The presumption here is that you can correctly identify a startup idea that sucks. Here's a quick experiment you can do right now to see if that is true. Try to think of at least one startup that you cannot understand why it is getting traction, press, funding etc. I'm willing to bet you can think of several (I can even think of a couple companies that have actually gone IPO that I still think are dumb ideas).
The fact that you think an idea is dumb is irrelevant. The only opinion that matters are those of the customers. Instead of telling your friend that their idea sucks, ask them what their (potential) customers think of the idea. If she doesn't know, and you really feel like being helpful, push her to get meaningful feedback from a couple customers.
Having a real life customer tell a would-be founder that their idea sucks is so much more impactful than the same feedback from a random friend. Plus, there is the added benefit of saving your relationship.
If asked, I give constructive criticism, which they can act on or not at their option.
If I believe something in their idea may lead to problems, I tell them about the consequences I see. If they disagree, that's fine. I've been wrong before. Judging or evaluating isn't necessary or helpful.
Sticking with constructive criticism and describing consequences one sees helps in many areas beyond start-up ideas.
I think it (assumption that friends are afraid) doesn't really apply to the majority of HN audience. We give and read criticism (constructive or not) every day here, it's the second nature for us.
However, we are a small group of people. The OP's post strongly applies to a more casual audience, who won't read this post.
Thing you have to realize is that you aren't judging his startup rationally. Nobody judges anything rationally on its logical merits because humans just don't operate that way. Humans make judgments on an emotional basis and then afterward their brain automatically comes up with reasons they had that emotional reaction. So the first thing to recognize is that your opinion of your friend's startup is mainly based on the way he presents it and other emotional factors. Most people will never believe any of this is true since they think human decision-making is primarily rational. It isn't.
Anyway if you have that judgement try to identify the generally non-rational reason you felt that way and tell him. Then you can go through the things like market size, team etc. and talk about them on a rational basis, but with the understanding that investors make decisions on an emotional level also. Probably that reinforces market size being #1 in their evaluation, since a large market means more money.
I've told lots of people their startup ideas sucks. For a time, lots of people asked me for my opinions and advice on their startup ideas, from a context of "I want to raise seed funding, how do I do it".
Here's a few phrases that let people know their startup idea sucks without being judgey on them:
- How did you validate that there was a market for this?
- How many businesses have committed to pay for this?
- This sounds like a 2-sided marketplace, how are you going to solve the chicken-and-egg problem?
- Sounds cool, but consumer is really hard. Are you sure you wouldn't prefer to build a nice B2B startup instead?
The last one is interesting. Lots of people have ideas that are "like facebook but different". Many companies like that have succeeded (instragram, whatsapp, twitter, secret). But those companies are very very hard to build, and thousands of startups like that fail. So its not so much that their idea sucks - as it might be really cool - just more that they might prefer to build a different startup in a different space, especially if its their first startup. Nothing says early validation like 50 people who give you their credit cards - not easy in B2C.
> instragram, whatsapp, twitter, secret But those companies are very very hard to build,
I thought part of what made those companies interesting was how easy they were to build. I'm not saying their success was easy but they weren't hard to create were they?
Twitter was created in 3 months. Instagram was created by 2 people. Not sure about Whatsapp or Secret but neither seem much harder. Of course scaling might have been a ton of work but that came after success.
It's the product prototype that's easy to build. The company itself is very hard to build (gaining traction is probably the hardest part, and you won't last long without it).
I have a number of friends who are reflexively critical. Great people generally, and I'm glad to have them as friends. But I've just stopped telling them about new things I might be working on. If you're doing a startup, extra discouragement is rarely something you need.
If a startup sounds dumb, that's probably because you're not an early adopter in the target market. As an example, the first personal computers were absolutely terrible for most people unless a) they were hugely in love with technology, or b) had a very specific business purpose that the tech could actually solve. A lot of people surely looked at early home computers and thought they were dumb businesses. In retrospect, we can tell which the dumb ones were, but at the time it sure wasn't obvious.
If you want to help a friend whose startup idea is suspicious to you, don't critique the idea; encourage them to prove the idea with their target audience. Prod them them to interview 10 potential customers and see how many have the hypothesized problem. Help them to do a concierge version [1] of the product and see how much money they can collect. Assist them in doing a landing page test.
But please don't critique the idea unless you have deep expertise in the domain or are actually an early adopter in the target market. Feel free to critique things within your professional skills, of course; if you're a visual designer, it's ok to tell them their logo could use some work.
Sure, there are a lot of companies that initially sounded like bad ideas. But there are ideas that aren't just bad; they aren't thought through.
I hear dozens of people tell me about an idea and it's apparent that there's no chance they will succeed with this. A lot of time they're trying to enter a market they know nothing about (as this article described), for example finance students trying to do a clean-tech startup. Other times, it's the market opportunity. These ideas that suck so badly are just people who haven't been around startups to realize how to think about them. They're the kind of people who I wonder if they've ever read The Lean Startup, PG's blog, or any of the commonly-accepted startup wisdom.
A friend of mine told me his startup idea once (he wasn't pursueing it then, but he thought about it a long time and had created a small prototype in paper).
I was just honest and came up with arguments why his niche market wouldn't pay for his product (he thought the governement would pay for his product). If he was truelly sure about his startup, i wouldn't be able to convince him. Neither would anyone be able to convince me :-)
I thought and still think the idea behind AirBnB sucks. What the hell do I know? Ideas that seem to suck are often the ones that knock it out of the park.
I always give my advice for nearly anything in question form. It lets the person figure it out for themselves. I try to put in as little judgment as possible, so that they aren't in a "defensive" mode but more in a "contemplative" mode.
I agree with the OP that double sided businesses are extremely high bars for a lot of founders to tackle. Yet, I think it's silly to tell someone their idea is dumb.
Would GitHub have sounded like a great idea at the beginning? Or Twitter, or even Facebook for that matter?
The fact that you think an idea is dumb is irrelevant. The only opinion that matters are those of the customers. Instead of telling your friend that their idea sucks, ask them what their (potential) customers think of the idea. If she doesn't know, and you really feel like being helpful, push her to get meaningful feedback from a couple customers.
Having a real life customer tell a would-be founder that their idea sucks is so much more impactful than the same feedback from a random friend. Plus, there is the added benefit of saving your relationship.