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Your startup idea is worthless - Arvind Narayanan's journal [entries|archive|friends|userinfo]

Your startup idea is worthless [Apr. 25th, 2007|11:49 pm]
Arvind Narayanan
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The other day I was at a talk by Bill Kennedy who sold his startup to Sun for a cool $150M. I was chatting with the guy next to me who remarked that "every CS grad student probably secretly aspires to be an entrepreneur." That surprised me -- I didn't think it was much of a secret! The climate is so good these days that if you're in grad school, in all likelihood sitting on a lot of powerful technology that hasn't been commoditized yet, you should at least peripherally consider the idea of working for or co-founding a startup.

The other thing that a lot of people have probably thought at some point is "man, if only I could get some VCs to look at my Big Idea, I'd be a raking in the money." Well, don't. There's no market for ideas -- they're a dime a dozen.  The bottleneck is execution, which is something that's been bored into my head by now. Paul Graham has an super-insightful (as usual) article on the subject, and says that in fact, most startups end up nothing like the initial idea. Putting his money where his mouth is, Y-combinator is was accepting applications this year even if you have no idea what you want to do with your startup. Ideas take 5 minutes to come with, whereas Kennedy said in his talk that from his experience, just doing the market research to determine if your idea is any good will take you 3 months or more.

I believe there are two exceptions to this rule. One is if you have an idea that won't work in the current market, but you expect the market to evolve in two years to a point where it would, then you might have something valuable. You can do much of the groundwork before the market is even ready. The second exception is if your ideas are more than just ideas on paper -- if are backed by research that you have expertise at and/or a unique perspective on. This goes back to the point I made in the first paragraph.
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