Ideas

We love ideas, but we love it even more when they get turned into sustainable, valuable businesses.

It’s an exciting time to be alive because, during our lifestimes, innovation is evolving from an art into a science. Elsewhere we’ve written books and blogged about the big picture of the “Ideas Business”. Here, and in a cascading series of Request for Startup posts, we will zoom in on and critique some specific hypothetical ideas to explore what does and doesn’t make the basis for a good start-up business.

Ideas Out of Scope
We don’t care for “me-too” businesses, especially where there is no obvious connection between the team and the idea. You wouldn’t believe the number of pitches we see where a wannabe founder (who has clearly logged more total flight hours in Excel than in Firefox) wants to start a mobile social gaming platform – simply because everybody else is doing it. While we understand that e-commerce and online marketing platforms are important, they just don’t turn us on. Mobile advertising networks. Search engine optimization. Groupon clones. Social entertainment shopping sites. Location-based ideas that are more a feature than a product – if they’ve been done, or could be done in 24 hours during a Facebook or Google hackathon, expect us to respond skeptically.

Don’t get us wrong. We aren’t saying that me-too businesses can’t make money. Execution is everything, and adapting a proven model to a new regional market is a perfectly respectable line of work.

We simply believe that great hackers can do better.

(Ashlee Vance has a great piece about this in BusinessWeek.)

Follow Your Bliss
In any creative writing workshop, you’ll hear seasoned, successful authors exhorting students: “don’t waste your time copying J.K. Rowling! She’s the best person in the world at telling Harry Potter stories. What stories are you best at telling? What’s the story that only you can tell?”

Sure, we admit that not everybody has a story to tell – at least, not a story that will entrance millions. But the point is: somewhere out there is a problem that only you can solve; there is a startup that only you can found. Found that startup. Solve that problem. Don’t found some other startup that belongs to somebody else. It is only logical.

Ideas We Want
Here are a few ideas that do interest us. They are examples, intended to illustrate a certain style of thinking and a range of themes: something you might want to start discussing with customers and not necessarily real products or services.

The Unbuy App. Conspicuous consumption is out. Austerity is in. Yet the fundamental peacocking drive toward luxury remains. How can we give people a way to express taste and signal status without the environmental costs of making more and more stuff? Imagine you’re standing in a Louis Vuitton shop looking at a $2,000 handbag that you really really like. But instead of buying it to impress your real-world friends, you whip out your iPhone, boot the Unbuy App, and zap the UPC; there’s already plenty of comparison-shopping infrastructure out there that makes this easy. An in-app purchase charges 1% of the item price to your account, and announces on your Facebook wall that you overcame temptation. Of the $20 that you pay, half goes to revenue for Unbuy, and the other half gets reserved for your use, earmarked toward more socially conscious causes. If you don’t care which cause you want to support, crowdsource the choice to your social circle or to the global decision pool.

Life-to-cloud. Maybe a parent has died. Or you’re moving house. Or you simply want to unclutter your life. Imagine a packing and moving service that offered an additional feature: instead of boxing and shipping all your crap to your new home, why not mark certain items for archiving to the cloud? We all own things that have sentimental value but no practical purpose. Old clothes from school days. Awards and trophies. Soft toys from our childhood. Kitsch that grandpa handed down. Vacation memorabilia. We like the memories but not the things themselves. Imagine sending them to a service that photographed (if 3D) or scanned (if 2D) the items, then put them on the Internet in a password-protected shrine of JPGs and PDFs. The actual items could then be eBayed; the service takes a cut of the proceeds and you collect the cash.

Monetizing the Retweet is a different take on the newspaper paywall. People don’t want to pay to consume content. That’s why they want to evade paywalls. But good content, once consumed, has a way of wanting to propagate: the memes want to move from mind to mind. So maybe the value prop lies in charging money to share: a micropayment infrastructure allows me to send a paywalled article to friends. I pay for them to read. The friends are grateful for the gift, and I feel good about sharing.

Everyone’s Becoming a Geek. Alpha geeks lead the pack. They do things that seem weird at the time. Years later, everybody’s doing it. Back in 1995 I built a little photo-gallery CGI to make it easy for me to upload and share my pictures online. It worked for me, and a couple of my friends used it too, and we were happy with that. But if it had occurred to us to make it easy for nongeeks to share their pictures as well, it could’ve become Flickr. What hacks have you cobbled together for your own use, that might be useful to others? The idea is that people tend to want to do the same things, again and again, in every medium, on every platform. Every decade we add another row to the bottom of the periodic table of protocols: Twitter is kind of like IRC, but with twice as many neutrons. In photography, sepia-toning just keeps coming back, like bell bottoms in fashion. They did it in the 1900s and they’re doing it again with Instagram. What will bring 4chan to the teeming masses? lolcats? xkcd? procmail?

Patterns in the Cloud. Connected to that idea: What does the world of ubiquitous computing look like? Unixheads have been living in that world for two decades now. The patterns recur. Take the lowly cron job. We wouldn’t be surprised if there were multi-million-dollar companies started around the idea of scheduling arbitrary web service event activation. Already we’re seeing shell scripts in the cloud and a command line for the internet.

Doing it Right. On a related note, there might be some service out there which is conspicuously failing to cross the chasm. Being an early-adopter alpha geek, you might be using that service, but you might be dissatisfied with it for any number of reasons; yet the providers of that service stubbornly refuse to fix it. Why? Maybe because they’re happy with their lifestyle; they don’t want the headaches associated with running a bigger business. If you’ve got a vision for how something that many people do today, can be done ten times better, we’d love to hear it. One specific example that comes to mind: fashion blogging.

Bringing Science to the Masses. Science depends on quantification and visualization. Tufte-style information design can help tame the increasingly complex world we live in. Startups that use dataviz to disrupt old industries are hot. We love Tableau, for example. Life Logging and the Quantified Self rely on data viz and on analytics to show interesting correlations that could help people discover allergies, effective diets, optimal sleeping arrangements, you name it.

Asia isn’t California. In Asia, many middle-class families have domestic servants. What if your maid could be a profit center? Maybe your domestic helper could be part of a distributed call center. Many people live with their parents through their twenties, until they get married. What technologies could help ease that situation? And Singapore is the first country in the world that is a first-class Amazon AWS region, and also has 1Gbps fiber to the home, nationwide… imagine the possibilities!

Do these ideas resonate with you? Great. But it would be a mistake to simply pitch them back to us in your application. Why? Because we’re looking for a second criterion: the team has to be right for the idea.

Idea / Founder Fit
You’ve probably heard of product/market fit. The backstage version of that concept is idea/founder fit.

For every business idea, there is an ideal founding team. Suppose the business idea is about disrupting diabetes healthcare in China. What does the ideal founding team look like? Probably Chinese, from China, with a diabetic or ex-diabetic founder, and a doctor founder, and someone who’s built and exited a consumer healthcare startup before. Now imagine a blonde Swedish 24-year-old with a degree in Scandinavian film, and two years of finance consulting experience for hedge funds in the UK, who doesn’t speak Chinese, and has never been to China: the idea/founder fit is zero.

Whatever business idea you have, ask yourself: what is the ideal team to execute this concept? If the objective answer describes you, good!

Developer, Designer, and Distributor
All progress is due to the unreasonable man. Quora says the best startup teams combine a developer, a designer, and a distributor – someone who knows the market and can sell to it. Another way to put that is a “A hacker, a hipster, and a hustler”. We’re looking for people who are three-in-ones. The ideal applicant has the design instinct “there’s got to be a better way” to spot a solution to a problem nobody else has yet articulated; has the ability to write the program to implement the solution, and has the ability to talk to buyers in their own language, and do customer development without fear.

If you’re a hacker, you already have almost everything it takes to be an entrepreneur.

Scalable Startups
There are many kinds of startups: lifestyle startups and small businesses are fine, but at JFDI we prefer founders who are brilliant, crazy, cocky enough to wade into a new market with an unproven product. We’re crazy enough to back them.

The scalable startup rides a trend that’s sweeping around the world. That trend opens the door to disruption, allowing startups to challenge incumbents by making it easier or cheaper for many to do something that had only ever been done before by the rich or the weird. And the scalable startup has to be more than a small business: it has to be able to serve millions of customers without opening hundreds of storefronts. That rules out restaurants, dentistries, brick-and-mortar retail operations; it rules in mobile, Internet, and media plays.

The buyable startup often adds a hard feature to an existing platform. Sometimes it builds out that platform just to showcase the feature, but there’s usually a set of incumbents who watch one another like hawks. Once one of those incumbents puts out a new offering, they each scramble to catch up. Quite soon, they ask themselves the question buy or build? And if they decide to buy, a buyable startup could get picked up from $2–10 million.

At JFDI, we want to build startups that are buyable and scalable: quick wins never hurt anyone, but if it could be the start of something truly big, we’re happy to back that too.

Inspired?
If any of this resonates with you, we invite you to join our free Open Frog Community, and share your ideas with us. Seek some validation from real customers and then, by all means, apply to join one of our bootcamp programs.