How to find startup ideas that are ACTUALLY viable?

Based on Paul Graham's study

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Back in November 2012, Paul Graham (Y Combinator co-founder) wrote the now-canonical essay "How to Get Startup Ideas?" His insights remain remarkably relevant in today's frothy funding environment. But there's more to the story that founders need to understand.

1. Utility Trumps Novelty

PG's Take: Focus on highly useful ideas rather than highly novel ones. Revolutionary ideas are statistically rare (only 1% of patents), while incremental improvements have better success rates.

My Investor POV: When we evaluate startups at the seed stage, we're looking for the "aspirin, not vitamins" distinction. Will customers feel genuine pain without your solution? According to CB Insights data, 42% of startups fail because they built something nobody wanted. I've personally passed on dozens of "cool technology" companies that couldn't articulate why anyone would pay for their solution.

Actionable Insight: Before writing a single line of code, document the specific pain point you're addressing. Can you quantify the cost of this problem in time or money? If not, reconsider.

2. The Power of Small, Urgent Markets

PG's Take: Target a small group with an urgent need. Think of ideas as "wells" where width represents market size and depth represents intensity of need. Optimize for depth initially.

My Investor POV: I've seen this play out repeatedly in my portfolio. Our most successful founders didn't target massive TAMs (Total Addressable Markets) from day one. They obsessed over a niche audience's urgent problem. One founder in our portfolio started with just 50 customers paying $2,000/month each before expanding. This "inch-wide, mile-deep" approach resulted in a $50M Series B last year.

Data Point: Stripe started with developers at Y Combinator. Uber focused on black car service in San Francisco. Amazon began with just books. See the pattern?

3. Live in the Future, Build What's Missing

PG's Take: Position yourself at the leading edge of rapidly changing fields. Run a background process looking for gaps and missing solutions.

My Investor POV: When evaluating founders, I ask: "Why you? Why now?" The most compelling founders have unique insights from working in emerging spaces before they became hot. They've experienced the problem firsthand and have pattern recognition that others lack.

Example: The founders who successfully built AI solutions in 2020-2022 weren't newcomers to machine learning—they had been working with these technologies for years, sensing where the gaps would emerge as computing power caught up with theoretical capabilities.

Guys, if you are a VC or fund or provide services for startups in the space of fundraising, I would like to work with you. Please email me your details at bhowmiksayanee1050@gmail.com & we will connect to explore synergies. Cheers!

4. Founder-Problem Fit Matters More Than You Think

PG's Take: Scratch your itch. Being both maker and user allows for faster iteration and deeper understanding.

My Investor POV: In my experience evaluating 1,000+ pitch decks yearly, founder-problem fit is one of the strongest indicators of future success. When founders are solving problems they've personally experienced, they have intrinsic motivation that outlasts the inevitable dark periods of building.

Warning Sign: If you're entering a market solely because it's "hot" right now without a personal connection to the problem, you're starting with a disadvantage. VCs can sense authentic passion versus opportunism.

6. Competition Isn't the Killer

PG's Take: Good ideas often seem obvious. Startups rarely die because of competition; they die from internal failure to execute.

My Investor POV: When founders tell me "we have no competition," I immediately become skeptical. It usually means one of three things: (1) they haven't done proper market research, (2) they don't understand their customers' alternatives, or (3) there's no market for what they're building.

Reality Check: In my portfolio, companies facing formidable competitors often outperform those in "blue ocean" markets because competition validates market demand. The key is having a unique angle or differentiator within that competitive space.

7. The Unsexy Opportunity

PG's Take: Consider unsexy, tedious, unpleasant, or scary problems. These areas have less competition.

My Investor POV: Some of the highest-returning investments in my career have been in decidedly unglamorous industries. B2B SaaS for waste management. Payment infrastructure for governments. Developer tools for legacy system integration. These companies don't make TechCrunch headlines, but can build highly profitable businesses with less capital.

Case Study: A founder in our portfolio, tackling the mind-numbingly boring problem of commercial real estate lease abstraction, built a $100M ARR business with just $15M in funding because competitors avoided the market due to its complexity.

8. The Hedgehog Concept

PG's Take: Focus on the intersection of passion, skill, and economic viability.

My Investor POV: This framework aligns perfectly with how VCs evaluate founding teams. We're looking for the rare combination of (1) authentic passion for the problem, (2) unique capability to solve it, and (3) business model innovation that creates sustainable advantage.

Warning Sign: I've seen many brilliant technical founders build solutions they're passionate about, but neglect the third circle—economic viability. Your passion project needs a business model.

9. Lean Startup Is Science, Not Religion

PG's Take: "Just Do It" with scientific rigor. Test assumptions and iterate quickly based on real-world feedback.

My Investor POV: The lean startup methodology has sometimes been misinterpreted as "build anything quickly and see what sticks." In reality, it's about applying the scientific method to startup building. The most successful founders I've backed had clear hypotheses, designed experiments to test them, and weren't afraid to pivot when data contradicted their assumptions.

Key Metric: In early-stage companies, I look for evidence of learning velocity—how quickly the team incorporates feedback and adjusts. This predicts success better than almost any other factor.

The Funding Round Trap: A Silent Killer

One critical issue I've observed that Paul Graham doesn't address directly: founders optimizing for funding rounds rather than building sustainable businesses.

In today's hyper-capitalized startup ecosystem, there's a dangerous pattern emerging. Founders raise a pre-seed round with a compelling story, then immediately begin positioning for the seed round, then Series A, and so on—treating fundraising as the product rather than the means to build an actual product.

The Hard Truth: I've watched countless startups raise impressive rounds, hit impressive vanity metrics, and still fail because they never established product-market fit. They were optimizing for investor FOMO rather than customer love.

Data Point: According to a recent CB Insights analysis, 70% of startups that raise seed funding never make it to Series A. Of those that do raise an A round, 50% fail to reach Series B. The primary reason? They never built something customers truly needed.

My Advice: Focus on building a business that could survive without additional funding if necessary. The strongest position in fundraising is not needing the money at all.

Read my last edition to learn more about it:
How much company to dilute in each round? A founder's guide

Closing Thoughts: The Path Less Traveled

Finding the right startup idea isn't about chasing what's hot or what might attract VC attention. It's about identifying genuine problems where you have unique insight and capability to solve them.

P.S. Don't forget about the investor list giveaway! Get 3 friends to subscribe, and you'll receive my curated database of investors actively writing checks in today's market, complete with their investment theses and preferred outreach methods.

Until next time, signing off
Sayanee Bhowmik

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