If you want to start a company and are working on new ideas, here’s how I’ve always done it and how I recommend you do it. Be the opposite of secretive. Create a Google spreadsheet where you list every idea you can think, even really half-baked ones. Include ideas you hear about (make sure you keep track of who had which idea so you can credit them/include them later).
Then take the spreadsheet and show it to every smart person you can get a meeting with and walk through each idea. Talk to VCs, entrepreneurs, potential customers, and people working at big companies in relevant industries. You’ll be surprised how much you’ll learn. The odds that someone will hear an idea and go start a competitor are close to zero. The odds you’ll learn which ideas are good and bad and how to improve them are very high.
Every conversation will contain some signal and some noise. Separating the two is tricky. Here are some broad rules of thumb I’ve developed for how to filter feedback based to the profession of the person giving it to you.
- Employees at relevant big companies. These people are great at providing facts (“Google has 100 people working on that problem”) but their judgment about the quality of startup ideas is generally bad. They tend to have goggles on that makes them think every good idea in their industry is already being built within their company. For example, every security industry person I talked to thought SiteAdvisor was a bad idea. (If it wasn’t, they think, someone at McAfee or Symantec company would have already built it!)
- VCs. VCs are good at telling you about similar companies in the past and present and critiquing your idea in an “MBA-like” way: will it scale? what are the economics? what is the best marketing strategy? I would listen to them on these topics but pretty much ignore whether they think your idea is good or bad.
- Potential customers. If your product is B2B, remember you’ll be selling to that person 2-3 years from now and by then the world and their priorities will likely have radically changed. If your product is B2C, it’s interesting to hear how regular consumers think about your product but often they really need to use it fully built and in the proper context to really judge it.
- Entrepreneurs. This is the one group I listen to without a filter.
Even though I have no intention of starting a new company for a long time (if ever), I still keep my idea spreadsheet and update it periodically. Some of the ideas I wrote down a few years ago are now companies started by other people (some successful, some not). A few I had the chance to invest in. It’s interesting to compare my notes and ratings of each idea with how those companies have actually performed. I also keep a list of “on the beach” ideas in case I have time in between startups. These are mostly non-profit ideas. I don’t know if I’ll ever get to those but they are particularly fun to think about.
* Thanks to James Cham for inspiring & contributing ideas to this post!