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How to choose an idea for your startup Dalton Caldwell Y Combinator

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How to choose an idea for your startup Dalton Caldwell Y Combinator - Webrazzi Summit 2015

How to choose an idea for your startup Dalton Caldwell Y Combinator

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Webrazzi 2015
Dalton Caldwell
About Y Combinator
Since 2005, we’ve funded
over 950 startups.
How to choose an idea for your startup  Dalton Caldwell Y Combinator
In the last batch, 

YC funded 114 startups.
Y Combinator is a
community of over 

2,000 founders.
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How to choose an idea for your startup Dalton Caldwell Y Combinator

  • 3. Since 2005, we’ve funded over 950 startups.
  • 5. In the last batch, 
 YC funded 114 startups.
  • 6. Y Combinator is a community of over 
 2,000 founders.
  • 7. Countries represented in the W2015 batch:
 Argentina, Canada, Chile, China, Colombia, France, India, Israel, Netherlands, New Zealand, Peru, Russia, Singapore, Thailand, Turkey, UK, Ukraine, USA.
  • 8. Turkish companies recently funded by YC: Zeplin Summer 2015 eBrandvalue Winter 2015 Vizera labs Summer 2014
  • 10. How to come up with (and evaluate) startup ideas
  • 11. Questions to ask yourself when evaluating an idea:
  • 12. Do people want this?
  • 13. Has anyone tried this before? If yes, why didn’t it work? If no, are you sure people want it?
  • 14. What are your insights into this problem? Why are you the team to do this?
  • 15. Why are you excited about working on this? Is your excitement contagious?
  • 16. Pitfalls to avoid when evaluating startup ideas
  • 17. Communication is key •Don’t use buzzwords or otherwise obfuscate what your startup does •Explain what your startup does in simple, clear language with as few words as possible •Get good at explaining your idea to potential customers in person
  • 18. Imagine you want to be a world class long distance runner. Is it more valuable to: •Learn how to negotiate Nike sponsorships, how to best prepare for the olympics, how to hire a staff doctor and staff of specialists, etc. •Learn a training schedule and practices for how to be really good at running.
  • 19. Raising money doesn’t magically make you grow faster or make people want your product.
  • 20. Beware the cargo cult startup •Fancy titles, a full “executive team” •Hiring employees ahead of product-market fit •Renting office space, hiring PR firm, launch party
  • 21. Some recent ideas funded by Y Combinator: •Quantum Computers •Rocketry •Fusion Reactors
  • 22. Most “big ideas” aren’t fundable because founders start with assumption of success and work backwards
  • 23. A good way to approach a big idea is to start with a “small” idea that is immediately useful to a small group of people
  • 24. “Ocean boiler” ideas: •Unclear ideas how to get initial users/customers •Vague ideas of the application of a technology •No “hair on fire” need being addressed
  • 25. More on “ocean boiler” ideas •Circular logic about why idea will succeed •Require tremendous upfront capital with no clear milestones between deep R&D phase and success •Conflate difficulty of approach with value being created
  • 26. Succesful ambitious startup ideas can look like multi- stage rockets
  • 27. Multi-stage rockets •Not a miniature version of the end goal. •Goal is to use momentum/traction from the first stage to make it to the next stage. •VC funding works like a multi-stage rocket
  • 28. Example - AirBnb •Ocean boiling pitch: “We are going to build a peer-to-peer marketplace that will compete with the global the hotel industry” •Multi-stage rocket pitch: “We are going to make a website that helps people couchsurf”
  • 29. Good ideas often have: •Simple value proposition to a first market •Solves hair-on-fire problem for that market •Network effects
  • 30. Good ideas often seem “small” or trivial when you first start working on them Don’t worry about your idea being small, worry about how much your users value your product
  • 31. Remember the top causes of death: •don’t solve a real problem/people don’t want it •co-founder disputes •don’t find a scalable way to get users/customers