Two months ago, I started a startup.
Starting a startup got me started thinking about startup fit.
Startup fit is not one dimensional.
It's more than just asking yourself "Do I have a good fit with this business idea?" and blindly answering something like: "Yeah I know a lot about XYZ niche. Let's jump into this thing!"
My goal with this letter is to explain the three types of startup fit so you can save yourself the hassle of potentially spending months on an idea that was never going to work in the first place.
1. Are you creating a solution looking for a problem? (product-market fit)
The number one rule of YC philosophy:
Never create a solution looking for a problem.
In other words, your product should solve an already-existing problem.
It should not be a solution to an imaginary problem.
For instance, consider these two startup ideas:
- An app that lets you order pizzas made by robots en-route to your destination
- An app that helps plumbing companies track their revenue and expenses
Which one do you think is more likely to succeed?
The second one of course!
The second one solves a real problem. The first one doesn't solve a problem that anyone has today.
Seriously, what problem does the first idea solve?
- Are people not getting pizza delivered fast enough?
- Do people not enjoy consuming pizza made by humans?
- Are people appalled at the idea of eating pizza that wasn't made en-route to their party?
None of these sound plausible.
On the other hand, what problem does the second idea solve for plumbing companies?
- They have to juggle five different apps to track their money
- They don't notice the costs that will put them out of business until it's too late
- There aren't any B2B financial tracking apps tailored for plumbing companies
Of course, I'm just listing these for the sake of example. There probably are B2B financial tracking apps specifically made for plumbing companies. But in that case, you can always value skew your competitors.
Have better customer service, have more affordable pricing, build a product that creates a smoother user experience, etc.
If there's a problem to be solved, that means the market has demand. (Hence, product-market fit.)
If you need your product to manifest the problem to solve it, don't expect people lined up out the door, ready to buy.
2. Are you teaching physics as a marketing major? (founder-market fit)
Don't pick a startup idea in an industry you have no knowledge on.
You'd think that'd be common sense. But no, people love jumping into businesses that they have zero domain knowledge in.
Part of it is due to the novelty that comes with starting a new business:
"Oh, I'm starting a new business? I should do a business in an industry that's completely new to me! I don't really know much about super cars, but I think they're cool, so let's build a SaaS that helps exotic car dealers get more leads."
You might think that I'm making fun of someone else, but I'm really pointing the finger at myself here.
I've had plenty of ideas that were downright stupid. Not because the idea itself was terrible, but because my fit with the idea was terrible.
For example, if you did your undergrad degree in marketing, would you be qualified to teach a physics class?
No? Well, it shouldn't be any different when it comes to picking a solid business idea.
Pick something that you have an information advantage in. You don't need to be an expert or have a PhD in it.
If you've built your own PCs for years, have friends that are into PC gaming—heck, even if you worked part-time at Best Buy for a summer while you were in college (don't discount yourself on the seemingly "small" experiences), then yes, you have an information advantage in the computer hardware space.
You need some knowledge in the domain you're diving into. And if you don't, at least make sure your cofounder does.
Speaking of which...
3. Are you prepared for marriage without the sex? (founder-founder fit)
Marriage without sex sure sounds like a fun time.
All the arguments, compromises, and money stress. And none of the fun.
That's having a cofounder in a nutshell.
Think about it:
Why do business stories always describe the action of convincing someone else to start a business with you as courting?
Why do cofounders agree on a 50/50 split so that they divide their possessions evenly in the case of a falling out? (Sound like divorce much?)
And for those of you who've met a cofounder who's a good match, why does it feel like you can't stop talking to them? Like you've met your soulmate?
Because that's what cofounding is. You marry someone, split equity 50/50, move in together at the office, and vow to stick it out through the worst years of your life.
And just like with romantic marriage, divorce is not fun. Avoid it at all costs.
The best way to do that? Make sure you marry the right person in the first place.
Don't sign a contract right with them right away. YC recommends that you do a trial working period first, before committing to anything formally in writing. Just like how you'd date someone before you marry them.
So work with them for a few months. See how things go. Maybe you just had a great first impression of them and you don't work well together. Or maybe they are your business soulmate.
But there's no reason to commit instantly. All that does is put you in a precarious position.
Ship fast, but commit slow.