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Crafting Successful Startups: A Guide to Generating Innovative Business Ideas

Crafting Successful Startups: A Guide to Generating Innovative Business Ideas

I believe that no matter whether you’re considering entrepreneurship or not, this question will inevitably cross your mind at some point. Moreover, it seems to be one of the most burning questions for everyone when it comes to entrepreneurship: what kind of business should I start that makes sense?

In addressing this question, Paul Graham, the founder of Y Combinator (YC), has an incredibly classic article titled “How to Get Startup Ideas.” It’s a lengthy article of over ten thousand words, one that I’ve read at least ten times, and it always feels fresh and insightful with each read. Today, we’ll delve into the core ideas of this article while adding my own experiences and insights to discuss this topic.

This article will touch on many judgment-based and opinion-based aspects. So, how can you make the most of this article? I hope that besides reading it, you can revisit it at a later time—perhaps when you suddenly have an idea, when a friend seeks your advice on their idea, or even when you’ve already begun working on something. I believe that at that point, you’ll have a completely different understanding.

In summary, I hope this article becomes a timeless and ever-relevant reference guide for entrepreneurship. No matter when you open it or how many times you’ve read it, I hope you find it valuable.

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01 – Building What People Want

When it comes to startup ideas, Paul Graham pointed out that one of the most common mistakes entrepreneurs make is building something that nobody needs. If you recall the story of Artix that we discussed yesterday, you’ll understand why Y Combinator’s motto is “Make something people want.” Paul Graham combined his engineering and art background to create a service that allowed art gallery owners to put their artwork online. However, the art community wasn’t interested in this internet-based service, and many of them didn’t even use computers. As a result, the company failed. Therefore, the most crucial aspect of entrepreneurship is creating something that people genuinely need.

Graham suggests that one of the best ways to ensure you’re building something people truly need is by creating something you are intimately familiar with, something you need yourself. Here are some examples:

  • Nike’s Phil Knight was a long-distance runner, so he was passionate about creating running shoes.
  • Mark Zuckerberg, the founder of Facebook, is introverted and not naturally social, so he saw the need for an online platform to connect with people.
  • Do you remember how Hermès started? It all began when Thierry Hermès noticed that the horse collars used for pulling carriages were uncomfortable and could chafe the horses’ necks. He wanted to create more comfortable horse harnesses.

At first glance, these ideas might seem insignificant. After all, who would have thought that simply making hamburgers and fries a bit faster, like McDonald’s did, could turn into such a massive business? However, these startup ideas are all based on real needs, things that people actually want.

So, the first key to generating great startup ideas is simple: Build something that people genuinely want, and start with something you are deeply familiar with, perhaps something you need yourself.

02 – “Why Hasn’t Anyone Done This Yet?”

How can you discover what you need in your life? A great method is to ask yourself whether, in your daily life or work, there has ever been a moment when you thought, “Why hasn’t anyone done this yet? If someone created this thing, I would definitely pay for it.”

Additionally, you can pay attention to whether your colleagues or friends have mentioned similar things. For instance, phrases like, “If I could sleep at someone else’s place and save money on hotels” or “I don’t want to buy a car; I wish I had an on-demand chauffeur” might sound whimsical at first, but in reality, people usually won’t mention something if there’s absolutely no possibility of it happening. So, ideas that initially sound challenging often represent opportunities, and most importantly, they are real, existing needs that people would be willing to pay for.

This leads us to the second key to generating great startup ideas: Pay close attention to those moments in life when you ask, “Why hasn’t anyone done this yet?”

03-Questioning the Obvious

Another method for coming up with excellent startup ideas is to learn to question things that appear to be self-evident.

In daily life, we often become accustomed to the various things around us. However, good startup ideas often have a certain quality: when they haven’t appeared yet, you might think the current situation is fine. But once they emerge, you can’t go back to your old way of life.

For example, why does society need physical cash? Is it possible that we can do away with cash entirely? Think about it now – can you go back to a life without mobile payments? Similarly, why can’t we choose our seats when buying movie tickets? Can’t we buy them in advance?

Some people even ask themselves a question like this: do humans have to live on Earth? Can’t we become a multi-planetary species? As you can imagine, once you take that step, there’s no going back.

Of course, you don’t need to focus solely on such monumental issues. Improvements can also be made in smaller, seemingly mundane aspects of life. For example, the “Daodu” app raised a question: does fragmented learning necessarily have poor outcomes? Does knowledge always have to be conveyed through text? By paying attention to these seemingly self-evident things in life, you might be able to generate excellent startup ideas.

This brings us to the third key to generating good startup ideas: learn to question the things in life that appear to be self-evident.

Regarding this idea, Paul Graham also has a more classic expression: Good startup ideas are “noticed,” not just “thought of.”

04-How Many People Agree with Your Idea

However, this approach inevitably brings up a question. After launching a startup project, you may already have some people who genuinely need it. But since you’re changing something that people are already very accustomed to, or your starting point comes from a complaint of your own or a colleague’s, the customer base you initially target may not be very large.

There’s another reason behind this: if there are many people urgently in need of something, and it only takes three to five people to quickly implement it, chances are it already exists.

So, what do you do if your customer base isn’t large? The correct answer is: it doesn’t matter. We’ve repeated this phrase many times before, and we can repeat it here: instead of having ten thousand people think your product is okay, what you really need is a hundred people who are passionately in love with your product.

In fact, we can be even more radical. If a lot of people think your idea is pretty good, then most likely your idea isn’t that great—because it’s very likely that no one will actually use it, or your idea only scratches the surface.

For example, even seemingly brilliant large companies sometimes underestimate your idea. For instance, after producing the first generation of Apple computers, Steve Wozniak thought he should talk to his then-employer, HP, to see if they were interested in producing it. HP, however, considered the first Apple computer too rudimentary and not worth their attention. Today, we may all be thankful for HP’s arrogance back then.

So, let’s make the fourth statement about startup ideas even more straightforward: A startup idea that’s recognized by too many people may not withstand scrutiny.

05-The Potential for a Large Market

Of course, the ultimate goal of entrepreneurship is to scale. Initially, your product may not have many takers, but that’s okay as long as it operates within a potential large market.

Airbnb is, of course, the best example. Initially, there were very few people willing to sleep on someone else’s mattress, but as long as you’re in the large market of hotels and accommodations, with persistent effort, one day you can expand significantly.

Similarly, selling books online may not yield high profits initially, but as long as you possess the genius and patience of someone like Jeff Bezos, over 20 years, you can eventually sell everything online.

So, here’s the fifth statement about good startup ideas: It’s okay if your initial audience is small, but position yourself within a potential large market.

After learning these five statements, I believe you’ve realized that when it comes to startup ideas, following your instincts and judgment is crucial.

06-Are You the Right Person?

So, here comes another question: How can you ensure that your inner feeling is reliable? Paul Graham said a very classic quote about this, “The answer to this question is brutally and delightfully simple: if you’re the right sort of person to start a startup, you’ll have to be able to see the value of building things that are a bit sketchy. If you’re the right sort of person to start a startup, you have a point of view about the future that’s not just different from but better than the rest of the world’s.”

This may sound a bit mystical. I also found it incredible when I first read it many years ago, but now I firmly believe it.

In reality, what Paul Graham is saying is that any good idea isn’t a sudden revelation but is built upon repeated and extensive practice. Being on the cutting edge of a field doesn’t mean you have to be the one pushing the field forward. You can also be an advanced user of that field. It’s not that difficult.

For example, Mark Zuckerberg was an engineer who spent his days with computers, so for him, the idea of Facebook was quite natural. But if you had asked someone in their 40s around 2004 if they would be willing to semi-publicly share their personal life on the internet, they might have thought you were crazy. But Zuckerberg was already living online, so creating a website like Facebook was a natural step for him.

In fact, if you think carefully, becoming someone relatively advanced in a field isn’t that difficult.

Here’s a very small example: Suppose you spend a year seriously studying how to get the most cost-effective and reliable medical check-up abroad, and believe me, after a year, you’ll be one of the most knowledgeable people in that field. During this process, you are likely to discover very good startup ideas, and by that time, your ideas will likely be quite reliable. Even if you didn’t have the right direction initially, you can adjust it gradually.

Think about it, a startup can take 8-10 years of your time and shape your life for the next ten or even twenty years. Spending one year preparing is entirely acceptable. You don’t even have to do it full-time. So, Graham once quoted a line from “Zen and the Art of Motorcycle Maintenance”: “Want to make a masterpiece? First, make yourself a master, then just paint.”

So, here’s the sixth statement about good startup ideas: If you want to come up with good startup ideas, first become the person who can come up with good ideas.

07-Trouble is the Barrier

Of course, throughout the entire process of brainstorming, we have to grapple with our own human nature. Paul Graham says that when thinking about startup ideas, you must remember to shut down two big “filters” in your brain. One is called the “boredom filter,” and the other is called the “disgust filter.”

These two terms may sound a bit abstract, but they are quite straightforward. In essence, when evaluating a startup idea, we often get scared away by the boring, trivial, and unpleasant parts of that idea, so we don’t want to pursue it.

Everyone wants to start a business easily, write some beautiful code, or even find a CTO to take care of it, then upload it to a server, and wait for the money to roll in. But such things don’t exist in real life.

For example, you might think it’s troublesome to go downstairs to eat, and it would be great if you could order takeout. But when you think about dealing with so many different restaurants and quirky owners, you might find it bothersome and decide to skip it. Or maybe starting a community where everyone can ask and answer questions sounds good, but in the early stages, it means you’ll have to actively recruit people to participate and manage the community, which may not seem very rewarding.

Some things may sound very mundane and not at all “sexy” like the idealized notion of a startup, such as hoarding a bunch of domain names and waiting for the right time to sell them or developing a cloud storage system. However, these are precisely the things that people are willing to pay for.

So, often, our emotions and irrationality lead us to dismiss many ideas. In the process of thinking about startup ideas, the most important criterion is whether there is a genuine need. Everything else should be what you overcome. This is the seventh statement about good startup ideas: Don’t fear boredom and trouble; they are the true barriers to entrepreneurship.

08-Competition Doesn’t Matter

Finally, let’s talk about competition.

Many people often worry about competition when considering entrepreneurship. You might frequently feel that you have a great idea, but the next thought is, “Someone has already done this, I’m too late.” In reality, it’s not like that, so don’t let this thought discourage you.

In fact, entering a “crowded market” means you’ve found the right place because there aren’t so many geniuses in the world who can discover something that billions of people haven’t thought of yet. If you take a look at business history or continue following this column, you’ll discover that the companies that truly have a massive impact were not the first ones to do what they do.

Google wasn’t the first search engine, Facebook wasn’t the first social network, Uber wasn’t the first ride-sharing app, Meituan certainly wasn’t the first group-buying website, and Alibaba and Tencent weren’t the first e-commerce websites or online chat tools.

What’s important is not doing something that nobody has ever done, but finding something that everyone else has overlooked—that’s the key to success.

Google invented the PageRank algorithm and was different from all other search engines; it wanted you to find results and leave quickly. Facebook started from elite universities and insisted on real names as the key. Uber understood that once network effects took off, luxury cars could be cheaper than taxis. Starbucks realized that anyone could make coffee, but creating a “third space” where everyone wanted to hang out was fundamental to their business.

In the end, you’ll find that very few startups are genuinely killed by their competitors. Your success or failure is almost entirely determined by you and luck, not your competition.

If you truly intend to do something great, then face yourself honestly. This is the last statement we want to convey: Competition is not important at all; understanding what you’re doing is the key to victory.


Thank you for sharing these eight key insights on entrepreneurship ideas. As I mentioned earlier, I hope that these eight statements will inspire your creativity and strengthen your determination when you revisit this article in the future.

Let’s review these eight statements one more time:

  1. Make something people want, and start with what you are most familiar with or what you personally need.
  2. Observe moments in life when you wonder, “Why hasn’t anyone done this?”
  3. Learn to question things in life that seem obvious.
  4. A startup idea that everyone agrees with may not withstand scrutiny.
  5. It’s okay if your initial audience is small, as long as you position yourself in a potential large market.
  6. To come up with great entrepreneurial ideas, become the person who can generate them.
  7. Don’t be afraid of tedium and trouble; they are the true barriers in entrepreneurship.
  8. Competition is not important at all; understanding what you’re doing is the key to success.

These statements provide valuable guidance for anyone aspiring to venture into the world of entrepreneurship.

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