How to save yourself from bad startup ideas that look good

The startup bug has bitten you. You want to start a business, grow it for a few years, sell it and rest easy for the rest of your life. It's a great dream. But that's the easy part. The hard part is building the business. And this long, arduous journey starts with a single step – a great idea.

How do you come up with a startup idea? To start, you read this thought-provoking article by Paul Graham where he talks a lot about the characteristics of great ideas. He also talks about a similar looking but antithetical concept: the 'sitcom' startup idea.

What is a sitcom startup idea? It's one which sounds plausible, but is actually bad.

This is not just a bad idea. Those are easy to recognise. Instead, it's an idea which sounds plausible. So plausible that when you go ask customers whether they'd use it, they don't say no.

That's what makes it dangerous. You can read Lean Startup, dutifully 'validate' your idea with customers, and then build it. Only to find out there’s actually no market.

Social network for pets

Paul illustrates this with a 'social network for pets'. If you have pets (as I do), this sounds like a good idea. Sure, you can imagine posting photos of your pet parakeet on petlife.com, where others wait with bated breath to 'like' them. Or, what's worse, you can imagine others around you loving this service.

I aired this idea during my lecture at IIM Trichy, and people loved it. But it's bad on two levels:

1. Just because people say they like a product, it doesn’t mean they'll use it. I might like 30 different websites, but I won’t check all of them every day. Given my limited attention span, the only social network I'll use daily is Facebook.
2. If you talk to 100 people and they all know someone who would use this, then you've found yourself a community of 100 almost-users. Or, to be precise, exactly zero users.

Identifying 'sitcom' startup ideas

So how do you differentiate between sitcom startup ideas and truly promising ones? How do you know if you're on to something huge, or it is just a mirage?

The short (and hard) answer is: you try anyway. You build an MVP and check if there's user traction. If there is, congratulations, it worked. If there isn't, then you know you just had a 'sitcom' idea.

But there is an easier way. Plausible ideas follow certain patterns. If you hear a startup idea that sounds like these, tread cautiously. You may be onto a 'sitcom' startup idea.

A vitamin, not a painkiller

Petlife.com falls into this category. It's a nice-to-have, like a vitamin capsule. No one needs it. A root-canal patient needs a painkiller – he’ll pass out without it. If people say they 'want' what you're building, but don't 'need' it, you may be onto a bad idea that sounds good.

Instead of focussing on cool things people could use, try and solve a real problem.

Not solving a top-tier problem

But solving a problem alone isn’t enough. It must be important. If the problem you're solving is not one of your customer's top three problems, it's not important. Give up now, before it's too late.

I once thought of building a software tool to help VCs manage deal flow. They see tons of deals; surely they’ll need a way to manage them better?

The only issue –is that it's not an important enough problem. Getting strong deal flow is far, far more important than tracking it. Many VCs are happy enough using Excel to track their pipelines.

"Solving a problem people don't know they have"

This is a first cousin of the two patterns above. It’s solving a problem, but one people don't know they have. Which begs the question - how do you know they have this problem?

Even if you’re right and there is a problem to be solved here, it’s probably not important. If it is a top-tier problem, then the customer would know of it already.

I tried solving such a problem two years ago. It did not work.

It's hard enough convincing people to buy your product. Why do you want to add the burden of convincing them that they need it?

"This product solves everyone's problems" OR the "Microsoft Office" product

I love Microsoft Office. It's so flexible, so all-encompassing. Google too. No matter what type of problem you're working on, you can bet that Excel, PowerPoint or Google will be super helpful.

These are all excellent products. But aiming to solve everyone's problems in one go can sound the death knell for startups. Why?

First, it’s unlikely there’s a dire need for your product among such a large group of people. It may be a nice-to-have, but not a life-and-death need.

Second, the complexity of pleasing everyone often means you end up with a bad product that pleases… no one.

Trying to solve a problem for everyone often means you end up solving it for… no one.

"Uber for X"

This template is as old as the Internet. Take what's working in one sector; plonk it into another. It was "Website for X" in the 90s, "Social network for Y" in the 2000s. But it's a dangerous stratagem. Why?

Sure, Uber has been uber successful in the cab market. But that doesn't mean on-demand could work everywhere else. Unless the idea has grown organically from a problem, you have to assume it's bad. You have to assume that the founder has applied the Uber template to the first sector he could think of.

An even more pervasive, far more insidious variant of this is “X for India”. I’ve written about it here.

These are just five of the many templates that plausible-sounding bad startup ideas follow. If you want to see a few more templates, with examples, you can find them here.

Of course, these patterns aren’t foolproof. We can never really know in advance if a plausible idea is actually bad. But we do know that the universe of plausible ideas is much larger than the set of good ideas. Just like a monkey banging away at a keyboard will not produce Romeo and Juliet (it might, but the probability is infinitesimal), if all you know about a startup idea is that it's plausible, it's probably bad.

You've got to create a product that at least a few people NEED, not one that a large number of people WANT.