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How to find startup ideas
Solve a personal pain point
This is straightforward: look at your own frustrations as a consumer or within your job. As Paul Graham says, "The way to get startup ideas is not to try to think of startup ideas. It's to look for problems, preferably problems you have yourself." Think about Airbnb—a classic example of solving a founder’s own need.
Look at history
Consider products with strong product-market fit that were neglected, discontinued, or shut down after being acquired. Examples include HipChat, which opened the door for Slack, or ViaWeb, a precursor to Shopify.
Vertical integration
Find a large, highly fragmented industry with a low net promoter score and vertically integrate a solution to simplify product value. In other words, discover a problem that everyone has a different solution for and nobody is happy with. There are probably still more of these markets than we realize. OpenDoor’s approach to real estate is a prime example.
Identify latent demand
Look for latent demand. Sometimes, people want to achieve a specific end result or value, but have to use inefficient or complicated methods to get there. If you can create a product that helps them easily achieve their goals, it will gain a lot of users quickly.
Think Quickbooks. For years, small business customers were using Intuit's personal finance software product, Quicken, as a way to keep track of small business accounts—a workaround that made no sense. Love or hate Quickbooks, it does $8 billion a year.
Another example is Pinterest. Ben Silbermann initially founded Tote, an app which didn't take off. Still, some people were using the app, and most of them were using it in a particular way: They were sending images of particular products to themselves. Collecting them. Watching this behavior during the summer of 2009, Silbermann and a very small team of technical employees began working on a product built around this behavior. It would be for the Web, a mature platform. The pivot from mobile app Tote to the new Web-based product "was a very progressive iteration," not an "epiphany".
Compete with a private equity owned or public company
Look at companies that are publicly traded and/or owned by private equity firms that are also hated by their customers. The aim here is to intentionally find a knowable big market with an incumbent, combined with horrible software you can compete against. Think Zip, who used this framework to land on procurement software (but only after six pivots).
Automate knowledge work
Identify businesses spending heavily on large teams to perform repetitive, knowledge-based tasks. Study their workflows, analyze the data, and design test cases to automate these processes, leveraging LLMs where possible.
Follow the vertical SaaS playbook
A vertical SaaS playbook helps position your product for lasting success by making it indispensable to your customer’s tech stack and industry ecosystem. Here’s how it works:
Become a control point: The most valuable vertical SaaS companies establish themselves as “systems of record”—core, must-have tools that anchor workflows and data management. These products become the “control points” within a tech stack, giving them a natural advantage with customer lock-in, data leverage, and potential for expanding into adjacent areas. By focusing on creating a strategic, central role, you build a foundation for sustainable growth. For example, Mindbody started as scheduling software for gyms and wellness centers, but by adding features like client management, payment processing, and marketing tools, it became a central system for running these businesses. Wellness centers now use Mindbody not only for scheduling but as an all-in-one platform that tracks customer interactions and business performance.
Expand the product offering: Once you’ve secured a central role, the next step is product expansion into related areas. This could mean adding features that address adjacent problems, increasing the product’s utility and stickiness. For example, Toast started as a point-of-sale (PoS) system for restaurants, but expanded to include payroll, inventory management, and online ordering. This strategy not only strengthens customer loyalty but also increases customer lifetime value.
Extend through the value chain: Beyond expanding features, top vertical SaaS products often add value across the industry’s entire value chain. They may integrate suppliers, partners, or customers into a unified ecosystem. This broader reach transforms the software into a marketplace or comprehensive platform for the industry, boosting network effects and enabling users to create, manage, and track value all within one environment.
The key is finding industries with a lot of fragmentation and low efficiency (where “efficiency” is a proxy for low digital adoption) and a large TAM. In these markets, even a modest market share can add up to $100M+ in revenue within a decade, giving you the foundation for significant growth.
Compete with a juggernaut
Find a large, existing competitor in a large market and try to be 10x better. For example, ConvertKit vs Mailchimp, Framer vs Webflow, Mixpanel v Google Analytics, etc. The benefit here is that it's easier to create a significantly better solution in an existing market where people already spend money and have allocated budgets than try to invent a new category.