How to find great startup ideas

Speaker 1 0:00 So last week I spoke with Rodolph , the founder and c e o of potluck. I&#39;ve got a couple things I wanna bring up that are , uh, complete paradox, <laugh>, like you could argue even the , the opposite. And so two lessons that kind of maybe seemingly contradict, but, but bear with me. So the first thing is, so here&#39;s Rodolph , right? Classic first time founder. Literally classic, first time founder. Here&#39;s how it happens, right? Here&#39;s how first time founders, including myself, tend to get their ideas. Wouldn&#39;t it be cool if, right? Like, that&#39;s how it starts. So Rodolfo&#39;s out there and he&#39;s like, just graduated university, like many of you probably listening to the show and he thinks himself, wouldn&#39;t it be cool if like he&#39;s walking down the street, he sees that there&#39;s retail stores that are, you know, up for lease, there&#39;s no store inside. So he says, wouldn&#39;t it be cool if we could interview or, you know, ask all these people walking by the store what they would want in that store. That would be some cool data. And then you could take that data and sell it to the landlord and tell that landlord, Hey, I&#39;ve sampled a thousand people and everybody wants a coffee shop, so you should lease it to a coffee shop because the coffee shop is more likely to succeed and therefore more likely to be a long-term tenant. That&#39;s how he comes up with his first idea. And so he goes and he does it and he actually lands a customer. And then because he is a young first time founder and because he knows how to generate hype and because it&#39;s kind of a local initiative, he gets all over news. He does pr, all local stuff in Montreal. Uh, and to his own admission, you know, a year later he made exactly zero new sales <laugh> . His point is he got so good at marketing that he basically had every single landlord in Montreal hear about it. And the one landlord that liked the idea was already a customer <laugh> . So he got nothing new. I mentioned this because Rodolph changed and you&#39;ll see it when you listen to the episode. Rodolph really evolves over time and it starts off from like a , wouldn&#39;t it be cool if narrative an origin story, which is so common amongst first time founders? And of course it leads to frankly a terrible idea and he&#39;ll admit the same. So <laugh> , just to be clear, and he evolves up until, I think his third pivot, like his third pivot is the first pivot that where, where the, the , the idea comes from customers. And that&#39;s not to say that customers like give him the idea, but he&#39;s actually listening to customers and figuring out that he can use some of the stuff that he&#39;s built to solve a real problem. And the first real problem is around cities and cities wanting to and having a , a mandate really to kind of reinvigorate certain neighborhoods. And so, you know, again, you can listen to the episode for the details, but he, in talking to cities, here&#39;s their problem and actually realizes, okay, I can do this thing and , and solve that problem. And he ends up in that third pivot getting real product market fit. And that&#39;s not the final pivot to be clear. Like he has two, two more pivots beyond that. But after that, Speaker 2 2:58 And this is the difference after that, every single pivot and he made a pivot like cuz the first one, he did get real product market fit, but he didn&#39;t have , uh, op opportunities for recurring revenue, which was like onetime purchases. So the business itself wasn&#39;t that great. And then he hears from malls that they have like a similar problem. So he sells to them and that becomes a recurring business. And then, you know, moles crash, <laugh> , it&#39;s kind of crazy. Like he, he literally goes from 10 million error or sunk to moles to covid all moles close . He goes down to zero and then he finds another opportunity selling, you know, data to like manage consulting companies and goes back up to 10 Millionaire again, you have to listen to the episode to to hear that part of the story. But the point is that he starts off as a classic first time founder and he comes up with an idea starting from a wouldn&#39;t it be cool if , uh, kind of perspective. And then he shifts over time and he changes to a more mature, let&#39;s say founder, more experienced founder, seasoned founder. And he comes up with ideas from the customer, the customer saying things that spark in him and help him understand what problems the customers have and how he can solve those problems. And that&#39;s a really big deal. I think many people listening to this show, if you&#39;re gonna be honest with yourself, like if I&#39;m honest with myself and how I came up with Gym track , how you might have come up with your first idea. Maybe you&#39;re on your first one, maybe you&#39;ve already changed it, but realistically very likely that you started off with wouldn&#39;t it be cool if and if you did, it&#39;s probably gonna be a bad idea. Sorry, <laugh>, I&#39;m sorry and raked you. It&#39;s probably gonna be a bad idea. You&#39;re probably going to have to change it. Pivot is a classic word. You might have to kill it, you know, I don&#39;t know. But most great ideas don&#39;t start that way. And that leads me to the second point. And this is what I was talking about, like there&#39;s a bit of a paradox here, which is that on the one hand I&#39;m saying, look, like if you come up with an idea with this, this first time founder mindset probably gonna be a bad idea. On the You Have to be in the Market to Win the Market Speaker 2 4:53 other hand, the only way that Rodolph actually ca actually discovered what he&#39;s working on today, which is a 10 million ar business growing really fast, right? A solid opportunity was because he started with something he was in . And so the way I say this is like, you have to be in the market to win the market. The reality is very often you won&#39;t discover these real problems unless you&#39;re in there doing stuff, right? Like if Rudolph had gone to work doing something else and just didn&#39;t pay attention to these markets, he just wouldn&#39;t uncovered the fact that malls wanted localized data , uh, sampled from people who had visited that mall, which was like his fourth pivot . He wouldn&#39;t have, had he not done that, he wouldn&#39;t have started selling on the side to the McKinsey&#39;s of the world, which wanted kind of the ability to, to do realtime geo-targeted questionnaires online. And because he had done what he&#39;d done before he was there and he learned and so on. So you have to be in the market to win the market. And so the the key point there is like adaptability, right? And, and if you listen to that , so what you&#39;ll find is when Speaker 3 5:56 Rodolph is doing, when here&#39;s another change that really has really important, right? Rodolph does his third pivot. So he&#39;s learned a lot at that point. He&#39;s already a seasoned pounder and then he&#39;s sellings his cities and it&#39;s going pretty well. Like he&#39;s finding out he doesn&#39;t have recurring business, but it&#39;s going pretty well. And then malls reach out to him and the malls are like, I want to use your product for, for my , uh, for my mall. At this point, Rodolph hadn&#39;t learned this lesson yet, which is yes, you have to be focused, like you have to be really focused a founder, but you have to give room for adaptability. You have to give room to the fact that there&#39;s these unknown unknowns and you might be climbing a hill that isn&#39;t the best, the biggest hill. So you do have to give these opportunities some space to come in. His gut reaction at that point is to actually say, I don&#39;t wanna sell to malls at all. That&#39;s not focused, it&#39;s just not something that I think&#39;s gonna work. So he put out , uh, he, he kind of, you know, took the call or whatever, but ultimately said, okay, fine, you can have it. But he kind of gave him a price that was just ridiculous. And to his surprise, the mall signed <laugh>. And so now he had to deliver and it was, it was a great thing he did because that became the much bigger opportunity. Here&#39;s How to be Focused AND Adaptable Speaker 3 7:07 the other change he goes through, and this is about kind of understanding the power of, of adaptability is that he learned that lesson because then when Covid came and crushed his small business, he went into his data and realized that there was a subset of customers, these consulting companies like the McKinsey&#39;s of the worlds, the BCGs, whatever, that were paying like really small a r today. But hey, they weren&#39;t crushed by Covid, they were still open. If anything, their business was powered by Covid because there were so many unknowns facing the world that a lot of firms went out to these consulting companies for help. And so now he&#39;s learned this lesson, he&#39;s an even more seasoned founder and he&#39;s a able to use the power of adapt adaptability to go after this really small customer base and dive into it, understand real problems, and then ultimately build a perfect solution for them that grew from zero to 10 million in a couple of years, which is, you know, pretty incredible. So what I&#39;m trying to get at is like on the one hand, if you start off with wouldn&#39;t it be cool if you&#39;re probably gonna be on the wrong track? On the other hand, if you&#39;re not doing something, you&#39;re probably not gonna discover the unique insights. So you&#39;ve gotta find a way, and this is the thing, like I don&#39;t have the playbook, I don&#39;t have the answers . Nobody does anybody that tells you that they know exactly what you need to do at all times. It&#39;s just lying. That&#39;s why startups are so hard. That&#39;s why over 95% of them fail, even the ones started by seasoned founders because nobody knows a hundred percent what to do. I&#39;m just saying this is the observations I have , which on the one hand you have to be in the game, right? You have to be in the market to win the market. On the other hand, if you get in the game with like these kind of first time founder type ideas, you&#39;re probably going to have to change something Speaker 4 8:54 Drastically because that thing&#39;s probably not gonna be the one. The only way I can kind of merge them is this idea of research and, and if I look at the pilot story and I think to myself, well if Rudolph maybe could have saved himself a lot of time, if when he had that first idea he did do something with it , but instead of going out and getting PR and kind of like jumping in with two feet and just starting to build a product, if instead he would have spoken to like 50 landlords, he probably would&#39;ve realized that that thing was never gonna fly. And he could have done that in a month instead of 12 months. And then who&#39;s to say that in talking to those landlords, he wouldn&#39;t come up with his , you know, the second pivot and then potentially the third one later on. Again, it&#39;s hard to kind of like hindsight&#39;s 2020 hard to rewrite history, but I , you know, guaranteed he would&#39;ve saved a lot of time had he done more research. Cuz that&#39;s the other key lesson that I think mentioned a lot of times in the show, and I&#39;ll probably keep repeating, which is for startup mode, there&#39;s research mode. If you want to find real problems, you&#39;ve gotta do real research. And that&#39;s one thing that , uh, Rudolph skipped and as a result, he ended up doing research. It just took him like three years instead of, you know, three months.