Sunday Reads #120: Bad Startup Ideas, MVPs, and the chicken-and-egg problem.
Plus, the link between McDonald's and government debt. Tom Cruise as you've never seen him before 🤯. And more.
|Jitha Thathachari||Mar 7|
Welcome to the latest edition of Sunday Reads, where we'll look at a topic (or more) in business, strategy, or society, and use them to build our cognitive toolkits for business.
If you’re new here, don’t forget to check out the compilation of my best articles: The best of Jitha.me. I’m sure you’ll find something you like.
And here’s the last edition of my newsletter, in case you missed it: Sunday Reads #119: What do you value?.
This week, let’s talk about startups. How to identify a bad startup idea that sounds great, before you waste three years on it. And when you decide to try anyway, how to do that fast and without spending too much.
And some link love of course - mRNA and Star Wars, the Big Mac hack to get cheap loans, and Tom Cruise’s ultimate magic trick.
Here's the deal - Dive as deep as you want. Read my thoughts first. If you find them intriguing, read the main articles. If you want to learn more, check out the related articles and books.
[PS. If you like what you see, do forward to your friends. They can sign up with the button below.]
1. The World of Startups.
I've not written about startups for a while. I wrote quite a lot between 2014-17, when I was building one myself.
One of my articles from that time was trending last week. So I revisited a few of them.
How to save yourself from a bad startup idea that looks good. (link)
This is an article I wrote in late 2015, a couple of years into my startup and when I was just starting OperatorVC, the angel fund I used to invest through.
It struck a chord with readers. It still gets 100+ views a week (and sometimes ranks in top 3 on Google for "bad startup idea") despite being not very optimized for search.
We have plenty of startup ideas. Many of them are bad, and we dismiss them right away (or our friends warn us off the idea).
They're the easy ones.
The dangerous ones are the ideas that look quite good. The ones that give you goosebumps, and then three wasted years.
In this article, I list some of the common patterns that such plausible (but actually bad) ideas have, so that you can spot them early and save your time.
Read on at jitha.me.
On a related note: Why Describing your startup as “Uber of X” is a bad idea. Yes, despite what Y-Combinator says.
Your Minimum Viable Product can be more minimum than you think. (link)
A couple of readers reached out to me after reading the previous article, saying, "You know, my startup idea matches some of your patterns for a bad idea. But I KNOW it's going to work."
Two responses to that:
Response #1: The patterns I described in that article don't imply failure. They just predict failure. They don't mean failure is inevitable. They mean failure is probable. There will be numerous exceptions to each of them. That's how the math works.
Response #2: If you’re sure, then try it out! That's the best way to find out.
And trying doesn't have to be expensive or take long. Your v1 product, or the Minimum Viable Product, can be more minimum than you think!
Read on at jitha.me.
PS. And no, you don't need a revenue model to start either. You can just bolt on any one of these 25 different revenue streams. Don't worry about the money part just yet. First build something useful.
How Uber solved its Chicken and Egg problem (and you can too!) (link)
Some of the most exciting companies of the 2000s are multi-sided networks. Think Uber, or Airbnb, or even ecommerce marketplaces. They're massive, and they have immense defensibility.
Anyone who wants to compete needs to get both suppliers and consumers, at the same time.
That's the proverbial chicken and egg problem. How do you get consumers when you don't have suppliers, and vice versa?
Turns out there are four specific ways you can solve the chicken and egg problem.
Read on at jitha.me for examples of each of these solutions.
I've also captured it as a framework on Slideshare, that you can download.
2. Chart of the week.
It’s worrying just how much money credit card companies make off the indebted (i.e., those with lower credit scores / FICO scores). Even though a huge majority of credit card holders are people with strong credit scores.
It's the fatalistic part of the Matthew Effect in action:
... from him who has not, even what he has will be taken away.
- Matthew 25:29
3. The Roaring '20s - mRNA and more.
I've written before about the massive impact that mRNA technology is likely to have on medicine and healthcare.
It's just getting started. First defeating COVID 🤞. Now it has malaria in its sights.
Next up - cancer, sickle cell disease, and maybe even HIV? (link).
PS. If you're still wondering how mRNA actually works, this xkcd comic has a great explanation. I love analogies, and I LOVE Star Wars analogies.
PPS. Lest you feel mRNA is monopolizing this section of the newsletter every week (which is true), here's another inkling of what the '20s have in store.
Sergey Stavisky @sergeydoestweet"It doubles our prior record for communication rate by achieving 90 characters per minute at high accuracies (> 99% with a general purpose autocorrect)!" 2/2 https://t.co/JYytzBKk5d https://t.co/ClIkVpZJhx
4. Fortnightly funnies.
I love to see examples of Goodhart's Law, or the flipside of "what gets measured gets managed".
This is one of the weirder ones.
When The Economist invented the Big Mac Index as a lighthearted inflation metric, little did they know that it would result in Argentina controlling McDonald's prices to get cheaper sovereign debt. (short but interesting thread below).
And was this the most costly UI design lesson ever?
… And this blew my mind 🤯
Watch the video of Tom Cruise in the tweet below.
While this deepfake is almost impossible to catch for the human eye, I feel like it'll still be easy for a machine to detect.
But this is just the start. Deepfakes will get better and harder to catch 😥.
The Red Queen's Race is well underway.
That's it for this week! Hope you liked the articles. Drop me a line (just hit reply or leave a comment through the button below) and let me know what you think.
PS. I’m slowing down to a fortnightly newsletter for the next few weeks, as I’ve been busy on a couple of things, and haven’t been able to read (or write!) as much. Will be back to weekly soon!
As always, hope you’re staying safe, healthy, and sane.
Until next time,