How to Spot Promising Startup Ideas

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Why This Episode Exists + Nerdy Stuff Not In The Pod 💡

Today’s episode exists for people that are a bit bummed out because they think all the good startup ideas are taken.

It introduces two frameworks for finding and evaluating startup ideas at the earliest stage: The Myth of the Hard Startup and The Hassle Premium.

The Myth of the Hard Startup details most entrepreneurs belief that the seemingly hardest ideas - whether there’s already a big competitor, a tricky technical challenge, a long sales cycle, or whatever - are to be avoided. The reality here is that seemingly “harder” ideas are actually easier to start.

• People will reflexively avoid “hard” ideas, meaning you’ll have less competition.

• Talented people are drawn to harder ideas, as they’re usually more impactful if you figure them out (and smart people want to work on meaningful stuff).

• Hard ideas will keep you motivated longer because of that potential impact.

The Hassle Premium is the idea that valuable startup opportunities exist where customers are already willing to pay someone to take a problem off their hands. Look for the stuff people hate doing, for the stuff they’re willing to overpay someone to remove completely, for the stuff they already know is annoying but has to be done.

Finally, the episode talks through Brian’s favorite chef in the world - Frank Prisinzano. The chef who teaches you to face hard things head on:

Pod References

• Tacklebox

• Byldd

• Idea to Startup Newsletter

• Idea to Startup Bot

• Personal MBA

Timestamps:

00:27 Intro
01:35 Are All the Good Ideas Taken?
05:15 Byldd
06:22 Tinder for Jobs
11:30 Execution vs Customer Risk
12:30 Specific Knowledge and Leverage
13:04 The Hard Idea Myth + Frank Prisinzano
17:22 The Hassle Premium

Transcript - Feel Free to Read it Like a Long-form Article:

Today we’re going to talk about how to pick the right startup idea for you to go after.

A good side effect of this will be a framework that’ll let you see in 20 minutes way more potential startup ideas than you did 5 minutes ago.

The goal is for your life to become a giant magic eye poster where ideas suddenly materialize like that boat was always supposed to, but this time you won’t have to pretend that you see it.

By the way, I was curious if magic eyes were still a thing, so I googled it and there are a few bot generated accounts that make twitter or instagram posts with a new magic eye every day and I’ve got an update - I still can’t see anything. Which got me thinking about how amazing it’d be if the creator of magic eye came out one day and said there were never any pictures and that it was all a social experiment - everyone who claims they saw the sailboat was faking it.

Anyway, people look in the wrong places for ideas which means they usually end up choosing the wrong ideas to pursue. When you do this, you’re kind of screwed from day one.

The reason we look in the wrong places is that our instinctual value frameworks around startup ideas are inverted. We think bad things are good and good things are bad.

But, once you know what a good idea looks like, you’ll start to see them everywhere.

Which is great, because we need more people starting more things.

I’ve had a few super frustrating conversations lately with people who think that all the good ideas have been taken. Or that it’s a bad time to start a business. Or, worst of all, that we somehow missed out on the golden years of starting a startup - that there was a magical window from like 2004 to 2017 and now it’s all over. Forget the fact that it just takes a while for businesses to grow, so of course all the interesting businesses now were started between 5 and 15 years ago. also, In general, don’t be the “things were better back then, man” person. No one likes that person and it’s almost never actually true.

Someone cornered me at a wedding the other day and asked me that now familiar question.

“So… what are you going to do now at Tacklebox that the startup thing is kind of over? We’re in a bit of a recession and startups aren’t trendy any more, and it seems like the only businesses left are in web3 and it doesn’t seem like that’s working all that well. The low hanging fruit has been picked. So… what’s the plan?”

“I guess I’ll just open a diner,” I said, frantically looking for my wife to save me from the conversation.

I couldn’t find her, so I decided to play along.

“Although, there still might be a problem or two left to solve,” I said. “There are still a few social problems, economic problems, healthcare, pre-k, higher ed, education in general, housing, debt, agriculture, clinical depression, supply chain logistics, childhood obesity, jobs, elder care, pharmaceutical costs are up something like 480% the past 5 years. Plus, all the niche industry-specific problems I don’t know anything about. I mean, we’re at a wedding in a small town right now and every restaurant has a sign in the window saying they’re operating at half capacity or straight up closed because they don’t have access to workers because airbnb got rid of all the affordable housing those workers used to live in. Seems like that might be a problem that needs a solution.”

“Well yeah,” he replied, “but those aren’t like - startup things. Those are societal problems or economic problems or global warming. That stuff is hard. I’m talking about like… Tinder. Those opportunities are mostly gone.”

As much of a nincompoop as that person was, and they were actually super pleasant once we got off the topic of startups and I realized that maybe I was being a bit defensive, I do think that’s how lots of talented people think of startup ideas. As… things that should seem easy. As the low hanging fruit you sort of look around and notice. As a $100 bill sitting on the street that somehow no one has picked up yet.

This is a huge problem. Because we need smart people solving the hard things. And they usually want to, but they don’t know how to identify the opportunities worth their time.

So when those people do venture out on their own to start something, since their idea value structure is wonky, they identify the wrong thing as the thing to start.

So, that’s the muck we’ll wade through today.

What seems like a hard idea - one so big and hairy that it has to be way too risky to even say out loud - is usually the opposite. It’s the thing you should go after.

And the seemingly easy ideas are never actually easy. Whens the last time you found a $100 bill on the ground.

What we need is some perspective and context. Today, we’ll take a very simple approach. We’ll break ideas down by two frameworks that’ll help your idea radar.

The Hassle Premium and the Myth of the Hard Idea.

Knowing these will let you look at the magic eye and see the boat while everyone else just sits around, bummed out that someone else already invented tinder.

But first… we’ve got to talk about Tinder for jobs and Frank Prisinzano. AFter.. a word from this week’s sponsor, byldd.

It’s interesting that the nincompoop who wasn’t actually all that bad at the wedding the other day mentioned that Tinder was taken. Because one of the inspirations for this podcast was a pitch I’ve gotten over and over the past few months, and really the past 6 or 7 years, whenever the economy goes into a bit of a slump.

The idea is Tinder for Jobs.

It might not be the OG of Whisper Ideas, but it’s definitely on the Whisper Idea mount rushmore along with the app that tells people if a bar is busy, instagram for dogs - which turned out to kind of just be instagram, 85% of travel apps and a marketplace for private chefs, which, against every experienced startup instinct in my body, I still believe someone can nail.

The idea behind Tinder for jobs is simple and alluring. It makes all the sense in the world.

Searching for a job is terrible, just like searching for someone to date is terrible. Tinder, theoretically made that easier, so why wouldn’t that same approach - swiping, matching, chatting - make job searching easier?

There are three popular flavors of this idea:

• First, the one where job seekers make a profile and fill out basically a common job app, and then swipe right on companies they want to work for. HR employees look through lists of candidates, swiping away as well. When there’s a match, an interview is scheduled by the app.

• The second flavor makes every swipe a submitted application. So, the job seeker cruises through potential roles, then swipes if interested. An app is sent to that HR person, who decides if an interview makes sense.

• And finally, the third flavor allows you to swipe right on companies you’d like to work at, and HR - or someone at the company - can open up a chat if they’re interested, too. The idea here is more of an informal relationship that more organically leads to an interview, with each side learning a bit more about each other along the way.

If you’re nodding your head, thinking that any of these approaches sounds cleaner than however you went about finding your last job, you’re probably right. The bones seem to make sense. Which, if you’ve recall the core tennants of whisper ideas, is the most alluring part of them. Whenever you tell a friend about the idea, they’ll nod and say it sounds great.

Never forget that when you tell people your idea, if 80% of them don’t think it’s abjectly terrible, you’re likely going down a doomed path.

Back to Tinder for Jobs.

Nearly every founder that pitches this idea to me - and they all pitch it in those three words - Tinder for Jobs - says they’ll start with job seekers that are in high demand. That’s how you start any marketplace. By getting the side that is in high demand and needs you less, involved first. Then, the other side will naturally come.

They borrow the strategy from Tinder.

The first users on Tinder were single sorority girls in LA - the thinking was that signing these people up first would bring everyone else. It worked. The Tinder for Jobs founders always use the sorority girls of the job world - software engineers.

Lure the engineers on with a crazy easy interface and a way for them to pick and choose their next role - these people tend to hop jobs a ton and are, as we mentioned, in high demand - and the companies will follow, these founders say. They’ll go where the engineers are.

It certainly sounds like something that should work.

So… why hasn’t it? Why don’t you use tinder for jobs?

Because it’s a $100 bill on the ground. And there are never $100 bills on the ground.

When I have deeper conversations with these entrepreneurs, I’ll ask them how customer interviews are going. They’ll say they’ve already done them or they don’t need to. They get frustrated, conveying that it’s the least important thing they could do.

The risk of the idea, they say, is not being first to market. They need to raise and execute. Tinder for Jobs will work - the hard part is funding it and building it.

I remember a specific entrepreneur who said exactly that to me.

I asked about the HR side of the marketplace. What was scarce for them, aside from talented engineers? What were their constraints, monetarily, team-based, and financial? How did they hire now? What did they look for? What were the dams in the river for finding those people? How did the HR manager get measured internally? Promoted? What was their deeper job to be done? What was their existing work flow? How, exactly, do they hire engineers now?

What was the happiest moment of the HR employees year last year?

The founder laughed at the last one.

“We’ll figure all that out after we raise.”

And they actually did. They went under 4 months later, citing the inability to hire top tech talent. I won’t make the joke.

Tinder for Jobs is a solution in search of a problem. It’s a fully formed business that’s rigid from day one. And it’s based on… nothing. But we see this a ton, usually in the “x for y” space, but tons of other places, too.

These ideas - solutions in search of a problem - are so prevalent because the entrepreneur is more comfortable with execution risk than customer risk. Execution risk seems straightforward and brute-forceable. You can raise money, hire a team, get them to build tinder for jobs, then sell it to businesses. Execution risk is a palatable risk for most first time entrepreneurs because it seems like a risk with barriers and guard rails. Like something you can wrap your arms around and tackle.

Customer risk, on the other hand, is daunting. It’s scary. It has unknowns and no boundaries - does the customer even want this? Is it possible the one, broad customer you see is actually hundreds of tiny, unique customer segments with nuances that your first product won’t be able to handle. Is it possible that the order of customers is critical? That you need a secret weapon?

You can tell you’re building a solution in search of a problem if you’re scared of one customer. If the idea of convincing one specific person who exists and who you know personally to pay you, and then delivering that person tons of value, seems… daunting. Or even unlikely. But you figure at scale, that’ll just happen. Because Tinder worked at scale. So you will, too.

Startups are made up of two things - specific knowledge, and leverage. Specific knowledge is earned through interactions with the people you’ll solve a problem for, leverage is the way you amplify that knowledge - the product. Knowledge comes first, product after.

Tinder for Jobs has zero specific knowledge. So it fails. Simple as that.

The things most entrepreneurs think are risky - building a product, building a team, raising funding - are way more of a commodity than the customer stuff.

So that’s where you need to spend your time.

And to do that, you’ll need to do hard things. Which means we’ll have to talk about Frank Prisinzano.

https://www.youtube.com/watch?v=hUaUN9ihkTA

The Hard Idea Myth

I gave up Instagram maybe three or four years ago. I have an account, but I don’t have the password. I guess I could find it, but I have no desire to. Once you’re away from it for a few months it just seems exceedingly weird and dumb when you come back to it. You’re probably numb to it if you look at it, but if aliens looked at how we all use instagram they’d think we’re complete lunatics. I’m not judging anyone who likes it, I’d just make sure you ask yourself what problem it’s solving for you, because if it’s “keep up with friends,” like most people say, there are much better solutions.

So, I think Instagram is pretty useless.

Except, in one case. And that case is Frank Prisinzano, the chef who runs Frank, Lil Frankies, and Supper, three absolute institutions in the NYC italian food scene. Not pretentious, not obnoxious, insanely good. Frank’s instagram is the one account I check from my ipad, which is still logged in to the old Find Your Lobster instagram from years ago.

And today, I want to tell you about his crispy eggs. I promise it’s all going to come back around to you getting startup ideas. And I’ll put the 4 minute youtube of him teaching you about crispy eggs in the show notes.

Frank’s Instagram account is dedicated to teaching methods of cooking - it’s not recipes as much as fundamentals that make cooking less intimidating. One of my favorites comes from his crispy eggs.

He gets the pan and the oil super hot, so it’s hissing and smoking and crackling and intimidating as hell to someone who hasn’t worked in a kitchen. Then, he cooks eggs on it. And they’re unfathomably good. Check the video in the notes and try them.

On his crispy egg instagram post he writes “this method will teach you searing. It will teach you the value of a very hot pan. You will conquer your fear of super hot oil and learn to use it for dramatic effects.”

His methods usually have one thing most people are scared of. Then, he breaks it down and makes it approachable.

Whenever the oil in my pan started smoking, I’d freak out and turn down the heat. Now I make the best eggs, fish, chicken, and steak I’ve ever made because I understand hot pans and hot oil because of Frank Prisinzano.

Back to you.

The real reason people try to start Tinder for Jobs is because it seems easy and straightforward. Everyone believes it’ll work. Everyone says you should do it.

But the secret to startups is that hard startups are much easier to start than easy startups. The Myth of the Hard startup is that you should avoid the things that seem reflexively like non-starters. The truth is that you should seek them out.

If you have a visceral reaction to something as being super hard, most other people will, too. And that reaction is almost certainly overblown. Our startups have had far more success picking a space that everyone else writes off as crazy hard but has a crazy important and painful program. They then figure out how to break it down and navigate it - they figure out how to cook with hot oil. They find edge of the wedge problems and create momentum.

Hard problems are lonely problems. Tinder for Jobs is crowded.

When you’re solving hard problems customers will be more willing to work with you for no other reason than they have no other choice. People will be more willing to fund you because your story will be inspirational. Employees will be easier to hire - talented people want to solve hard problems.

My favorite startup in the jobs space right now is called EarlyDay. It’s a marketplace for early childhood educators. Hiring for preschool and childcare centers is notoriously hard and getting harder by the quiet quitting day. EarlyDay focuses specifically on this problem no one else would touch, and just closed a 3.25 million dollar seed to keep momentum.

Another hiring startup we’ve worked with is focused on elder care. Sourcing and helping people hire part-time live in help for single elderly people who don’t want - or can’t afford - a care facility.

Both problems instinctively feel hard, which is likely a good thing, or at least an indicator that the idea is worth pursuing.

—

There’s another gut check model I use to see if the problem is real and worth pursuing - I borrow a term from the Personal MBA, a great book I’ll pop in the show notes. The Hassle Premium.

Is this problem so painful and so ignored that to solve it, people are happy to pay a hassle premium - basically pay someone to take it off their plate.

The most common solution the elder care company had run across in customer interviews was people paying a middleman to source, interview, and present candidates for in home care. THey were already paying the hassle premium. That’s a good problem.

We talked a few weeks back about the concierge MVP, about executing manually on a product before scaling it. Most businesses evolve from service to product - starting with a concierge, consultancy type model to learn the customer and business helps you understand what product to scale. It helps you get the specific knowledge you’ll choose to leverage.

And ensuring a customer will pay the, quote, hassle premium, ensures it’s a problem they’re willing to solve.

—

The past few weeks I’ve been trying to notice the problems people reflexively write off. The things that are hard, but maybe superficially so. The places where I could learn, or someone could teach me, or - best of all - I already know how to cook with that industries equivalent of a piping hot pan.

And I’ve been looking for problems where the customer would willingly pay the hassle premium. Where they’d pay someone to take the problem off their plate because it takes too much time or is too complicated or too important to be screwed up or involves too much uncertainty and confusion. Or, it’s straight up intimidating.

Tinder for Jobs doesn’t work because it’s easy, which sounds like a quote Yogi Berra would have if he were a VC. Sourcing compassionate elder care might, because it’s hard. And it matters.

Search out the hard startups that will. Look for the hassle premium.

And give my guy Frank Prisinzano a follow. That crispy egg is to die for.