3 Tips for Generating Startup Ideas

Recently, we have seen a dramatic increase in the amount of capital available to technology entrepreneurs. A good example of how dramatic things have gotten is this article recently published by Business Insider detailing Masayoshi Son’s plan as CEO of Softbank’s Vision fund to flood startups with cash over the coming years.

The article goes in depth on the CEO’s extensive plans for the future of the 100 billion dollar Softbank Vision fund. Masayoshi talks in depth about his ambitions to launch funds of similar size every few years and even talks of investing up to $50 billion a year in startups.

Masayoshi isn’t the only heavyweight investor turning up the volume of cash invested in startups. Khosla Ventures, Sequoia, Lightspeed, General Catalyst and other top venture firms have all announced funds of at least $1 billion or more in the last year.

This large increase in available capital obviously poses a tremendous benefit to startup founders and the world. With billions in the game and startup resources growing increasingly abundant, now is a uniquely opportunistic time to start a company. This much money also poses a huge distraction to potential founders. All this money can make it easy for founders to generate ideas through the lens of what they can sell to an investor rather than building a lasting business. I want to address three ideas from some of the most admirable leaders of the industry today in an effort to reiterate to future founders key principles to think about when coming up with their startup ideas.

1. Find a problem

“Why do so many founders build things no one wants? Because they begin by trying to think of startup ideas.” – Paul Graham

Find a problem you have. It doesn’t have to impact you directly to be your problem. It could be a problem someone you care about has and you chose to work on finding a solution. Too often do startup founders work on products they themselves would rarely use. It’s nearly impossible to solve problems you’ve never experienced or know anyone that has experienced this problem. Focusing on problems that are directly important to you is beneficial for a number of reasons. One of the benefits of solving problems you know well is the potential it has to increase your odds of being funded. One of the biggest hurdles a startup can face while fundraising is convincing investors that they are the team to solve this particular problem. Tackling a problem that you have unique insight on can make this a whole lot easier.

2. Start with Why

Everyone has heard this one and it’s widely agreed upon but it’s extremely important. I want to highlight some points in the context of finding a problem. The idea of starting with why is based upon the premise that people are inspired by a sense of purpose. Founders should find a sense of purpose for the problem they are trying to solve. This is where experience can really be outworked and lose to teams with tunnel vision focus on who their users are and what problems they have. Founders that cannot only demonstrate but convey the importance of the problem their team is solving will reap the rewards in recruiting and fundraising efforts. Nailing down why you’re solving this problem is one of the most important things founders can do for themselves and their companies.

3. Improving the Probability that the Future is Good

Despite how the Securities and Exchange Commission may feel about his Tweets, I’ve always loved this premise frequently conveyed by Tesla and SpaceX CEO, Elon Musk. Musk often talks about a time in his youth where he wrestled with common existential questions and how he should spend his life. As a result of this time in his life, he has since built his companies on this idea that he is working to increase the probability the future is good. If founders and people alike dedicate their talents to problems that increase the likelihood the future is good, everybody benefits. There are so many problems in the world that need to be solved that startups founders should bask in their options. With giants like Elon Musk and Jeff Bezos tackling problems like reusable rockets and space travel, there’s plenty of problems for the rest of us to solve to make the future better. Founders looking to be successful should focus on solving problems to make society better, people’s lives easier, and creates value for everyone involved.

Though seemingly broad and ambiguous, I’m hopeful it proves helpful in applying this thought framework to each founder’s field expertise as they work to start the next great startup. Technology companies and venture capital can be the best medium to create value while solving the world’s problems. Founders should work to find purpose in solving a problem that makes people’s lives better and increases the probability the future is good and the capital will follow.

About the Author:

Sam Shillingford Sam studied economics and business at the University of Utah. He is a venture partner with Contrary Capital and also worked as a product manager for Anonyome Labs in Salt Lake City.

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