Idea Filter: A Startup Founder's Blueprint
9 Key Insights from 9 Years in the Trenches
Ideas are the bedrock of startups, shaping their potential for growth and speed of success. The quality of the initial idea is often a determining factor in a startup's trajectory, setting the stage for its future. Through trial and error, founders develop a refined "idea filter" that evolves with experience.
Since stepping into the startup scene in 2014 as a high school student, I've immersed myself in learning, from books, articles, and firsthand experiences launching products. Now, with nine years under my belt, I've honed my "idea filter" — a mental framework for assessing and selecting startup ideas with the greatest potential. It's my guidepost for navigating the intricate startup landscape, and I hope it serves as a valuable resource for aspiring founders.
1. something people want
Make something people want. A founder should have a good feel on what people want. To figure out what people want, you need to observe their behavior, not their words. What people want usually falls down into two categories: Fulfilling their desire, or solving a painful problem for them.
The customer’s desire is not easy to change. It’s usually a bad bet to expect on its change (e.g. “people have never done this before, but they will”). Understand and map the customer desire, and surf on the waves rather than trying to fight it.
For example, a productivity product is better suited for a B2B play, because organizations have a stronger desire to increase efficiency and productivity.
2. why now
There must be a valid “why now”. Do not overestimate the novelty of the idea. The same idea would have come across more than 1000 entrepreneurs, who didn’t get the timing right.
A “why now” usually falls down to one of three categories:
People have always wanted it, but it's now possible (e.g. science, technology)
People have always wanted it, but it's now accessible (e.g. lower price, another distribution channel)
People want something new
Factors that create new “why now”s are: Technology, Consumer behavior, Environment, Regulation, Distribution channel. Keep track of these megatrend factors.
3. define impact
I want to put a ding in the universe. I want our existence to matter to the world. I want to change the world with our product.
This is my raison d'être, the idea that's been bouncing around in my head since I was in high school. I want to make an impact that will go down in history. I want to create an impact to the human race.
This is why I was attracted to startups since 2014, when I was 16. This is why I’m sticking in this field for nine years. To me, a startup is the best vehicle to change the world for the good of humanity.
Pick a job that resonates with your life goal. Align your definition of impact towards that goal. This clears up what KPI to ultimately pursue in the long term — in my case, impact on humanity.
4. big markets
Pick a huge market. Or a growing market that will be huge. This cannot be overemphasized. The market sets the tone of growth for the company, and it is an external factor that you should identify first.
Big markets usually touch on really fundamental human needs. Either it's something people use a lot (= capturing time) or something people pay a lot for (= capturing money)
5. focus
Be super focused and sharp. You should do one or two thing exceptionally well, so that users have a clear reason to try your product. You need to clearly define the problem, narrow it down, and be number one in the world at it. If you try to do something vague and broad like "I want to build a superapp," you'll most likely fail. A lot of founders talk this sort of bullshit to pump up their valuation. Don’t do this. Be focused and identify the “not to do”s.
6. growth or cash
As an entrepreneur I want financial success. There are two tracks to this.
Hypergrowth ideas
A B2C product that has the potential to grow like crazy with viral growth. This requires high frequency. You need to capture behaviors that people do frequently, e.g. messengers, browsers, marketplaces.
Cashflow positive ideas
A product that can generate cash from day one. To do this, you need to pick something that people are already paying cash for. Market creation takes a long time and has a low probability of success.
7. founder-market fit
Founder-market fit is important. Startups are long and hard, so the founder needs something to sustain their efforts. You only live once, and life is short. Startups usually take 5~10 years to succeed, so there must be a realistic expectation as well as being picky about what project to work on. Founder-market fit can be broken down into two aspects.
The first is personal interest. You need to work on a problem that the founder can personally relate to, and is emotionally invested. I like to filter my ideas with “can you invest 10 years of life into that single problem”. Smart people naturally have wide curiosity and interests, but if you really think about it most ideas don’t pass the 10 year test.
As a medical doctor, I am personally invested in most medical problems. If I can significantly increase worldwide human life expectancy, I’ll pursue that idea with great interest.
As a former medical student, I am also personally invested in improving human memory, and unlocking the human brain. Most studying efforts goes into memorizing and building this memory base, which is very volatile. This is why I’m interested in AGI, LLM and BCI.
The second is innate strengths. If you ever played sports, you know that everyone has a natural talent in some specific area. The same works for startups. The founder’s natural talents should play well with the domain, and this could be another filter to select which market to play in. For example, if a founder is gifted in creating catchy marketing content, then maybe a GPU optimization AI infrastructure startup is not the best fit for him. These innate strengths are hard to figure out on your own, and the best method is to ask coworkers for feedbacks with radical candor.
According to my coworkers and mentors, I have natural born talent in execution speed, energy level, rational decision-making, data affinity and obsession, knowledge input, and general intelligence. These innate strengths plays well with most pure software startups. I think I am most close to Reed Hastings and Jeff Bezos, in terms of CEO archetypes.
On a side note, as a basketball player my innate strength was defense, athleticism, speed, energy level, vocal leadership, and a jack-of-all trades offense, like Andre Iguodala.
8. things that don’t change
You have to focus on things that don’t change. What is the essence of the business? What are values that will not change over time. When you identify and focus on those fundamentals, you can make bets on the long term.
ex) Amazon — Fast delivery, Low price, Vast selections.
ex) Blue origin — Cost, Reliability, On time launches.
ex) Medicine — Accessibility in time and space, effectiveness of treatment, preservation of function. I wrote a whole article about it here.
9. bet on human nature
These are some of my insights on human nature, based on observations throughout life. These human nature are ingrained in the DNA. Do not bet against it. For example, a product that stops you from wasting time might not grow as big as you like it to be, because it bets against the natural wave of human nature.
Humans seek fun.
Humans like to waste time.
Humans are emotional animals.
Humans like to be socially praised and recognized.
Humans are true to basic desires, such as food, shelter, sex, sleep.
Humans watch what others do when they are uncertain.
Humans always compare themselves with each other.
Humans don't like to lose. Losses are perceived twice as hard as wins.
Humans don't like to die in the face of death.
Humans are not good at calculating probabilities.
Humans are not good at predicting and reacting to exponential situations.
Humans are not productivity-crazed.
Humans are lazy.
Humans don't like change.
Humans have a strong need for self-expression. We seek freedom of expression and freedom of speech. (ex. MySpace)
Humans go through stages of denial, anger, bargaining, depression and acceptance.
Humans have willingness to pay for another human, rather than to a system. (ex. OnlyFans vs MindGeek)
Outro
As you get more mature and accumulate scar tissue, you get to develop your own filter on ideas. As of 2023 these are my filters, and I expect it to grow over the course of my entrepreneurial journey. With these insights and passion, I’m preparing to start my own startup in 2024. I take my talents to San Francisco.
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