Ep: 3: Is Your Idea Good?
A walk down memory lane checking in on Brian's past startups and how you can make sure you're starting a company that has a shot at working out.
(Full Transcript also posted below show notes)
Brian Scordato: [00:00:00] In 2011 I built a startup called 3degrees. It eventually pivot into a dating app called Find your lobster. You've never heard of either of these and it'll become pretty clear why soon. Welcome to the idea to start a podcast. I'm Brian Scotto and today we're gonna figure out whether your startup idea is any good. Between Tacklebox applications and meeting with founders I bet I hear over 100 ideas a week and have for the past four years it's become pretty clear to me it isn't obvious to most people what the components of a good startup idea are.
Brian Scordato: [00:00:41] Which is why I'm recording this episode in a big reason this podcast exists in general. This podcast is gonna be a little bit different than the first one. This is a bit more of a let's sit under a shady oak tree and tell a story sort of podcast. It might even be therapeutic for me. It will also let you know if what you're working on is a good idea for you and it'll help you find and evaluate startup ideas in the future. We'll get to all that but first let's jump back to 2011. 26 year old Brian had just finished business school at UNC Chapel Hill all my friends are going into banking in New York City because they unlike me had gone to business school with a plan. They'd use it as a springboard to a job or promotion and finance.
Brian Scordato: [00:01:24] This is a terrific reason to go to business school. I'd gone to business school because I didn't like the finance job I had and I wanted to get into venture capital. I'd started the company while at my finance job but wasn't able to get it off the ground after I was unable to raise funding. I decided that the other side of the table looked way more appealing doling out money rather than begging for it. It at least looked easier or something like that. I'd seen lots of people in V.C. had MBA is so with a little more than that I made a giant financial time and life investment and flew down to North Carolina.
Brian Scordato: [00:01:58] This is a terrible reason to go to business school. 18 months later after an internship and corporate venture capital at Johnson Johnson and a few hundred cold calls and emails to top funds in San Francisco and New York City that went absolutely nowhere. I decided the actual best way to get into venture capital was to start a startup. I again tried to pattern match and it seemed that the people who were working in venture funds where I wanted to work either had an MBA or a startup or two under their belt. I was about to have both.
Brian Scordato: [00:02:27] I was gonna be drowning in offers. I remember thinking it didn't even matter if my idea worked or not. If it didn't I would just go into venture capital. I was confident in my plan. Saying this out loud is painful. I feel like Morgan Freeman in Shawshank. Not a day goes by I wish I couldn't talk some sense into that stupid kid tell him how things are but I can't. Business school gives you two things a big bill to pay back and a ridiculously inflated perception of your worth. I don't think that quote about business schools making an under the brochure but it's true.
Brian Scordato: [00:03:03] So dumb 26 year old Brian started searching for startup ideas because he thought this was the best way to get into venture capital. I was obsessed with startups. I tried to start things drop business school and I would cold email just about every founder that raised money and had an article on Tech Crunch. I'd ask how they started, how they had the idea, what their initial team was, what exactly the first 10 things they did after they had their idea were. I was pestering and annoying, but I did have tons of 20 minute calls with very generous founders.
Brian Scordato: [00:03:31] I then introduced them to other founders I've met if it seemed relevant. I made tens maybe hundreds of introductions. Lots of people I stay close with to this day. It's obvious now that what I really love about the process is the process. Spinning something out of nothing. People seeing value where no one else does. Telling a story in a way that gets customers to trust them then delivering a product that changes their life. I get goose bumps even saying that and luckily it's what I do for a living now.
Brian Scordato: [00:03:57] But I didn't know that then. The advice I heard over and over and tried to pattern match from these founders, was that they tried to solve the absolute most important problem that they saw. Lots of times these problems have been overlooked or ignored at least from a specific customer's perspective. So I started looking around. Didn't take too long to see that about 20 percent of my friends were freaking out every day. These are the people who hadn't gotten picked out of that weird sorting hat that is business school on campus recruiting.
Brian Scordato: [00:04:23] They were now frantically applying to jobs and a horrific job market, looking for warm intros wherever they could find them. I'd legitimately get 10 emails a day asking if I could make an intro to so-and-so who they'd seen I was friends with on Facebook or LinkedIn. Eventually a light bulb went off. I'd solve that problem. This is what all the founders had been talking about what is a problem I could solve that was super important to people that I knew 3Degrees was born. The goal was to help people search for their friends friends on Facebook and LinkedIn and then they'd be able to sort by things like location or job we'd rank connections based on an intimacy score meaning that was how likely one of your friends was actually close to the person you're trying to get an introduction. I raised a small round of funding founded development shop and a design agency I liked and got going.
Brian Scordato: [00:05:17] There are two types of ideas to keep them straight in my head I call them whisper ideas and Aria Stark ideas. Let's start with whisper ideas. The founder sees an opportunity. Maybe it's that a deli doesn't have gluten free bread and it seems like lots of people are eating gluten free bread these days. Maybe it's that there isn't a great way to quickly search for your friends friends to find out who can get them an intro to a job that they want. These ideas are almost always product focused.
Brian Scordato: [00:05:45] There's a gap in the market, the founders spotted it and they want to fill it immediately with a product that they've got fully scoped in their head. It augments the existing process and makes it incrementally better. Incremental in the startup world is death. I can spot these ideas from a mile away. I usually meet founders in coffee shops and this type of founder has often already emailed me asking for me to sign an NDA. By the time we sit down I'll open up with, "So what are you working on". They'll look both ways, kind of give the whole rest of the coffee shop the side eye emoji and then lean in and start whispering their idea, "I'm working on".
Brian Scordato: [00:06:24] The reason the founder is acting so ridiculous and whispering their idea is that they think their differentiator is that they saw it first. The reason they're whispering is secrecy is their secret weapon. They're in a mad dash to get something built before anyone else notice that there isn't any gluten free bread, they're focused on the product. They know what they're going to build soup to nuts and they're going to spend every second they have trying to build it. This means that their differentiator, the thing they're exceptional at that they're going to beat everyone else that needs to be production marketing execution sales supply chain.
Brian Scordato: [00:06:58] If you're the best in the world at producing bread how about it. Maybe this is a great idea for you. If not the world is a very efficient place. Every idea that you've got ten thousand other people have had it too. So for that opportunistic idea what are the odds that you're the best position to capitalize on it. Whisper ideas always look to me like one in one hundred thousand shots.
Brian Scordato: [00:07:21] The second type of idea is the interesting one. It's the one that might work these ideas are focused on transformation. There's a customer that the founder understands really well this customer wants something badly they want it more than just about anything else in their life and they can't get it. Their life gets way better after this problem is solved. They've probably tried to solve it a million different times in a million different ways. There's a story your customers telling themselves that should be X but Y is holding them back. You come along and tell that same story. Helping them solve the problem.
Brian Scordato: [00:07:57] This founder might have a product in mind it's just natural to think of a product when you're thinking of a startup. But the product isn't important. What's important is solving the problem. Getting their customer from point A to Point B. I think of these founders as are you start founders. A girl is no one their product does nothing. It doesn't matter. The product is totally flexible. What matters is the outcome that they're creating for their customer. They don't get tied up on anything but that. I know the areas start things a bit of a stretch but I'm really deep in Game of Thrones right now and it's really all I can think about.
Brian Scordato: [00:08:31] The important thing about this founder is that it always seems like they've been unconsciously preparing to start this startup for years. If a very specific understanding of the customer and a point of view no one else possibly could have. They're excited about the problem they can solve not necessarily the method used to solve it. Again the world is a very efficient place. The fewer the people who could potentially have this specific point of view that you've got the higher the likelihood you're gonna be successful. This founder can happily jump on a table in a coffee shop and scream their idea at the top of their lungs.
Brian Scordato: [00:09:03] Most likely no one else in the coffee shops can have any idea what they're talking about and they're certainly not going to have a chance to start it. The point of view is the differentiator. It's defensible and this is a great reason to start a company.
Brian Scordato: [00:09:15] So how do you know which one you've got?
Brian Scordato: [00:09:21] When people ask me if they're ideas good I tell them to take out a big piece of paper. I think you should do this whether you've already got an idea you're working on. You're trying to find an idea or you're just trying to figure out where you can be great in your life.
Brian Scordato: [00:09:35] Start drawing circles. The circles are skills you've got and the networks you've got access to. The size of the circle corresponds directly to how unique or outstanding that skill or network is. If you went to business school your network for finance is probably pretty good but it's also probably not any bigger than anyone else's who went to business school and it's smaller than people have been in this space for 15 or 20 years. This isn't a real differentiator for you.
Brian Scordato: [00:10:02] If you've also been a stand up comedian for 10 years then that's a pretty big circle. If you're a writer or designer obsessed with the word games, if you play the trumpet, these are all circles to put on your paper. In the startup world ordinary never leads to extraordinary. If you've got ordinary experience and a space experience that tons of other people have it's very unlikely you're gonna be able to build something extraordinary. That's just not how it works. And if you listen to our first solo episode you know that no one, no customers moving an inch for anything that doesn't seem like it's going to be extraordinary for them.
Brian Scordato: [00:10:36] Think about your circles in these terms. How hard would it be to find someone with that exact circle. If I want to find someone who understands corporate finance for my startup that's easy. If I need to find someone who understands corporate finance and also speak Spanish and has a deep understanding of building a supply chain for processed food, now we're getting somewhere. Unique perspective lends itself to products that have a specific differentiated point of view, a great start for an extraordinary product. So start combining your circles.
Brian Scordato: [00:11:07] We did a podcast with one of the two founders of Luke's Lobster. It'll come out in a few weeks and it is a must listen. Luke the founder grew up on the lobster docks in Maine. His dad was a lobster man. He knew the industry inside and out. When he came to New York City for a finance job, he looked around and realized there wasn't a good lobster roll under 30 bucks. He combined the two circles, knowledge of New York City restaurants scene, specifically that there wasn't a good affordable lobster roll, and his knowledge of the lobster industry supply chain cost - what made a delicious lobster roll. That circle's huge and you're now in a very unique space.
Brian Scordato: [00:11:43] Add in Luke's co-founder Ben a storyteller with a journalism background and you're in freakin business. Just noticing that there aren't any good lobster rolls is a whisper idea. Understanding why there aren't is the Aria Stark idea. The other huge benefit of building something with unique skill sets or networks in mind is that you'll be able to brute force it early on. This is a skill crucial for founders. You don't need anyone else's expertise to make progress. To learn what your customers like and don't to iterate early on. Luke had everything he needed to start testing out his lobsters in the market immediately.
Brian Scordato: [00:12:20] Back to 3Degrees. What were my circles for this idea? I'd been in finance I understood how business school students were looking for jobs and that's about it. Hadn't built technical products, I hadn't run Facebook ads, I hadn't optimized acquisition finals, I hadn't done any of that. I hadn't run a technical team, I hadn't run a distributed team, I couldn't code, couldn't brute force the thing. My unique perspective the thing I was banking on for this product to work was that the job market stunk and my insight was that it's easier to get a foot in the door through a warm intro. That is truly revolutionary stuff about as ordinary as you can be.
Brian Scordato: [00:12:58] There is a way I could have leverage my circles and was staring you right in the face. I could double down on these school students who were trying to get jobs at startups. There were lots of those and I understood both sides of that market pretty well. But I was product focused. I was enamored by the idea of searching for your friends friends on Facebook and LinkedIn. This is a feature. I thought it might solve the job problem but really I just thought it was cool. If I'd pursued the specific get business school kids jobs at startups route I'd have started with no product and found my way to the best possible way to solve that specific problem.
Brian Scordato: [00:13:30] Maybe that would've worked but I didn't know what I was doing back then. So I launched 3Degrees and because of how cool I thought it was to search your friends friends.
Brian Scordato: [00:13:39] I let anybody on the site search their friends friends on Facebook or Linked in for any category in their profiles. Facebook Graph was even crazier back then than it is now. So our users could log on and see their friends friends who worked at Goldman Sachs or their friends friends who snowboarded in Salt Lake City anything. I hustled my butt off and got a whole bunch of press which led to a bunch of early users, about 10,000 in our first week. Of those 10,000, ninety nine percent of them did the same thing and they did it over and over. They'd look for their friends single friends on Facebook then scroll through that list for hours.
Brian Scordato: [00:14:19] Most founders I meet don't understand how relentlessly proactive you've gotta be to start a company. They give it lip service but it's really something. Whatever job you've got now you're probably reactive 80 percent of the time and proactive for maybe 20 percent of the time. When you build a product that's going to flip. You've got to be proactive more than 90 percent of the time. This is exhausting, it is emotionally draining and it is absolutely necessary no matter what idea you start. You're going to need to do this.
Brian Scordato: [00:14:48] So what's a good idea look like. It's an idea that you'll do that for as you probably guessed. I pivoted 3Degrees into a mobile dating app called Find Your Lobster. We were the first Facebook driven mobile dating app as my dad says that in a quarter we'll get you on the subway. He hasn't been on subway in a while. I thought I'd stumbled onto something great. I suddenly had a point of view that no one else did. At the time there was no Tinder no Bumble no hinge. Very few people in their 20s and early 30s use dating apps. There is still a ton of stigma there.
Brian Scordato: [00:15:18] I was convinced they would because I saw that they did on 3Degrees. So we built Find Your Lobster and our slogan was meat and date your friends single friends. On the surface this looks like a huge opportunity. We were first there. But again I had no real specific knowledge here. It was a slightly more unique whisper idea but a whisper idea nonetheless. I allowed everyone to see their single friends each day, matching when both sides liked each other
Brian Scordato: [00:15:42] The features were vague and the messaging was broad because I didn't really understand the problem I was solving. The app was billed as for anyone. So when Tinder launched it was quickly exposed that it was actually for no one. We had no point of view sot there was no reason for anyone to use the app once Tinder came out and was better so they didn't.
Brian Scordato: [00:16:04] When I think back on the experience a single moment stands out. I'd move back to my parents basement, our team had fallen apart, the product was floundering and we were nearly out of money. I was up at 1 a.m. on a Saturday probably my 20th day in a row working frantically trying to raise money. I was simultaneously drafting email copy, figuring out a new marketing campaign, updating Quick Books. I remember I stood up, I walked into the bathroom looked in the mirror and I just said out loud "I just don't care". There's another word in there but I think that changes our podcast rating if I use it.
Brian Scordato: [00:16:35] I didn't care about the customer at all. People had found ways to date before or Find Your Lobster they'd find ways to date after Find Your Lobster. What we were doing just did not matter to me, to our customers, to anyone. Find Your Lobster ended that moment.
Brian Scordato: [00:16:49] A good idea is one that will provide you with boundless energy and patience because there are going to be tough times. Circles help with this. They show you what you've already spent the time to learn and know. They show you what you're more likely to be proactive about. They show you where you'll have advantages to lean on during the tough times. I've seen founders develop this passion for something that they didn't already have a circle, for but it needs to be conscious and it's frankly rare.
Brian Scordato: [00:17:14] I was opportunistic about Find Your Lobster and I never really cared about it. I pretended to care and maybe convince myself I did, but startups create transparency in the end, you can never fake them. Tacklebox, the company I run now is built to help people who are qualified to start great companies actually start them. To get over that first hurdle and see what they've got. This is endlessly motivating to me. It's not product focused at all. I'll happily spend the next twenty- five years figuring out how to help more people start companies in whatever form that takes.
Brian Scordato: [00:17:44] I'll happily go out of my comfort zone for it because the reward is so huge for me. Helping the transition from people dreaming about being founders to running companies that change their lives and their customers. That's endlessly motivating. The difference between the other things I've started in this are night and day. Great startups are built from specific unique knowledge. They're focused on an outcome for a specific customer not a product. There's something you'll happily work on at 1:00 a.m. on a Saturday in your parents basement maybe not happily but you'll do it.
Brian Scordato: [00:18:11] There are a whole bunch of other factors that will obviously affect whether your startup is successful or not, but I don't think you can overcome this initial point. Ordinary experience will never lead to an extraordinary product. Stacking your circles and finding co-founders that continue to add unique value is your best bet. The absolute best advice I can give is to start something that feels like you've been unconsciously preparing for your whole life.
Brian Scordato: [00:18:34] Fewer whisper ideas more Aria Stark ideas. And finally, and probably most importantly related to Aria Stark, I'm still on season 6 so please do not tweet me any spoilers...please. See you next week.