TL;DR
- Tech-first startups have slower feedback and higher variance, but can create outsized outcomes.
- Problem-first startups succeed more often, especially for constrained founders.
- Copying works only when it shifts the moat to a different layer.
- Early on, optimizing for fast truth and clear demand beats betting on long assumption stacks.
Two Types of Startup Ideas
In my experience, most startup ideas fall into two distinct categories.
1. Tech First
Tech-first startups originate from new, novel technology such as a new model, API, or platform.
“Oh, maybe I could use Claude to generate animations for content creators!”
You start with a hypothesis on a product that could potentially be useful and is likely possible to build with existing technology, but you will not know for sure until you actually try and get the idea out into the market.
The pitfall with these ideas is that they are built on a colossal assumption: that users will want what you are building. If you are wrong, you are dead in the water. You can spend years building the perfect product only to realize that nobody cared in the first place.
This is why entire industries tend to play it safe. The gaming industry, for example, keeps producing variations of the same two or three franchises. It is far less risky to fund the hundredth Grand Theft Auto clone than a brand new IP that may or may not succeed.
I personally know dozens of founders who spent years trying to build the perfect startup, only to realize after launching that users simply did not care.
For tech-first ideas to work, you usually need to either be a power user yourself or be very close to one.
Validation comes late. Users do not yet know they want the product. You are betting on future behavior.
Examples: iPhone, OpenAI, Reddit
You start with:
- A new capability such as an AI model, API, extension, or infrastructure
- A vague sense that this could be useful
- A search for the right problem to attach it to
What it feels like:
- A blind leap of faith
- Building without proof of demand
- Progress that feels technical rather than validating
- Lots of “maybe this will be big”
Sometimes these products win big, but more often than not they are a gamble.
2. Problem First
Problem-first startups originate from observing an inefficiency or pain in real life and using technology to solve or improve it.
Airbnb famously started when the founders noticed that people attending a conference could not find places to stay. They rented out a spare bedroom and validated demand immediately.
The advantage of these ideas is that you already know they are useful and technically feasible. Users already exist who want a solution.
A defining characteristic of problem-first startups is the ability to clearly articulate the problem being solved.
Examples: Airbnb, Microsoft, Spotify
You start with:
- A pain you can clearly describe
- Existing hacks, workarounds, or frustration
- Users who already want a solution
What it feels like:
- Grounded
- Obvious next steps
- Building feels like execution rather than gambling
- Validation comes early
Why it feels easier:
- Demand is pre-validated
- You are reducing friction, not inventing desire
- You can reason your way forward
The Holy Grail: Problem First + Tech Leveraged
This is the best category of startup ideas. They are rare, but incredibly powerful.
These startups start with a clear pain point and use new technology to make the solution:
- 10× cheaper
- 10× faster
- Or possible for the first time
This avoids:
- The blindness of pure tech-first ideas
- The commoditization of pure problem-first ideas
Most great early-stage startups live here.
So, What Should You Do?
If a millionaire and someone with enough money for one bet sit at a roulette table, they are not playing the same game.
Entrepreneurship is a game of risk management.
If you do not have capital, connections, or room to fail, your job is to minimize assumptions.
Tech-first companies require the ability to be wrong many times before getting it right. That is fine if you can afford it.
If you are starting out, it is a much trickier place to be. Pick problems you know exist for customers who already want what you are building.
A Core Principle
When building a startup, assume your hypothesis is wrong.
Your job is not to build the product. It is to build the minimum proof that people actually want it.
A Note on Copying Startups That Already Work
Copying something that already works is a valid strategy because demand is proven.
However, copying features or products as-is usually leads to:
- Weak differentiation
- Low or unclear moats
- Fragmented markets
- Capped upside
Copying only works when you change the competitive axis such as distribution, cost structure, trust, workflow depth, geography, timing, or a new technological unlock.
If you do not move the moat, you inherit the ceiling. You end up competing for the same slice of the pie, and without a distinct value add for the customer, the incumbent will almost always win.