Startup Ideas We'd Like to Fund

Startup Ideas We'd Like to Fund
Paul Graham
July 2008

When we read Y Combinator applications there are always ideas we're hoping to see. In the past we've never said publicly what they are. If we say we're looking for x, we'll get applications proposing x, certainly. But then it actually becomes harder to judge them: is this group proposing x because they were already thinking about it, or because they know that's what we want to hear?

We don't like to sit on these ideas, though, because we really want people to work on them. So we're trying something new: we're going to list some of the ideas we've been waiting to see, but only describe them in general terms. It may be that recipes for ideas are the most useful form anyway, because imaginative people will take them in directions we didn't anticipate.

Please don't feel that if you want to apply to Y Combinator, you have to work on one of these types of ideas. If we've learned nothing else from doing YC, it's how little we know. Many of the best startups we've funded, like Loopt, proposed things we'd never considered.

1. A cure for the disease of which the RIAA is a symptom. Something is broken when Sony and Universal are suing children. Actually, at least two things are broken: the software that file sharers use, and the record labels' business model. The current situation can't be the final answer. And what happened with music is now happening with movies. When the dust settles in 20 years, what will this world look like? What components of it could you start building now?

The answer may be far afield. The answer for the music industry, for example, is probably to give up insisting on payment for recorded music and focus on licensing and live shows. But what happens to movies? Do they morph into games?

2. Simplified browsing. There are a lot of cases where you'd trade some of the power of a web browser for greater simplicity. Grandparents and small children don't want the full web; they want to communicate and share pictures and look things up. What viable ideas lie undiscovered in the space between a digital photo frame and a computer running Firefox? If you built one now, who else would use it besides grandparents and small children?

3. New news. As Marc Andreessen points out, newspapers are in trouble. The problem is not merely that they've been slow to adapt to the web. It's more serious than that: their problems are due to deep structural flaws that are exposed now that they have competitors. When the only sources of news were the wire services and a few big papers, it was enough to keep writing stories about how the president met with someone and they each said conventional things written in advance by their staffs. Readers were never that interested, but they were willing to consider this news when there were no alternatives.

News will morph significantly in the more competitive environment of the web. So called "blogs" (because the old media call everything published online a "blog") like PerezHilton and TechCrunch are one sign of the future. News sites like Reddit and Digg are another. But these are just the beginning.

4. Outsourced IT. In most companies the IT department is an expensive bottleneck. Getting them to make you a simple web form could take months. Enter Wufoo. Now if the marketing department wants to put a form on the web, they can do it themselves in 5 minutes. You can take practically anything users still depend on IT departments for and base a startup on it, and you will have the enormous force of their present dissatisfaction pushing you forward.