Avoid these misleading startup ideas

These ideas are deceptive on the surface and are presented with disconcerting ease as obvious, until you wonder why no one has solved them before.

In the search for startup ideas, it often happens that founders come across some seemingly obvious and simple ones. These are ideas that seem great at first, but end up being a huge waste of time and resources. You may be thinking, what is the difference between a bad idea and a misleading idea?

The only difference between a bad idea and a misleading idea is that you would know when to stop pursuing a bad idea. A misleading idea is identified a little late, when money has already been spent developing it. It's scary, right?

Most founders fall into the garbage idea trap: they assume it's a good idea. . In this article, we'll talk about the most common “tarry” ideas that founders tend to fall into and shy away from, and give some tips for avoiding them.

A tar pit, in nature, is the place where oil seeps through the earth. It is a breeding ground for finding fossilized remains, such as dinosaurs. Because animals mistake tar pits for freshwater ponds. They get in, get stuck due to the sticky tar, and unfortunately perish. The interesting thing is that: «The smell attracts more animals, creating a domino effect».

Interestingly, this reflects a phenomenon in the startup world in which some ideas attract entrepreneurs, but challenges and failures cascade, trapping them in a cycle much like that of unsuspecting animals in a tar pit.

The tar pits of the startup world attract founders with seemingly brilliant, unexplored ideas.

The absence of famous companies addressing these issues makes them more attractive. It's like discovering a pristine pool of fresh water that seems wide open to success. However, beneath the surface lies a danger.

Many startup founders unknowingly fall into the trap trap, where the graveyard of failed attempts is not immediately evident. Recognizing this pitfall is crucial because awareness significantly increases your startup's likelihood of success. In essence, avoiding the allure of misleading ideas can be the key to directing your entrepreneurial journey towards success and not failure.

Essentially, trap ideas refer to those with an excess of founders relative to market demand.

Why are consumption ideas trap ideas?

People tend to gravitate towards ideas of consumption because we are all consumers. From the products marketed to us throughout our lives, our problems and interests naturally revolve around things we use or think our friends would use.

Most startup stories we hear talk about consumer successes like Steve Jobs or Mark Zuckerberg, which creates a default association between startups and consumer-focused companies.

Unlike in the consumer space, it is rare to find someone crazy about enterprise solutions like Cisco or Oracle. Essentially, our familiarity and exposure make consumer ideas the default option when diving into the startup world.

The most interesting thing is that most consumption-based ideas seem very simple, but it is really difficult to create a good startup. There is a reason there is no solution for a simple idea.

It is difficult for two reasons

First, many underestimate the high bar set by successful consumer products. They often don't realize how good those products are and how many others have tried and failed.

Second, timing is crucial in the consumer sector. Sometimes founders understand when the moment is in their favor or against them. Furthermore, existing large companies have an almost unfair advantage.

For example, let's imagine someone with an idea for a consumer social network that hasn't launched yet. You might think it's innovative without knowing the actual standards.

Let's take Google as an example to understand the high bar: it wasn't just about launching; It was about creating something so exceptional that users couldn't resist.

In the beginning, there was no advertising or growth hacking, just a website. They relied on incredible word of mouth. Users had to discover it manually, often through Internet forums like Slashdot.

Without spending on user acquisition, branding or marketing, Google attracted millions of users daily. The quality of the product was so high that people not only loved it, but evangelized it.

At first, the founders weren't excited about running a startup; They even tried to sell the technology. However, the demand was so intense that they were dragged into the world of startups.

This highlights a key aspect of successful consumer ideas: creating something that people are obsessed with and that is of exceptional quality, so much so that users drag founders along on the journey.

The same case with Facebook

Facebook's journey mirrors Google's success. Within 48 hours of its launch at Harvard, 75% of the campus was already using it.

Investors like Peter Thiel and Reed Hoffman witnessed users spending an average of two hours a day on the site.

The most amazing? No money was spent on marketing or growth hacking.

The truth about these iconic consumer companies is often overlooked. They started with excited users who pulled the product themselves. Users were passionate, even demanding the product at their universities.

The lesson here is clear: successful consumer companies have in common, genuinely enthusiastic users. They didn't rely on aggressive marketing tactics, but rather created products that people became obsessed with from the beginning. This sets the bar very high for defining a compelling consumer idea.

If we look closely at the data…

Starting a consumer or mobile company in the mid-2000s and early 2010s was easier due to specific circumstances. During the 2000s, many people had broadband and computers, and the lack of competition for attention made launching something fresh quite successful.

For example, Facebook gained followers without having to fight against numerous social networks. In the era of smartphones, the existence of an app store and the novelty of mobile applications meant that even basic creations could attract users.

Back in college, everyone had a computer screen, and with limited televisions, people became more invested in computers. The absence of large web incumbents and the dominance of television in entertainment created a favorable terrain for web-based startups. Likewise, the era of early smartphones allowed simpler apps to flourish, unlike today's highly competitive app landscape.

“The key is that success often depends on being in the right place at the right time.”

Ideas that have a survivorship bias
User problems that may seem solvable from a later, results-oriented perspective. For example, discovery problems help people find new restaurants to try and new places to go.
Ideas that are second order to widely adopted innovations
Innovations that improve step function offer many second-order opportunities. For example, in today's environment, a “social network for X” might be a misleading idea.
Ideas that are more difficult to scale startups
For example, hardware startups need a lot of funding before seeing first results, and while they can scale over time, they require the right approach.

Some tricky ideas may not be tricky with the right founders and business model. At the same time, good ideas that were launched years ago could be a misleading idea now.

Based on the factors above, if you find that you are aiming towards unproductive or overly complicated ideas, then as a founder, how can you make a big pivot?

Before you understand – how can someone make a great pivot? Let's understand a concept called – Supply-Demand in Founders and Ideas.

Some ideas attract a large number of founders (more supply) because of their appeal: for example, partying with celebrities. On the other hand, ideas such as creating open source orchestration tools for developers are in lower supply due to the specific skills they require.

Demand is also crucial. Undifferentiated and unreleased social apps have minimal demand in a saturated market. On the other hand, there is a high demand for high-quality software that solves significant business problems, making companies more efficient.

It's like in the job market: having unique and differentiating skills sets you apart. In this case, these are experienced people who may not see themselves as startup material; If you have solved a niche problem or have knowledge of the sector, you could be a person for a startup. The world of startups is not limited to consumer applications or social networks, but encompasses diverse perspectives to solve real-world problems.

So if you realize that you are solving the Misleading Idea Problem and want to pivot your business, follow this “Rule of Supply and Demand”. As?

The best pivots occur when the founding team recognizes the dynamics of supply and demand. It's about moving from an idea with an excess of founders and low customer demand to an idea with fewer founders and higher customer demand.

Some examples are Brex and Retool. Instead of heading for the easy freshwater pond, which is a trap, successful pivots lead toward less explored areas like the mountains or the desert. It's about moving away from common tar pit ideas and embracing challenges.

For aspiring founders, it is crucial to do thorough research, understand the bar for success, and consider the supply and demand aspect. Creating luck involves recognizing these dynamics and making strategic moves to increase the odds of success.