS shifted to servers. But
as applications migrate to servers, it seems possible there will
be something that plays a central role like an OS does. We've
already funded several startups that could be candidates. But this
is a big prize, and there will probably be multiple winners.
19. Application and/or data hosting.
This is related to the preceding idea, but not identical. And
again, while we've already funded several startups in this area,
it's probably going to be big enough that it contains several rich
markets.
It may turn out that 4, 18, and 19 all have the same answer. Or
rather, that there will be things that answer all three. But the
way to find such a grand, overarching solution is probably not to
approach it directly, but to start by solving smaller, specific
problems, then gradually expand your scope. Start by writing Basic
for the Altair.
20. Shopping guides. Like news,
shopping used to be constrained by geography. You went to your
local store and chose from what they had. Now the space of
possibilities is bewilderingly large, and people need help navigating
it. If you already know what you want, Bountii can find you the best price.
But how do you decide what you want? Hint: One answer is related
to number 3.
21. Finance software for individuals and
small businesses. Intuit seems ripe for picking off.
The difficulty is that they've got data connections with all the
banks. That's hard for a small startup to match. But if you can
start in a neighboring area and gradually expand into their territory,
you could displace them.
22. A web-based Excel/database hybrid.
People often use Excel as a lightweight database. I suspect there's
an opportunity to create the program such users wish existed, and
that there are new things you could do if it were web-based. Like
make it easier to get data into it, through forms or scraping.
Don't make it feel like a database. That frightens people. The
question to ask is: how much can I let people do without defining
structure? You want the database equivalent of a language that
makes its easy to keep data in linked lists. (Which means you
probably want to write it in one.)
23. More open alternatives to Wikipedia.
Deletionists rule Wikipedia. Ironically, they're constrained by
print-era thinking. What harm does it do if an online reference
has a long tail of articles that are only interesting to a few
people, so long as everyone can still find whatever they're looking
for? There is room to do to Wikipedia what Wikipedia did to
Britannica.
24. A buffer against bad customer
service. A lot of companies (to say nothing of government
agencies) have appalling customer service. "Please stay on the
line. Your call is important to us." Doesn't it make you cringe
just to read that? Sometimes the UIs presented
to customers are even deliberately difficult; some airlines
deliberately make it hard to buy tickets using miles, for example.
Maybe if you built a more user-friendly wrapper around common bad
customer service experiences, people would pay to use it. Passport
expediters are an encouraging example.
25. A Craigslist competitor.
Craiglist is ambivalent about being a business. This is both a
strength and a weakness. If you focus on the areas where it's a
weakness, you may find there are better ways to solve some of the
problems Craigslist solves.
26. Better video chat. Skype and
Tokbox are just the beginning. There's going to be a lot of evolution
in this area, especially on mobile devices.
27. Hardware/software hybrids.
Most hackers find hardware projects alarming. You have to deal
with messy, expensive physical stuff. But Meraki shows what you can do if you're
willing to venture even a little way into hardware. There's a lot
of low-hanging fruit in hardware; you can often do dramatically new
things by making comparatively small tweaks to existing stuff.
Hardware is already mostly software. What I mean by a hardware/software
hybrid is one in which software plays a very visible role. If you
work on an idea of this type you'll tend to have the field to
yourself, because most hackers are afraid of hardware, and most
hardware companies can't write good software. (One reason your
iPod isn't made by Sony is that Sony can't write iTunes.)
28. Fixing email overload. A lot
of people, including me, feel they get too much email. A solution
would find a ready market. But the best solution may not be anything
as obvious as a new mail reader.
Related problem: Using your inbox as a to-do list. The solution
is probably to acknowledge this rather than prevent it.
29. Easy site builders for specific
markets. Weebly is a
good, general-purpose site builder. But there are a lot of
markets that could use more specialized tools. What's the best way
to make a web site if you're a real estate agent, or a restaurant,
or a lawyer? There still don't seem to be canonical answers.
Obviously the way to build this is to write a flexible site builder,
then write layers on top to produce different variants. Hint: The
key to making a site builder for end-users is to make software that
lets people with no design ability produce things that look good—or at least professional.
30. Startups for startups. The
increasing number of startups is itself an opportunity for startups.
We're one; TechCrunch is another. What other new things can you
do?
Consider this list to end with a giant ellipsis. It's not even a
complete list of the types of ideas we're looking for, let alone
of all types of startup ideas. So if you have a great idea that's
not on this list, don't be deterred. Some of the best ideas are
outliers everyone ignores because they seem crazy.
It was an interesting exercise to write out this list. I noticed
a lot of similarities between ideas that I never realized were
there. In fact, when you read the list, you get a pretty accurate
composite portrait of a startup: a combination of relentless predator
upon the obsolete and benevolent solver of the world's problems.
As ways of making money go, that's pretty good. Startups are often
ruthless competitors, but they're competing in a game won by making
what people want.
