After having failed with more than seven startups and finally achieved some success with my latest one Proxies API, here are a bunch of criteria I follow when picking a startup idea to bootstrap from the website
1. I am a bootstrapper, so I am interested in making recurring revenue and build an asset. So it has to be a SAAS idea. No consumer internet.
2. It has to have a competition. Again, I want to make money, not be a pioneer.
3. It need not be a multi-million dollar potential startup. I prefer it if it’s possible never exceeds a million dollars at its peak. It is because I don’t want to offer a platform, but a small subset of features that people find useful and the big guys find too small a market niche to address.
4. I prefer it if it does not need any design skills. With Proxies API, it is all about technology and how it works. I am in my element when I can run with just code and not have to pause for ‘prettifying stuff.’
5. I want a self-serve model. It is because I want to acquire customers by marketing rather than by sales. I have nothing against sales. I prefer this as I like to code, and I am a bit shy and introverted. I can write, in any case.
6. I want a field where I can write a lot about it. Just by looking at the area, I should be able to imagine what my first ten blog posts will be. If I can’t write, I can’t market. So I would slightly not touch it as I am not good at the rest of them.
7. The product should not be commoditized. It’s happening in almost any market after about five years. Social media tools are an example. They were selling at $100 pm a few years back now people are offering it free.
8. The technology should provide a moat against every amateur trying to start a company. That’s why there are a million to-do list apps. That’s practically the first thing they teach in any course.
9. I want to identify the primary keyword that drives traffic and search for that keyword on Google Trends. Google Trends should show the keyword gaining in popularity ideally, or at least it should be a flat line for the last five years. I will stay away from anything that is on its way out.
10. I want the users to get the AHA moment in one line or one image and not in multiple steps or after they “add 18 friends and two monkeys” rubbish. Just one look and the value prop is right there. With Proxies API, it was always this image and line. In essence, it immediately drove home this visceral power of using a single API call to solve an entire gamut of problem-related to scaling web crawling.
The author is the founder of Proxies API the rotating proxies service.
This article originally appeared here: https://www.proxiesapi.com/blog/My-Criteria-For-Picking-Startup-Ideas.php
Just my opinion, but technology moats are very hard to achieve, and almost impossible if you're a solo founder. How exactly are you going to achieve a technology moat with no capital as a solo founder? Do you honestly believe you are such a good developer that no one is going to be able to recreate what you've done? Probably not.
Technology moats generally take two forms: Either they prohibitively expensive, or they're prohibitively complex - or both. If you're not a multi-millionaire or you don't have a 100 person team, in all likeliness you're not doing either.
As a solo founder what you to look for is something that has network effects, that you can brand effectively, or a market that's has some non-tech barrier to entry. A non-tech barriers to entry might include geographical constraints or trust.
Another thing I'd add about high-tech startups is that they're probably one of the hardest ways to make money. You want to build some kind of AI tool? Okay, good luck competing with some of the smartest people on Earth to build that. Personally I like to look for places where people much less intelligent than me are making good money then see if I can improve on what they're doing with some simple technology. This is the genius of startups like Uber. The taxi industry was an incredibly low-tech industry prior to Uber. It was a great candidate for how some relatively simple tech combined with network-effects can become a multi-billion dollar company.