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Posts Tagged ‘Idea’

Bad ideas

The most common obstacle (excuse?) I hear for someone not creating a startup is, “I don’t have a good idea.” Well … so what? Maybe you should work on a bad idea instead.

Jason Cohen suggests your idea probably is bad, even if you think it’s good – but hey, you have to start somewhere, so you should probably go ahead and pursue it.

I’m beginning to think that it’s better to pursue an idea that you KNOW is bad than to pursue nothing at all. After all, if the goal of Lean Startup is to validate that your idea is good, couldn’t there also be value in validating that your idea is bad? There is a certain amount of learning how to measure that goes into creating a startup these days, and you can learn a lot by proving that your idea doesn’t meet the measurement thresholds you required for a success (most importantly, that revenue > costs). In some ways, your emotional skepticism about your bad idea will help you learn more about the process – it will help you stay objective. I suppose there’s always the possibility that your idea turns out to be good, but it’s more likely that you’ll spot a good idea right next to your bad idea.

If you have no idea at all, then just pick a space you like and start exploring. I’m interested in scheduling, email productivity, educational phone apps, “personal relationship management,” and a lot of other spaces. Pick a space at that scope, then talk to friends about possible ideas. Just pick the first specific idea that comes to mind. Do some basic customer development by talking to customers in that space or follow the process that Rob Walling recommends for a more self-serve product. The process itself should open your mind to more ideas – and as you evaluate them, one of them is bound to be a good one.

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Three specific software ideas

I often hear from smart software developers who don’t yet have an idea to pursue. Andy Brice recently published a guest post from Joannes Vermorel with three really good ideas in the retail industry. If you are looking for an idea, read that post.

If you have more ideas than you can use, share them. Our industry needs more posts like that to help light a fire under some smart people who are still on the sidelines.

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Are you a developer looking for an idea?

There is a wonderful incubator, Momentum, based in my home town of Grand Rapids, MI, that encourages software developers to join the program, even if they don’t have a specific business idea to pursue. At least in our market, there are more ideas than developers, so this is a way to help match match entrepreneurial developers  with founders needing their talents.

If you are based in Grand Rapids, you might even be able to participate in the 12-week program without quitting your day job. Even if you are not based in Grand Rapids, it could well be worth it for you to take a sabbatical. I sat in on some of the sessions last year, and I learned a lot. The education provided by Momentum is very valuable.

If you are a developer looking to join a startup, sign up at http://momentum-mi.com/apply/single-developer/. If Grand Rapids isn’t your thing, be on the lookout for similar programs from other incubators. It makes so much sense that I suspect more and more incubators will do it.

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In our last podcast, Bob and I interviewed Lisa Gansky, author of The Mesh and founder of http://meshing.it/.

The idea behind “the mesh” is that businesses are challenging traditional models of ownership in new and profitable ways. Think Netflix or ZipCar or even Groupon.

During our conversation with Lisa, I remembered a “meshy” idea I came up with a long time ago – one that requires extensive domain knowledge about real estate that I don’t have …

Why is it that our only options for home ownership ultimately come down to own or rent? Why can’t we find a middle ground between these two options? Owning your own home has traditionally been part of the American Dream, and for many, owning your home is a fine investment. However, some financial advisors are challenging the conventional wisdom about home ownership, especially after the recent housing crisis. Is it really sound to have the vast majority of your personal wealth tied up in a single investment? And that investment turned out to me more volatile than everyone assumed.

I’d like the option of having a looser connection between the home I occupy and my real estate investment. Essentially, I would like the option to invest in a real estate investment trust (REIT) that agreed to purchase my house and rent it back to me. Assuming all the legal and managerial details could be worked out, this would give me many of the advantages of home ownership and eliminate many of the disadvantages. I would have the universe of “for sale” homes available to me, and I would have the pride of ownership associated with calling my home “mine.” However, the investment vehicle could be set up in such a way that I would not be subject to the same liquidity issues associated with traditional home ownership – I could move more easily without being stuck with a house (there should still be financial consequences to this, but they would not be so severe). Also, if I wanted to move back to San Francisco to be near a good baseball team, I could live in a “modest” $500,000 house but invest a smaller amount toward my ownership of that house – an amount that was more appropriate to my personal financial situation.

Note that I’d still have to pay appropriate rent, management fees, etc. based on the actual cost of the house, so this wouldn’t be a golden ticket to live beyond my means. In fact, it would have the opposite effect. During the housing crisis, many people gambled on jumbo mortgages under the assumption that housing prices would continue to go up and they’d get to cash in on a high-leverage investment. This worked for many people, but when the bottom fell out of the housing market, it devastated our economy and many families’ lives. A combination REIT/RENT living arrangement would force you to acknowledge how much you are paying for your current accommodations while spreading the investment risk across hundreds or thousands of homes, presumably across multiple communities and regions.

Here’s an example, heavy on arm-waving (remember, this is squarely outside my area of expertise): if I buy a home with “no money down” resulting in a mortgage that demands a $1,000 payment each month, I’m only “investing” a tiny amount of principal each month (most of my payment goes to interest at first). On a thirty-year fixed note, my equity – my actual investment – is going to be close to zero for several years. If I decide to move after five years – barring a distinct jump in my home’s value – I will be lucky to break even, and I might even lose money (since it costs 3-6% in fees to sell a home). If I really wanted to treat that home as an investment (especially if I don’t intend to live in it for thirty years), I would need to pay more than the minimum payment each month, let’s say an additional $100/month toward principal. If I did so, then after five years, I’d at least have $6,000 (plus or minus the fluctuation in the value of my home) – this would probably cover my fees if I sold the house, assuming it didn’t fluctuate much in value.

Now imagine a business existed that could buy that same home for me and rent it back to me for $1,000/month (more likely it would have to be $1,200/month or more to account for managerial fees and my greatly reduced exposure to real estate market risk). In addition, in order to “use” this service, I’d have to invest in it – let’s say another $100/month. After five years, I’d have a $6,000 investment in the REIT, plus or minus the fluctuation of the value of all the homes in the REIT. If I wanted to move, I’d have to pay some sort of service fee, but it wouldn’t necessarily wipe out my investment, and it would be a heck of a lot more convenient than having to sell my home. It’s like a 100% timeshare on my home.

The “co-op” nature of this is key to making it work … plenty of REITs exist already, but I don’t know of any that take advantage of the magic that happens when people feel ownership for their dwelling (i.e., they tend not to trash it). In fact, this idea came to me about 15 years ago when I moved into a really nice apartment complex in Las Colinas (outside of Dallas, TX). It was so nice that I wanted to own part of it, so I looked into investing in the company that managed the complex. It was too much of a hassle, so I abandoned the idea, but I couldn’t help but think that such a nice place should encourage its residents to invest in it. Everybody wins – the ownership company would get more capital (presumably at a premium) and residents would get to participate as owners in their community.

There is probably a good reason nobody’s done this, but our conversation with Lisa reminded me of this idea and convinced me that it’s worth challenging assumptions about ownership. I don’t know if this one is a good idea – but it’s certainly meshy! It’s also an idea I have no desire to pursue and no background knowledge to make work. Maybe it will inspire a meshy idea that works for you.

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Idea for pricing car repairs

I have more ideas than I can use, so I’m starting to share them. They might be BAD ideas (also, a lot of my ideas are more about a problem than a solution) … I’m just hoping that my thoughts can help you think of a genuinely good idea.

I just got my wife’s 2001 Subaru Forester fixed, and I noticed there is no easy way to find out how much I should really be paying for a specific repair (front brakes on a 2001 Forester in Grand Rapids, MI for example). Why not? This seems like a very solvable problem.

A solution should take into account geographic differences – I suspect it costs more to repair a car in San Francisco than it does in Grand Rapids. It should consider specific makes/models/years with specific quality of parts. A solution should probably use social media to “shame” companies that give bad service or over charge.

Angie’s list does something similar for service businesses, but I don’t think that’s the appropriate model for car repair. If you solved this problem really well, then your site would be the starting place for people looking to get their cars repaired … if you can reach that point, then you should be able to get money from reputable repair shops who want to advertise on your site. That seems simpler than trying to charge “members” and it should make it easier to get the critical mass of reviews needed to get people to come the site if it’s free and easy to get their repair data onto the site.

That’s a key point – it has to be really easy to get data into the site. Try to do something like tripit.com does with itineraries … perhaps let people send copies of their receipts to the site (snail mail even) and have the data anonymously added to the database of what a given repair should cost. This is NOT a trivial problem to solve, but it would ROCK. Such a feature could even force car repair companies to email receipts as a competitive advantage, making it even easier to add data into the system.

Once you corner the market on good car repair data, then it’s easy to add mobile apps using that data or even open that data up to third parties for limitless uses (http://www.microsoft.com/dallas is a great way to open up data for third party consumption).

Good luck, and if this idea helps you create a new business, please let me know!

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Idea for Lightning Talk software

If I had more time, I’d love to create software to facilitate Lightning Talks … you can get by without custom software (using PowerPoint, Keynote, etc.), but custom software would increase the quality of the presentations and allow the speakers to focus more on their content.

Lightning Talks are auto-advancing talks with precise timing. At #bos2010, we had precisely 15 slides advancing every 30 seconds. There was a timer visible to speakers, but it was off by 2-3 seconds. I found myself getting slightly distracted by this, and I noticed other speakers getting distracted by it, too (not Portman, though … somehow he just nailed it). The natural response is almost universally “uhhhhh” accompanied by a terrified widening of the eyes … It would be much nicer if speakers saw a special view of the presentation with a 30-second count-down timer on each slide (and/or some other indicator that the slide was about to advance).

There is also the increased possibility of technical problems when working with decks from so many sources, different OS’s (and versions) and presentation software (and versions). We had one of those kinds of glitches. Would be nice if everyone just used the same software, using high-quality images for the slides.

And then you have to practice it, validate it, share it, etc. … custom software could help with all of that. This wouldn’t be difficult software to make it, but it would really add a nice touch to Lightning Talks, Ignite, or similar presentations.

So this is a great problem to solve with software … the second question is “can you make money” from the idea? I don’t know … seems like a perfect small example for using Lean Startup testing principles. As I’ve been recommending a lot lately, Rob Walling has a very concise chapter in his book that would help you figure out if this could make money.

I would love to do this one myself, but I don’t have time. I’m working on a grand, startup-like concept within Microsoft to share software stories (as Eric Ries argues, you can have a startup mentality even within a big company) … I’m going to have to focus all my startup energy on that until it succeeds or fails. I’m already preparing my Lightning Talk idea for next year, so I hope you can have it ready by then.

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Sharing ideas

In his book Start Small, Stay Small, Rob Walling refers to that “secret list” of ideas we all keep. Loved that – you know you have one …

Ideas come easy to me, and as Derek Sivers points out, ideas are only a “multiplier” … execution is where the money is.

I’ve got more ideas than I’ll ever be able to use, so I’m going to stop hoarding them. If I share them more readily, maybe I’ll get to use the results if I help inspire somebody to make something I want.

The scary part of this for me is that I’m sure a lot of my ideas really suck. That’s OK – don’t use them as-is – but maybe they’ll help you find the good idea that’s right next to mine.

As much as possible, I’m going to describe scenarios/problems instead of solutions. That way I’m committing to less and might come off as less stupid. I’m sure most of my ideas have 23 solutions already – but maybe there’s a twist that reveals a still-profitable niche to be served. Have at it.

So here’s one that came to me during the second roundtable at #bos2010 … connect people wanting to be involved in a startup with appropriate cofounders (unfortunately cofounder.com is taken, but it looks purchasable). There are so many directions this could go … you could focus on an eHarmony-like compatibility matrix. You could focus on friends-of-friends via facebook. You could create more of a craigslist free-for-all. I don’t know the answer. I just think it’s an interesting area of opportunity. And I’ve heard multiple people say that they need a cofounder. Hope this triggers a good idea for someone.

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