Organic Startup Ideas Win
Organic Startup Ideas Win
We're breaking down another famous Paul Graham essay
Paul Graham says there are two types of startup ideas, and one is better than the other. It's all in his 2010 essay Organic Startup Ideas. It's short, it's great, and I'm summing it up. Ready?
“The best way to come up with startup ideas is to ask yourself the question: what do you wish someone would make for you?”
— Paul Graham
We're breaking this down in the fun-filled video below! 👇
Two Types of Startup Ideas
Paul Graham is a co-founder of Y Combinator. In 2010, he wrote the essay, Organic Startup Ideas, breaking down two types of startups. And he says one is better than the other.
“There are two types of startup ideas: those that grow organically out of your own life, and those that you decide, from afar, are going to be necessary to some class of users other than you. Apple was the first type. Apple happened because Steve Wozniak wanted a computer. Unlike most people who wanted computers, he could design one, so he did. And since lots of other people wanted the same thing, Apple was able to sell enough of them to get the company rolling.”
— Paul Graham
The first type of startup idea is what PG calls “organic ideas.” They're the ideas that come to you organically through your own life experiences. In your own life, you experience a problem, and you decide to fix that problem. Often, the problems you have are experienced by other people, too, so other people may find value in the solution you build. If enough people care enough about the problem to seek a solution, and if those people find your solution valuable, you might have a startup on your hands.
That was the case with Apple. Steve Wozniak wanted to build a computer for himself, and lots of people were interested in buying what he created. He solved his own problem, and that was Apple's organic startup idea.
The essay makes the case that organic startup ideas are the best way to start. Ask yourself, “What do you wish someone would make for you?”
Ironically, Paul Graham points out that he made his fortunes with the second type of startup idea: a startup idea for other people. He co-founded Viaweb, which was acquired by Yahoo! and became Yahoo! Store. (And if you've seen my other PG video, Do 10 Things That Don't Scale, you know this was a big deal for the world's most important Filipino karaoke mall store. I'm talking about my family's business in the 1990s that used Yahoo! Store. 😊)
Viaweb was basically like Shopify, but way back in the day. PG wrote:
“We didn't need this software ourselves. We weren't direct marketers. We didn't even know when we started that our users were called ‘direct marketers.’”
— Paul Graham
Despite his massive success with the second type of startup idea, PG recommends that aspiring founders focus on organic ideas. He says, “the most successful startups seem to be closer to the Apple type than the Viaweb type.” He's been around thousands of startups through Y Combinator, so that's saying a lot.
Why Organic Ideas Are Better
Simply put, solving a problem for yourself is easier because you have an initial understanding of the problem. It's much harder to predict what others need and solve a problem you don't understand yourself.
“Organic ideas are generally preferable to the made up kind, but particularly so when the founders are young. It takes experience to predict what other people will want. The worst ideas we see at Y Combinator are from young founders making things they think other people will want.”
— Paul Graham
The dangerous words here are “things they think other people will want.” It's really hard to predict what other people want. We product managers know that discovery work is hard. It takes a lot of effort to uncover the problems that users actually have and care about.
Having experience helps because if you've been working on a problem space for many years, you start to recognize patterns, and you may notice opportunities where you could solve problems for other people. But figuring out what people need is still hard work.
In the footnotes of the essay, PG adds:
“[2] In retrospect, we should have become direct marketers. If I were doing Viaweb again, I'd open our own online store. If we had, we'd have understood users a lot better. I'd encourage anyone starting a startup to become one of its users, however unnatural it seems.”
— Paul Graham
I love this. It's a great example of getting closer to your customers to understand their world. At every great startup I've worked at, all the employees were encouraged to use the product themselves, and this helped us understand our users much better.
However, not everyone has time to start one business to learn how to start another, as in PG's example of opening a store. 🤪 So, focusing on solving a problem you understand deeply because you are facing it yourself can be an easier way to get started. In the essay, he gives examples of organic startup ideas like Apple and Facebook. Here are a few more examples that I really like:
Dropbox's founder kept forgetting his USB drive, so he built a file syncing solution, solving his own problem.
The founders of Stripe were building a bunch of side projects and were frustrated that integrating payments into their apps was so hard. They solved that problem.
Slack started as an internal chat tool for a video game company. The game didn't make it, but the team solved their own communication problem, and that was a hit.
AWS was Amazon's internal web services, and when they opened it to other companies, it was more profitable than all of Amazon's e-commerce sales combined for many years.
My favorite example is Looker, where I used to work. Looker's founder, Lloyd Tabb, built his own analytics tool at three different companies, solving his own data needs before deciding to launch Looker as a company and make the solution available to everyone.
The list goes on.
Organic Ideas are Overlooked
The companies I mentioned above are huge now, and the problems they initially solved may seem obvious in retrospect. So why were the problems overlooked? Why were these founders able to swoop in when they did? PG says it's because organic startup ideas usually don't look like startup ideas at first.
“There are ideas that obvious lying around now. The reason you're overlooking them is the same reason you'd have overlooked the idea of building Facebook in 2004: organic startup ideas usually don't seem like startup ideas at first. We know now that Facebook was very successful, but put yourself back in 2004. Putting undergraduates' profiles online wouldn't have seemed like much of a startup idea. And in fact, it wasn't initially a startup idea. When Mark spoke at a YC dinner this winter he said he wasn't trying to start a company when he wrote the first version of Facebook. It was just a project. So was the Apple I when Woz first started working on it. He didn't think he was starting a company. If these guys had thought they were starting companies, they might have been tempted to do something more "serious," and that would have been a mistake.”
— Paul Graham
Great startups often look like a “toy” or a silly project at first. But all big companies started somewhere, usually as something small and crazy-sounding. So, just finding broken things and taking the time to fix them can lead to an unexpected breakthrough. The small side project could turn into a wildly successful startup if it turns out to be something lots of other people want, too.
🚨 Don't Skip Validation 🚨
Solving your own problems may be a great place to start, but this doesn't mean you can skip validation! To go from a project to a viable company, you need to find a market for your solution, and usually, that means you need to make pivots and iterations to turn your initial idea into something that people are willing to buy.
In this essay, PG's not saying, hey, since you like the product you built, everyone will like it, too! No, far from it. You are not your end customer, and there's still a lot of work to be done to align your project with your customer's ideal product. So, how do you do it? Well, that is for another PG essay.
But you can check out my video on The Lean Startup or my new course on Skillshare (links below!) next.
You got this!
📚 Build that skill 📚
If you have an organic startup idea and are not sure how to turn it into a product, check out my new course, Develop Products People Love, on Skillshare. It's a beginner class on product development for entrepreneurs. If you're not a Skillshare member yet, use my referral link above for one month free! (where available)
The class is just under one hour, so you can take my class and other great classes on Skillshare in your one free month. I hope to see you there!
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❤️ Develop Products People Love course on Skillshare. A beginner class on product development for entrepreneurs.
🙋🏻♀️ 1-on-1 coaching. For personalized coaching, book a one-on-one call with me. You can also book time with me on Skillshare!