New vlog this morning:
Sometimes you just really nail that idea. It's something everyone wants. It's clearly the future. Like in this clip from Silicon Valley:
Nelson Bighetti: The user can control their Hooli phone solely with their neural impulses. Point, click, drag, even type, all using only brainwaves. Think it, and it happens.
Gavin Belson: Holy shit. Seriously?
Nelson Bighetti: Seriously.Gavin Belson: This is great! Fuck yes, team! So, what's our timeline here? I mean, when can we start testing this? How long before we can integrate this into Nucleus?
Nelson Bighetti: Not long. It'll probably happen in our lifetime, we just have to figure out how to make it work. But I really believe that our grandchildren are going to grow up taking this technology for granted.Gavin Belson: Our grandchildren?
Nelson Bighetti: I know you're single, but you might meet someone.Gavin Belson: No... no!
It's not enough. Getting pointed in the right direction is just not enough. As you saw in that clip right there, Big Head in "Silicon Valley" found this out the hard way. You can't just point at the moon, you've got to build the goddamn spaceship.
Hard questions about a startup's advantage
You've got to figure out the problem to solve, and in that step the questions you ask are:
- Who am I building for?
- Who's my audience?
- What problem do they have?
And then next, you've got to figure out how you'll solve it.
- Is my solution possible?
- Is it feasible?
- How much will it cost?
- What tech today exists and how much of it can I use?
- Is it open-source? Is it licensable?
- Is there research out there that's already been published, that's a new method?
- And what are the alternatives?
- How do people solve it today?
- Who else has tried this? And what's gone wrong with that solution?
Why now? What do I have that nobody else has? Is it technology? Is it something that would prevent other people from just copying it?
- The best moat of all is often actually real pure technology.
- Sometimes it's relationships to customers, for instance, if you're selling to an enterprise and you can close an extra good, initial lighthouse customer that would unlock an entire industry. Envoy, the sign in, check in service that you've probably already used in Silicon Valley, they got started by selling Airbnb in their first 10 clients.
- Is it a better go-to-market?
- Is there content? Is there some relationship?
- Is there something that you do that nobody else does? What is that?
That's a great place to start because that helps you make something that is a lot more protect-able.
What it means if you have weak answers to these questions
The difficult thing after doing this exercise is sometimes there isn't a sufficient answer. There might be too many nos, there might be too many weak spots in your pitch.
Some basic examples?
- The audience might be too small.
- Your problem might not be felt severely enough for someone to try to fix it.
- It might not be possible to build what you want, given the state of technology today.
- Or it might be possible but it might be too expensive to make it viable for the people who might pay for it.
- There might be obvious alternatives that are basically just as good or even cheaper. There might be ways that it's being solved today that are basically fine.
- You might have no advantages over other people trying to create this.
And this might be the moment of maximum disillusionment. That's the time when people start thinking, "Maybe I shouldn't work on it."
On the other hand, this set of questions helps you think about the questions you need to answer. This focuses you on the things that you need to work on as a founder.
And if you're a great engineer, that's why building tech can be some of the best ways to do that. You can find a moat, a reason to be that might make it a lot better, cheaper, or faster than all the alternatives.
Technology as a great moat
If you're a technologist, being able to use technology to be your moat is sort of the bread and butter, right?
The best examples are things that basically have never happened before. Standard Cognition is a great example of this because they have a pure technology moat. They're actually putting to practice a new method that has never been commercialized before. And as a result, they have something that even Amazon cannot duplicate. They can provide cashierless checkout for a price that is 1/10 the cost, possibly, 1/100 the cost of state of the art that's out there right now.
How we did it at Posterous, my startup from 2008
But that's not the only way for this to actually come together.
One example from my own past was Posterous actually. Posterous, if you don't remember, was a dead simple email platform that let you email one email address, firstname.lastname@example.org and this itself was a brand new thing that nobody else had ever tried. The main reason was that people thought that security wise it wasn't possible to provide a good experience that way. That's why people always had sort of email@example.com.
Posterous was doing, on day one, a thing that people thought was not possible. But we did it using pretty simple software. It wasn't machine learning. Frankly, it was IF statements. If we received an email from you before, we asked you to confirm it. Once you confirmed it, we knew that that path of email was going to be safe.
That simple innovation from my co-founder, Sachin Agarwal, was enough to be a great moat for us. Nobody else tried to copy us right off the bat because they couldn't figure out the thing that we had figured out. That was enough for us to become a top 200 site and do it in a way where we weren't sort of fending off a thousand other copycats.
So there's not just one way to get this moat. What was true for us in 2008, remains true today. Without that moat, without that reason to be, without that thing that other people did not have, we didn't have a good reason to exist.
We could take this technological limitation, which is antispoof technology, and use it to be enough of a moat to get our first hundreds of thousands of users.
That's a thing that you can do too. Maybe not exactly that but that's the shape of something that you should be looking for when you're working on a new startup.
It's just prudent to ask: Why me? What do I have that nobody else has? And if that answers nothing, you've got to keep working.