The Crappiest Idea Could Be Funded With A Good Team
A lot of top investors and analysts are saying that we are in a huge tech bubble right now. They believe that too many crappy startups are being funded and most of those startups are just overlooked. Some people were ranting over on HackerNews about how some of the newer startups doesn’t make any sense. Some argue that they do not have an exit nor do they generate revenue. The truth is that most investors and incubators believe in the team. The investors are not just investing in the product, but also in the founders.
How To Get Your Crappiest Idea Funded
Ideas are all over the place. Most of the startup community don’t even believe in ideas anymore. There are just too many of them out there and the execution is what matters. We’ve been seeing a lot of weird startups lately. For example, the new Superhost from Ycombinator’s group only takes 3% revenue from the Airbnb houses that they host. Most houses around the area go for about 120-140 a night. That means that the team will get roughly 4-5 dollars per host that they care of. That is an extremely small amount of money for the work that they are putting into it. I’m not sure if that will be enough to pay the bills.
What people don’t see though, is the talented founders behind the team. Like Paul Graham said in an interview, “To get your idea funded you need a good co founder and a good team.” Most of the teams in startup incubators like Ycombinator and Techstars come from a very powerful background. Most of them come from Ivy Leagues or have tons of experience working at other startups. Once you have built a proven track record in the startup community, you could get any idea funded.
Ideas Pivot Often
You’re going to be pivoting a lot after you get your idea funded. That’s perfectly fine and that is the whole point of a startup, to keep finding that business model that works. That’s what makes startup so much fun and challenging. Investors understand that ideas might not stay forever, hence why they invest in the team. Investors also understand that if the team is talented, other investors will join in to invest as well. Big hype comes with big traction and that comes with a huge exit.
This is also why people say that you shouldn’t waste time perfecting and designing your idea, instead you should be putting time into validating your idea. For solo founders that cant find a co founder, this is the way to go. The reason why this is important is because you can pick up co founders along the way. An experience entrepreneur is much more willing to join a team that already has a successful idea, rather than a team that is starting from dead scratch.
The last thing that an investor or incubator want to see is a team that argues a lot. That is why Y combinator takes the founder relationship so seriously. Most incubators will never provide you or match you with another founder because those tend to not work out. Most incubators would agree that the relationship of founders along with the talents of each individual founder is more important than having a good idea.
Like Alexis Ohanian said in his blog, “the internet age has changed” and that is why he recommends people to learn how to code because it’s a new standard. Venture Capitalist are always going to be investing in tech and startup companies, but to get funded, having a solid team is the new standard.
I’m not going to name exactly which startups, but there were some startups in the last year that didn’t make any sense to me nor my friends at all and yet they got funded. I then looked them up and realized that each of them have a talented team of ivy league students which made a lot of sense to me after seeing it. Another friend of mine who is doing extremely well as a CEO of a social media startup in Silicon Valley, pivoted the team’s entire idea after they finished their accelerator. He entered an accelerator with his friends without knowing anything about what to do.
If you’re a solo founder, don’t get discourage, instead create a minimum viable product and try to pick people up along the road.
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